HANGZHOU, China, Nov. 16, 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 September 30,
2021.
Johnny Chou, Founder, Chairman
and Chief Executive Officer of BEST, commented, "In the third
quarter, we remained steadfast in driving the Company's realignment
around our core competencies and unlocking value for our
shareholders. As we proceed with our transaction with J&T
Express Co., Ltd. (J&T Express China), we are excited about our
roadmap ahead to deliver integrated supply chain, freight and
global logistics services for our customers."
"Against a challenging backdrop with COVID-19 flare ups, we
continued to enhance Best Freight's business capabilities of
serving e-commerce customers and leveraging synergies with our
Supply Chain Management. Supply Chain Management further
strengthened its operations by prioritizing higher margin
customers, expanding the OFCs network and leveraging our
technologies to deliver quality services. On the Global front, our
cross-border and local business in the Southeast Asia region continued to press
forward, achieving a 78.7% year-over-year increase in parcel volume
for the quarter despite the ongoing pandemic."
"Looking forward, we will continue to synergize among our
business units in a strategic, value-creating way and further
enhance our integrated logistic service offerings to capture the
enormous growth opportunities from e-commerce and the booming
demand for integrated supply chain services."
Gloria Fan, BEST's Chief
Financial Officer, added, "Revenue for the quarter was RMB6.8 billion, a decrease of 14.6% year over
year, as market dynamics weighed on the volume and average selling
price for Express and Freight. Our balance of cash and cash
equivalents, restricted cash and short-term investments
were RMB3.4 billion at the end of the third quarter of 2021.
The strategic transaction with J&T Express China will
significantly improve our liquidity and provide us with financial
flexibility to reduce leverage and increase investments, laying a
solid foundation for us to return to profitability and a growth
trajectory."
FINANCIAL HIGHLIGHTS[1]
For the Quarter Ended September 30,
2021:
- Revenue was RMB6,812.4
million (US$1,057.3 million),
a decrease of 14.6% year-over-year ("YoY"). The decrease was
primarily due to a decrease in average selling price ("ASP") in
Express and Freight business segments.
- Gross Loss was RMB505.1
million (US$78.4 million),
compared to gross loss of RMB58.5
million in the same period of 2020. Gross Loss Margin
was 7.4%, decreased by 6.7 percentage points ("ppts") YoY.
- Net Loss was RMB654.9
million (US$101.6 million),
compared to a net loss of RMB565.9
million in the same period of 2020. Non-GAAP Net
Loss[2] [3] was RMB684.2
million (US$106.2 million),
compared to non-GAAP net loss of RMB541.9
million in the same period of 2020.
- Diluted EPS[4] was negative RMB1.65 (US$0.26),
compared to negative RMB1.45 in the
same period of 2020. Non-GAAP Diluted EPS[3]
[4] was negative RMB1.73
(US$0.27), compared to negative
RMB1.39 in the same period of
2020.
- EBITDA[5] was negative RMB451.8 million (US$70.1
million), compared to negative RMB392.6 million in the same period of 2020.
Adjusted EBITDA[3][5] was negative RMB481.1 million (US$74.7
million), compared to negative RMB369.5 million in the same period of 2020.
BUSINESS HIGHLIGHTS[6]
BEST Express – During the quarter, parcel volume
decreased by 10.9% YoY to 2.1 billion. Gross margin contracted by
7.6 ppts due to a decline in ASP per parcel of 12.0% YoY, partially
offset by a decrease in average cost per parcel of 5.5% YoY despite
higher oil prices and rising labor costs.
On October 29, 2021, the Company
announced to sell its express delivery business in China (the "Business") to J&T Express
China, at approximately RMB6.8
billion (US$1.1 billion)
enterprise value. The sale does not include any of BEST's other
businesses, namely, Supply Chain Management, Freight, UCargo and
Global. The consideration to be paid for the Business is subject to
certain adjustments and conditions under the terms of a definitive
agreement entered into by the parties. This sale is subject to
certain closing conditions and applicable regulatory approvals, and
is currently expected to close in the first quarter of 2022.
BEST Freight – During the quarter, the Company continued
its effort to grow its e-commerce related transactions. The
e-commerce business accounted for 20.4% of total volume compared
with 15.9% in the third quarter of 2020. Freight volume
decreased by 1.5% YoY and its gross margin was negative 5.4% in the
quarter; 6.7 ppts lower YoY primarily due to a 7.5% YoY decline in
ASP, offset by a 1.3% YoY decrease in average cost per tonne.
BEST Supply Chain Management – Supply Chain Management
remained focused on projects with higher margins and clients with
strong credit profiles, while continuing to expand franchised cloud
OFC network. The total number of orders fulfilled by Cloud OFCs
increased by 1.4% YoY to 103.6 million in the third quarter of
2021, of which the total number of orders fulfilled by franchised
Cloud OFCs increased by 27.1% YoY to 68.0 million. The number of
franchised OFCs increased by 1.7% YoY to 351.
BEST Global – Global maintained its robust growth in
Southeast Asia with improved
margin. Despite the continued impact from COVID-19, parcel volume
in Southeast Asia increased by
78.7% to 37.1 million in the third quarter of 2021, with growth
rate of 123.0%, 933.2% and 264.5% YoY in Thailand, Malaysia and Cambodia respectively. Global's gross margin
rose by 4.1 ppts YoY, primarily driven by our growing economies of
scale.
Others – For UCargo, as of September 30, 2021, the number of registered
drivers on the UCargo mobile app increased by 40.2% YoY to
404,336.
[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.
|
Key Operational Metrics
|
Three Months
Ended
|
% Change
YoY
|
Express Parcel Volume
(in '000)
|
September
30, 2019
|
|
September
30, 2020
|
|
September
30,
2021
|
|
2020 vs
2019
|
|
2021 vs
2020
|
1,890,842
|
2,359,773
|
2,103,200
|
24.8%
|
-10.9%
|
Freight Volume (Tonne
in '000)
|
1,885
|
2,464
|
2,427
|
|
30.7%
|
-1.5%
|
Supply Chain
Management
Orders Fulfilled (in '000)
|
86,371
|
102,171
|
103,638
|
|
18.3%
|
1.4%
|
Global Parcel Volume
in
Southeast Asia (in '000)
|
2,607
|
|
20,754
|
|
37,082
|
|
696.0%
|
|
78.7%
|
UCargo Number of
Transactions (in '000)
|
170
|
233
|
|
218
|
|
37.2%
|
|
-6.5%
|
FINANCIAL RESULTS
For the Quarter Ended September 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
|
|
|
September 30, 2020
|
|
September 30, 2021
|
|
|
(In '000,
except for %)
|
RMB
|
% of
Revenue
|
|
RMB
|
US$
|
% of
Revenue
|
|
% Change
YoY
|
Express
|
5,090,682
|
63.8%
|
|
3,988,291
|
618,973
|
58.5%
|
|
(21.7 %)
|
Freight
|
1,492,965
|
18.7%
|
|
1,358,305
|
210,806
|
19.9%
|
|
(9.0%)
|
Supply Chain
Management
|
452,691
|
5.7%
|
|
400,551
|
62,165
|
5.9%
|
|
(11.5 %)
|
Global
|
216,017
|
2.7%
|
|
298,267
|
46,290
|
4.4%
|
|
38.1%
|
Others[7]
|
723,784
|
9.1%
|
|
766,969
|
119,032
|
11.3%
|
|
6.0%
|
Total
Revenue
|
7,976,139
|
100.0%
|
|
6,812,383
|
1,057,266
|
100.0%
|
|
(14.6%)
|
[7] "Others" Segment
represents UCargo and Capital business
units.
|
- Express Service Revenue decreased by 21.7% YoY to RMB3,988.3 million (US$619.0 million) from RMB5,090.7 million, primarily due to a 12.0% YoY
decrease in ASP per parcel and a 10.9% YoY decrease in parcel
volume. The decreases were primarily attributable to competitive
market dynamics.
- Freight Service Revenue decreased by 9.0% YoY to RMB1,358.3 million (US$210.8 million) from RMB1,493.0 million, primarily due to a 7.5%
decrease in ASP per tonne and a 1.5% YoY decrease in freight
volume.
- Supply Chain Management Service Revenue decreased by 11.5% YoY
to RMB400.6 million (US$62.2 million) from RMB452.7 million, primarily due to
discontinuation of service to certain low-margin legacy customers,
partially offset by a 1.4% YoY increase in the total number of
orders fulfilled by Cloud OFCs.
- Global Service Revenue increased by 38.1% YoY to RMB298.3 million (US$46.3
million) from RMB216.0
million, primarily due to strong growth in parcel volumes in
Southeast Asia.
- Others Services Revenue increased by 6.0% YoY to RMB767.0 million (US$119.0
million) from RMB723.8
million.
Cost of Revenue
The following table sets forth a breakdown of cost of revenue by
business segment for the periods indicated.
Table 2 – Breakdown of Cost of Revenue by Business
Segment
|
Three Months
Ended
|
|
% of
Revenue
Change
YoY
|
|
September 30, 2020
|
|
September 30, 2021
|
|
(In '000, except
for %)
|
RMB
|
% of
Revenue
|
|
RMB
|
US$
|
% of
Revenue
|
|
Express
|
(5,205,390)
|
102.3%
|
|
(4,384,494)
|
(680,463)
|
109.9%
|
|
7.6ppts
|
Freight
|
(1,473,252)
|
98.7%
|
|
(1,431,988)
|
(222,241)
|
105.4%
|
|
6.7ppts
|
Supply Chain
Management
|
(432,945)
|
95.6%
|
|
(385,443)
|
(59,820)
|
96.2%
|
|
0.6ppts
|
Global
|
(239,653)
|
110.9%
|
|
(318,420)
|
(49,418)
|
106.8%
|
|
(4.1ppts)
|
Others
|
(683,361)
|
94.4%
|
|
(797,136)
|
(123,714)
|
103.9%
|
|
9.5ppts
|
Total Cost of
Revenue
|
(8,034,601)
|
100.7%
|
|
(7,317,481)
|
(1,135,656)
|
107.4%
|
|
6.7ppts
|
Cost of Revenue was RMB7,317.5
million (US$1,135.7 million)
or 107.4% of revenue in the third quarter of 2021, compared to
RMB8,034.6 million or 100.7% of
revenue in the same quarter of 2020. The increase of 6.7 ppts in
cost of revenue as a percentage of revenue was primarily
attributable to a decrease in ASP which was partially offset by
reduced 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)
|
September 30, 2020
|
September 30, 2021
|
|
YoY
|
Express:
|
|
|
|
|
Average Cost Per
Parcel
|
2.21
|
2.08
|
|
(5.5%)
|
Average Transportation
Cost Per Parcel
|
0.65
|
0.59
|
|
(9.2%)
|
Average Labor Cost Per
Parcel
|
0.18
|
0.21
|
|
16.7%
|
Average Lease Cost Per
Parcel
|
0.10
|
0.11
|
|
10.0%
|
Average Other Cost Per
Parcel
|
0.10
|
0.06
|
|
(40.0%)
|
Average Last-mile Cost
Per Parcel
|
1.18
|
1.11
|
|
(5.9%)
|
Freight:
|
|
|
|
|
Average Cost Per
Tonne
|
597.8
|
590.0
|
|
(1.3%)
|
Gross Loss was RMB505.1
million (US$78.4 million) in
the third quarter of 2021, compared to gross loss of RMB58.5 million in the same period of 2020.
Gross Loss Margin was 7.4%.
Operating Expenses
The following table sets forth a breakdown of operating expenses
and adjusted operating expenses by category for the
periods indicated.
Table 4 – Breakdown of Operating Expenses and
Adjusted Operating Expenses by Category
|
Three Months
Ended
|
|
|
|
September 30, 2020
|
|
September 30, 2021
|
|
(In '000, except
for %)
|
RMB
|
% of
Revenue
|
|
RMB
|
US$
|
% of
Revenue
|
|
% of Revenue
Change
YoY
|
Selling, General
and
Administrative Expenses
|
(453,463)
|
5.7%
|
|
(423,424)
|
(65,714)
|
6.2%
|
|
0.5ppts
|
Adjusted
for
SBC Expenses
|
(30,145)
|
0.4%
|
|
(26,984)
|
(4,188)
|
0.4%
|
|
0.0ppts
|
Adjusted Selling,
General
and Administrative
Expenses
|
(423,318)
|
5.3%
|
|
(396,440)
|
(61,526)
|
5.8%
|
|
0.5ppts
|
Research and
Development
Expenses
|
(44,935)
|
0.5%
|
|
(61,159)
|
(9,492)
|
0.9%
|
|
0.4ppts
|
Adjusted for SBC Expenses
|
(2,135)
|
0.0%
|
|
(2,056)
|
(319)
|
0.0%
|
|
0.0ppts
|
Adjusted Research
and
Development Expenses
|
(42,800)
|
0.5%
|
|
(59,103)
|
(9,173)
|
0.9%
|
|
0.4ppts
|
Total Operating
Expenses
|
(498,398)
|
6.2%
|
|
(484,583)
|
(75,206)
|
7.1%
|
|
0.9ppts
|
Adjusted
for SBC
Expenses
|
(32,280)
|
0.4%
|
|
(29,040)
|
(4,507)
|
0.4%
|
|
0.0ppts
|
Adjusted Total
Operating
Expenses
|
(466,118)
|
5.8%
|
|
(455,543)
|
(70,699)
|
6.7%
|
|
0.9ppts
|
Selling, General and Administrative ("SG&A") Expenses
were RMB423.4 million (US$65.7 million) or 6.2% of revenue in the third
quarter of 2021, compared to RMB453.5million or 5.7% of revenue in the same
quarter of 2020.
Research and Development ("R&D") Expenses were
RMB61.2 million (US$9.5 million) or 0.9% of revenue in the third
quarter of 2021, compared to RMB44.9
million, or 0.5% of revenue in the same quarter of 2020. The
increase in research and development expenses was due to increased
employee compensation and benefits.
Share-based Compensation ("SBC") Expenses included in the
cost and expense items above in the third quarter of 2021 were
RMB29.4 million (US$4.6 million), compared to RMB32.9 million in the same quarter of 2020. In
the third quarter of 2021, RMB0.3
million (US$0.05 million) was
allocated to cost of revenue, RMB1.9
million (US$0.3 million) was
allocated to selling expenses, RMB25.1
million (US$3.9 million) was
allocated to general and administrative expenses, and RMB2.1 million (US$0.3
million) was allocated to research and development
expenses.
Net Loss and Non-GAAP Net Loss
Net Loss in the third quarter of 2021 was RMB654.9 million (US$101.6
million), compared to a net loss of RMB565.9 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 third
quarter of 2021 was RMB684.2 million
(US$106.2 million), compared to
non-GAAP net loss of RMB541.9 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 September 30, 2021 by segment.
Table 5 – Breakdown of non-GAAP Net
(Loss)/Income by Segment
|
Three Months
Ended September 30, 2021
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated[8]
|
Total
|
Non-GAAP Net
Income/(Loss)
|
(471,332)
|
(157,155)
|
(24,909)
|
(66,801)
|
(84,104)
|
120,150
|
(684,151)
|
[8] Unallocated
expenses are primarily related to corporate administrative expenses
and other miscellaneous items that are not allocated to individual
segments.
|
Diluted EPS and Non-GAAP Diluted EPS
Diluted EPS in the third quarter of 2021 was negative
RMB1.65 (US$0.26), based on a weighted average of 388.5
million diluted shares outstanding during the quarter. This is
compared to negative RMB1.45 on a
weighted average of 385.4 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 third quarter of 2021 was
negative RMB1.73 (US$0.27), compared to negative RMB1.39 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 third quarter of 2021 was negative
RMB481.1million (US$74.7 million), compared to negative
RMB369.5 million in same quarter of
2020. Adjusted EBITDA Margin was negative 7.1% in the third
quarter of 2021, compared to negative 4.6% 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 September 30, 2021 by segment.
Table 6 – Breakdown of Adjusted
EBITDA and Adjusted EBITDA Margin by Segment
|
Three Months Ended
September 30, 2021
|
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated[9]
|
Total
|
|
Adjusted
EBITDA
|
(348,474)
|
(140,422)
|
(15,984)
|
(61,820)
|
(78,491)
|
164,055
|
(481,136)
|
|
Adjusted EBITDA
Margin
|
(8.7%)
|
(10.3%)
|
(4.0%)
|
(20.7%)
|
(10.2%)
|
-
|
(7.1%)
|
|
[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 September 30, 2021, cash and
cash equivalents, restricted cash and short-term investments were
RMB3,378.3 million (US$524.3 million), compared to RMB3,413.3 million as of June 30, 2021. The decrease in cash and cash
equivalents, restricted cash and short-term investments was
primarily due to net cash used in operations.
Net Cash Used in Operating Activities
Net cash used in continuing operating activities was
RMB1,157.2 million (US$179.6 million), compared to net cash generated
from continuing operating activities of RMB140.9 million in the same period of 2020,
mainly due to decreased ASP for Express and Freight business
segments.
Capital Expenditures ("CAPEX")
CAPEX was RMB116.9 million
(US$18.1million), or 1.7% of total
revenue in the third quarter ended September
30, 2021, compared to CAPEX of RMB484.3 million, or 6.1% of total revenue, in
the same period of 2020.
SHARES OUTSTANDING
As of the date of this press release, the Company had
approximately 388.7 million ordinary shares
outstanding[10]. Each American Depositary Share
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 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.
WEBCAST AND CONFERENCE CALL INFORMATION
The Company will hold a conference call at 8:00 pm U.S. Eastern Time on November 16, 2021 (9:00
am Beijing Time on November 17,
2021), to discuss its financial results and operating
performance for the third 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:
|
4267111
|
A replay of the conference call will be accessible through
November 23, 2021 by dialing the
following numbers:
United
States:
|
+1-877-344-7529
|
International:
|
+1-412-317-0088
|
Replay Access
Code:
|
10161418
|
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
September 30,
|
Nine Months Ended
September 30,
|
|
2020
|
2021
|
2020
|
2021
|
|
RMB
|
RMB
|
US$
|
RMB
|
RMB
|
US$
|
Revenue
|
|
|
|
|
|
|
Express
|
5,090,682
|
3,988,291
|
618,973
|
13,631,990
|
11,982,738
|
1,859,692
|
Freight
|
1,492,965
|
1,358,305
|
210,806
|
3,551,074
|
3,931,359
|
610,137
|
Supply Chain
Management
|
452,691
|
400,551
|
62,165
|
1,369,991
|
1,327,767
|
206,066
|
Global
|
216,017
|
298,267
|
46,290
|
524,305
|
863,291
|
133,981
|
Others
|
723,784
|
766,969
|
119,032
|
1,662,310
|
2,578,565
|
400,187
|
Total
Revenue
|
7,976,139
|
6,812,383
|
1,057,266
|
20,739,670
|
20,683,720
|
3,210,063
|
Cost of
Revenue
|
|
|
|
|
|
|
Express
|
(5,205,390)
|
(4,384,494)
|
(680,463)
|
(13,570,902)
|
(12,854,832)
|
(1,995,039)
|
Freight
|
(1,473,252)
|
(1,431,988)
|
(222,241)
|
(3,532,534)
|
(3,971,496)
|
(616,367)
|
Supply Chain
Management
|
(432,945)
|
(385,443)
|
(59,820)
|
(1,297,689)
|
(1,245,479)
|
(193,295)
|
Global
|
(239,653)
|
(318,420)
|
(49,418)
|
(602,511)
|
(912,119)
|
(141,559)
|
Others
|
(683,361)
|
(797,136)
|
(123,714)
|
(1,547,948)
|
(2,542,866)
|
(394,647)
|
Total Cost of
Revenue
|
(8,034,601)
|
(7,317,481)
|
(1,135,656)
|
(20,551,584)
|
(21,526,792)
|
(3,340,907)
|
Gross (Loss)/
Profit
|
(58,462)
|
(505,098)
|
(78,390)
|
188,086
|
(843,072)
|
(130,844)
|
Selling
Expenses
|
(120,783)
|
(119,255)
|
(18,508)
|
(352,935)
|
(340,702)
|
(52,876)
|
General and
Administrative
Expenses
|
(332,680)
|
(304,169)
|
(47,206)
|
(888,483)
|
(957,807)
|
(148,649)
|
Research and
Development
Expenses
|
(44,935)
|
(61,159)
|
(9,492)
|
(137,629)
|
(175,798)
|
(27,283)
|
Total Operating
Expenses
|
(498,398)
|
(484,583)
|
(75,206)
|
(1,379,047)
|
(1,474,307)
|
(228,808)
|
Loss from
Operations
|
(556,860)
|
(989,681)
|
(153,596)
|
(1,190,961)
|
(2,317,379)
|
(359,652)
|
Interest
Income
|
18,106
|
11,188
|
1,736
|
58,106
|
44,736
|
6,943
|
Interest
Expense
|
(46,583)
|
(48,731)
|
(7,563)
|
(121,134)
|
(142,903)
|
(22,178)
|
Foreign Exchange
(Loss)/Gain
|
(7,577)
|
1,081
|
168
|
(7,335)
|
653
|
101
|
Other
Income
|
40,211
|
391,630
|
60,780
|
109,430
|
738,181
|
114,564
|
Other
Expense
|
(6,187)
|
(19,280)
|
(2,992)
|
(22,269)
|
(47,355)
|
(7,349)
|
Loss before Income
Tax
and Share of Net Loss
of Equity Investees
|
(558,890)
|
(653,793)
|
(101,467)
|
(1,174,163)
|
(1,724,067)
|
(267,571)
|
Income Tax
Expense
|
(6,997)
|
(1,051)
|
(163)
|
(15,856)
|
(2,698)
|
(419)
|
Loss before Share of
Net
loss of Equity Investees
|
(565,887)
|
(654,844)
|
(101,630)
|
(1,190,019)
|
(1,726,765)
|
(267,990)
|
Share of Net Loss of
Equity
Investees
|
(40)
|
(16)
|
(2)
|
(114)
|
(58)
|
(9)
|
Net Loss from
continuing
operations
|
(565,927)
|
(654,860)
|
(101,632)
|
(1,190,133)
|
(1,726,823)
|
(267,999)
|
Net (loss)/income
from
discontinued operations
|
(73,582)
|
4,025
|
624
|
(231,027)
|
(8,804)
|
(1,365)
|
Net
Loss
|
(639,509)
|
(650,835)
|
(101,008)
|
(1,421,160)
|
(1,735,627)
|
(269,364)
|
Net Loss from
continuing
operations attributable to
non-controlling interests
|
(5,959)
|
(12,623)
|
(1,959)
|
(20,390)
|
(23,552)
|
(3,655)
|
Net Loss
attributable to
Best Inc.
|
(633,550)
|
(638,212)
|
(99,049)
|
(1,400,770)
|
(1,712,075)
|
(265,709)
|
Summary of
Unaudited Condensed Consolidated Balance Sheets
|
(In
Thousands)
|
|
|
As of December 31,
2020
|
|
As of September
30, 2021
|
|
RMB
|
|
RMB
|
US$
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and Cash
Equivalents
|
1,383,317
|
|
966,026
|
149,925
|
Restricted
Cash
|
2,102,426
|
|
1,902,703
|
295,295
|
Accounts and Notes
Receivables
|
983,601
|
|
903,947
|
140,290
|
Inventories
|
44,133
|
|
33,963
|
5,271
|
Prepayments and Other
Current
Assets
|
3,304,670
|
|
3,246,803
|
503,896
|
Short–term
Investments
|
268,647
|
|
3,233
|
502
|
Amounts Due from
Related Parties
|
274,395
|
|
146,798
|
22,783
|
Lease Rental
Receivables
|
497,127
|
|
378,811
|
58,791
|
Assets held for
sale
|
509,395
|
|
496,811
|
77,104
|
Total Current
Assets
|
9,367,711
|
|
8,079,095
|
1,253,857
|
Non–current
Assets
|
|
|
|
|
Property and
Equipment, Net
|
4,079,235
|
|
4,314,550
|
669,608
|
Intangible Assets,
Net
|
12,198
|
|
10,217
|
1,586
|
Long–term
Investments
|
221,426
|
|
174,171
|
27,031
|
Goodwill
|
295,758
|
|
295,758
|
45,901
|
Non–current
Deposits
|
129,645
|
|
130,987
|
20,329
|
Other Non–current
Assets
|
543,949
|
|
249,748
|
38,760
|
Restricted
Cash
|
709,848
|
|
506,317
|
78,579
|
Lease Rental
Receivables
|
647,678
|
|
311,006
|
48,267
|
Operating Lease
Right-of-use Assets
|
3,863,375
|
|
3,726,884
|
578,403
|
Total non–current
Assets
|
10,503,112
|
|
9,719,638
|
1,508,464
|
Total
Assets
|
19,870,823
|
|
17,798,733
|
2,762,321
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Securitization
Debt
|
95,149
|
|
168,312
|
26,122
|
Secured
Borrowings
|
-
|
|
171,658
|
26,641
|
Convertible Senior
Notes held by
related parties
|
-
|
|
642,825
|
99,765
|
Convertible Senior
Notes held by third
parties
|
-
|
|
642,825
|
99,765
|
Short–term Bank
Loans
|
3,082,537
|
|
1,728,990
|
268,335
|
Accounts and Notes
Payable
|
4,144,948
|
|
3,840,533
|
596,041
|
Income Tax
Payable
|
14,550
|
|
1,029
|
160
|
Customer Advances and
Deposits and
Deferred Revenue
|
1,526,051
|
|
1,402,773
|
217,707
|
Accrued Expenses and
Other
Liabilities
|
2,507,917
|
|
2,908,613
|
451,410
|
Financing Lease
Liabilities
|
1,581
|
|
1,374
|
213
|
Operating Lease
Liabilities
|
1,032,461
|
|
1,079,335
|
167,510
|
Amounts Due to
Related Parties
|
35,623
|
|
619,616
|
96,163
|
Liabilities held for
sale
|
193,432
|
|
205,754
|
31,933
|
Total Current
Liabilities
|
12,634,249
|
|
13,413,637
|
2,081,765
|
Summary of
Unaudited Condensed Consolidated Balance Sheets
(Cont'd)
|
(In
Thousands)
|
|
|
As of December 31,
2020
|
|
As of September
30, 2021
|
|
RMB
|
|
RMB
|
US$
|
Non-current
Liabilities
|
|
|
|
|
Convertible Senior
Notes held by
related parties
|
1,617,846
|
|
971,042
|
150,703
|
Secured
Borrowings
|
-
|
|
109,466
|
16,989
|
Convertible Senior
Notes held by third
parties
|
642,121
|
|
-
|
-
|
Operating Lease
Liabilities
|
2,995,173
|
|
2,850,987
|
442,466
|
Financing Lease
Liabilities
|
2,698
|
|
1,695
|
263
|
Other Non–current
Liabilities
|
175,584
|
|
121,353
|
18,834
|
Long-term Bank
Loans
|
78,548
|
|
75,918
|
11,782
|
Total Non–current
Liabilities
|
5,511,970
|
|
4,130,461
|
641,037
|
Total
Liabilities
|
18,146,219
|
|
17,544,098
|
2,722,802
|
Mezzanine
Equity:
|
|
|
|
|
Convertible
Non-controlling Interests
|
-
|
|
184,421
|
28,622
|
Total mezzanine
equity
|
-
|
|
184,421
|
28,622
|
Shareholders'
Equity
|
|
|
|
|
Ordinary
Shares
|
25,988
|
|
25,988
|
4,033
|
Treasury
Shares
|
(211,352)
|
|
(126,190)
|
(19,584)
|
Additional Paid–In
Capital
|
19,487,232
|
|
19,490,101
|
3,024,816
|
Statutory
Reserves
|
8,038
|
|
5,103
|
792
|
Accumulated
Deficit
|
(17,710,964)
|
|
(19,420,104)[11]
|
(3,013,953)
|
Accumulated Other
Comprehensive Income
|
151,677
|
|
135,637
|
21,051
|
BEST Inc.
Shareholders' Equity
|
1,750,619
|
|
110,535
|
17,155
|
Non-controlling
Interests
|
(26,015)
|
|
(40,321)
|
(6,258)
|
Total
Shareholders' Equity
|
1,724,604
|
|
70,214
|
10,897
|
Total Liabilities,
Mezzanine Equity
and
Shareholders' Equity
|
19,870,823
|
|
17,798,733
|
2,762,321
|
[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 RMB9,926,297
|
Summary of
Unaudited Condensed Consolidated Statements of Cash
Flows
|
(In
Thousands)
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
2020
|
2021
|
2020
|
2021
|
|
RMB
|
RMB
|
US$
|
RMB
|
RMB
|
US$
|
Net cash generated
from/(used in)
continuing operating activities
|
140,915
|
(1,157,227)
|
(179,599)
|
(335,749)
|
(1,848,381)
|
(286,864)
|
Net cash used in
discontinued
operating activities
|
(25,564)
|
(1,019)
|
(158)
|
(119,807)
|
(59,408)
|
(9,220)
|
Net cash generated
from/(used in)
operating activities
|
115,351
|
(1,158,246)
|
(179,757)
|
(455,556)
|
(1,907,789)
|
(296,084)
|
Net cash (used
in)/generated from
continuing investing activities
|
(540,706)
|
1,054,911
|
163,720
|
(709,472)
|
1,403,281
|
217,786
|
Net cash generated
from/(used in)
discontinued Investing activities
|
1,047
|
-
|
-
|
646
|
(217)
|
(34)
|
Net cash
(used in) /generated
from investing activities
|
(539,659)
|
1,054,911
|
163,720
|
(708,826)
|
1,403,064
|
217,752
|
Net cash generated
from/(used in)
continuing financing activities
|
421,217
|
59,389
|
9,217
|
1,933,283
|
(18,525)
|
(2,875)
|
Net cash used in
discontinued
financing activities
|
(50,000)
|
-
|
-
|
(195,000)
|
(280,000)
|
(43,455)
|
Net cash generated
from /(used
in) financing activities
|
371,217
|
59,389
|
9,217
|
1,738,283
|
(298,525)
|
(46,330)
|
Exchange Rate Effect
on Cash,
Cash Equivalents, and Restricted
Cash
|
(106,521)
|
3,895
|
604
|
(81,332)
|
(26,520)
|
(4,116)
|
Net
(decrease)/increase in Cash
and Cash Equivalents, and
Restricted Cash
|
(159,612)
|
(40,051)
|
(6,216)
|
492,569
|
(829,770)
|
(128,778)
|
Cash and Cash
Equivalents, and
Restricted Cash at Beginning of
Period
|
4,609,396
|
3,419,402
|
530,683
|
3,957,215
|
4,209,121
|
653,245
|
Cash and Cash
Equivalents, and
Restricted Cash at End of
Period
|
4,449,784
|
3,379,351
|
524,467
|
4,449,784
|
3,379,351
|
524,467
|
Less: Cash and Cash
Equivalents,
and Restricted Cash held for
sales at end of the Period
|
1,404
|
4,305
|
668
|
1,404
|
4,305
|
668
|
Cash and Cash
Equivalents, and
Restricted Cash from
continuing operations at End of
Period
|
4,448,380
|
3,375,046
|
523,799
|
4,448,380
|
3,375,046
|
523,799
|
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 September 30, 2021
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated[12]
|
Total
|
Net
(Loss)/Profit
|
(473,788)
|
(160,060)
|
(27,069)
|
(68,869)
|
(84,829)
|
159,755
|
(654,860)
|
Add:
|
|
|
|
|
|
|
|
Depreciation &
Amortization
|
122,858
|
16,733
|
9,055
|
4,981
|
4,431
|
6,363
|
164,421
|
Interest
Expense
|
-
|
-
|
-
|
-
|
-
|
48,731
|
48,731
|
Income Tax
(Benefit)/Expense
|
-
|
-
|
(130)
|
-
|
1,182
|
(1)
|
1,051
|
Subtract:
|
|
|
|
|
|
|
|
Interest
Income
|
-
|
-
|
-
|
-
|
-
|
(11,188)
|
(11,188)
|
EBITDA
|
(350,930)
|
(143,327)
|
(18,144)
|
(63,888)
|
(79,216)
|
203,660
|
(451,845)
|
Add:
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
2,456
|
2,905
|
2,160
|
2,068
|
725
|
19,038
|
29,352
|
Subtract:
|
|
|
|
|
|
|
|
Gain
from appreciation
of investments
|
-
|
-
|
-
|
-
|
-
|
(58,643)
|
(58,643)
|
Adjusted
EBITDA
|
(348,474)
|
(140,422)
|
(15,984)
|
(61,820)
|
(78,491)
|
164,055
|
(481,136)
|
Adjusted
EBITDA
Margin
|
(8.7%)
|
(10.3%)
|
(4.0%)
|
(20.7%)
|
(10.2%)
|
-
|
(7.1%)
|
|
Three Months
Ended September 30, 2020
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated[13]
|
Total
|
Net
Loss
|
(291,365)
|
(56,027)
|
(39,729)
|
(66,984)
|
(35,077)
|
(76,745)
|
(565,927)
|
Add:
|
|
|
|
|
|
|
|
Depreciation &
Amortization
|
98,294
|
16,357
|
10,120
|
4,320
|
1,773
|
7,005
|
137,869
|
Interest
Expense
|
-
|
-
|
-
|
-
|
-
|
46,583
|
46,583
|
Income Tax
Expense/(Benefit)
|
1,616
|
-
|
-
|
(273)
|
5,654
|
-
|
6,997
|
Subtract:
|
|
|
|
|
|
|
|
Interest
Income
|
-
|
-
|
-
|
-
|
-
|
(18,106)
|
(18,106)
|
EBITDA
|
(191,455)
|
(39,670)
|
(29,609)
|
(62,937)
|
(27,650)
|
(41,263)
|
(392,584)
|
Add:
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
3,712
|
2,702
|
2,948
|
2,238
|
935
|
20,374
|
32,909
|
Subtract:
|
|
|
|
|
|
|
|
Gain from
appreciation of investments
|
-
|
-
|
-
|
-
|
-
|
(9,838)
|
(9,838)
|
Adjusted
EBITDA
|
(187,743)
|
(36,968)
|
(26,661)
|
(60,699)
|
(26,715)
|
(30,727)
|
(369,513)
|
Adjusted
EBITDA
Margin
|
(3.7%)
|
(2.5%)
|
(5.9%)
|
(28.1%)
|
(3.7%)
|
-
|
(4.6%)
|
[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 September 30, 2021
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated[14]
|
Total
|
Net
(Loss)/Profit
|
(473,788)
|
(160,060)
|
(27,069)
|
(68,869)
|
(84,829)
|
159,755
|
(654,860)
|
Add:
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
2,456
|
2,905
|
2,160
|
2,068
|
725
|
19,038
|
29,352
|
Subtract:
|
|
|
|
|
|
|
|
Gain from
appreciation of
investments
|
-
|
-
|
-
|
-
|
-
|
(58,643)
|
(58,643)
|
Non-GAAP
Net (Loss)/Profit
|
(471,332)
|
(157,155)
|
(24,909)
|
(66,801)
|
(84,104)
|
120,150
|
(684,151)
|
Non-GAAP
Net (Loss)/Profit
Margin
|
(11.8%)
|
(11.6%)
|
(6.2%)
|
(22.4%)
|
(11.0%)
|
-
|
(10.0%)
|
|
Three Months
Ended September 30, 2020
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated[15]
|
Total
|
Net
Profit/(Loss)
|
(291,365)
|
(56,027)
|
(39,729)
|
(66,984)
|
(35,077)
|
(76,745)
|
(565,927)
|
Add:
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
3,712
|
2,702
|
2,948
|
2,238
|
935
|
20,374
|
32,909
|
Amortization of
Intangible Assets
Resulting from
Business
|
-
|
-
|
-
|
916
|
-
|
-
|
916
|
Subtract:
|
|
|
|
|
|
|
|
Gain from
appreciation of investments
|
-
|
-
|
-
|
-
|
-
|
(9,838)
|
(9,838)
|
Non-GAAP
Net Profit/(Loss)
|
(287,653)
|
(53,325)
|
(36,781)
|
(63,830)
|
(34,142)
|
(66,209)
|
(541,940)
|
Non-GAAP
Net Profit/(Loss)
Margin
|
(5.7%)
|
(3.6%)
|
(8.1%)
|
(29.5%)
|
(4.7%)
|
-
|
(6.8%)
|
[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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
2021
|
(In
'000)
|
RMB
|
US$
|
|
RMB
|
US$
|
Net Loss Attributable
to Ordinary
Shareholders
|
(642,237)
|
(99,673)
|
|
(1,703,271)
|
(264,344)
|
Add:
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
29,352
|
4,556
|
|
90,052
|
13,976
|
Subtract:
|
|
|
|
|
|
Gain from appreciation
of
investments
|
(58,643)
|
(9,101)
|
|
(64,205)
|
(9,964)
|
Non-GAAP Net Loss
Attributable to
Ordinary Shareholders for
Computing Non-GAAP Diluted
EPS
|
(671,528)
|
(104,218)
|
|
(1,677,424)
|
(260,332)
|
Weighted Average
Diluted Shares
Outstanding During the Period
|
|
|
|
|
|
Diluted
|
388,538,709
|
388,538,709
|
|
387,814,480
|
387,814,480
|
Diluted
(Non-GAAP)
|
388,538,709
|
388,538,709
|
|
387,814,480
|
387,814,480
|
Diluted
EPS
|
(1.65)
|
(0.26)
|
|
(4.39)
|
(0.68)
|
Add:
|
|
|
|
|
|
Non-GAAP adjustment to
net
loss per share
|
(0.08)
|
(0.01)
|
|
0.06
|
0.01
|
Non-GAAP Diluted
EPS
|
(1.73)
|
(0.27)
|
|
(4.33)
|
(0.67)
|
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SOURCE BEST Inc.