HANGZHOU, China, June 8, 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 March 31,
2021.
Johnny Chou, Founder, Chairman
and Chief Executive Officer of BEST, commented, "Our first quarter
results reflected a mix of both the progress brought about by our
November 2020 strategic refocusing
plan and the ongoing challenges we are still facing. Our execution
of the strategic refocusing plan delivered substantial improvement
in Freight, Supply Chain Management and Global, as reflected in
their top line growth along with strong gross margin expansion. We
continued to solidify our leading position in the freight market,
while refocusing our efforts on high-margin accounts for Supply
Chain Management. We also gained ground in the Southeast Asian
market through Global despite the COVID-19 pandemic."
"For Express, our strategies are on the right track, and the
rapidly evolving competitive landscape requires us to quicken the
pace of our action. Our accelerated measures will focus on
networking stability and service quality by optimizing the
structure of products, customers and franchisee partners, in order
to create a clear path to sustainable profitability."
"Although we expect the turnaround of Express to take
approximately 6 to 9 months, we have a solid, clear strategic
direction targeting sustainable development, supported by the
attractive growth prospects of e-commerce and the unique value
proposition of our integrated smart supply chain solutions and
logistics services. We are fully dedicated to positioning our
company for long-term success."
Gloria Fan, BEST's Chief
Financial Officer, commented, "In the first quarter of 2021, our
revenue reached RMB6.5 billion,
increasing 29.9% year-over-year while our net loss was RMB604 million as our initiatives for Express
need time to materialize at the bottom line. Our focus today
continues to be on cost reduction across the entire organization,
including unit cost structure optimization for Express and Freight,
as well as the streamlining of SG&A expenses. As we navigate
through the current environment, we are making various strategic
evaluations and are prepared to take appropriate actions to
strengthen our balance sheet and liquidity to support our strategic
refocusing plan. In particular, we are looking at financing options
in relation to certain of our business units, and we will provide
details as necessary or appropriate if any definitive step is
taken."
FINANCIAL HIGHLIGHTS([1])
For the Quarter Ended March 31,
2021:
- Revenue was RMB6,496.6
million (US$991.6 million), an
increase of 29.9% year-over-year ("YoY"). The increase was
primarily due to a strong increase in Express and Freight volume,
partially offset by a decrease in average selling price ("ASP") in
Express and Freight business segments.
- Gross Loss was RMB193.4
million (US$29.5 million),
compared to gross loss of RMB238.0
million in the same period of 2020. Gross Loss Margin
was 3.0%, an improvement of 1.8 percentage points ("ppts")
YoY.
- Net Loss was RMB604.5
million (US$92.3 million),
compared to a net loss of RMB666.9
million in the same period of 2020. Non-GAAP Net
Loss([2])([3]) was RMB581.1
million (US$88.7 million),
compared to non-GAAP net loss of RMB632.3
million in the same period of 2020.
- Diluted EPS([4]) was negative RMB1.55 (US$0.24),
compared to negative RMB1.69 in the
same period of 2020. Non-GAAP Diluted EPS(3)(4) was negative
RMB1.49 (US$0.23), compared to negative RMB1.60 in the same period of 2020.
- EBITDA([5]) was negative RMB420.3 million (US$64.2
million), compared to negative RMB536.2 million in the same period of 2020.
Adjusted EBITDA(3)(5) was negative RMB396.9 million (US$60.6
million), compared to negative RMB502.6 million in the same period of 2020.
BUSINESS HIGHLIGHTS([6])
BEST Express – We continued to focus on optimizing
product structure, improving network stability and flexibility, as
well as enhancing service quality and customer experience during
the first quarter. While the results from these actions are not
fully visible from our financial results, we believe they have
improved the underlying fundamentals of our network and we will
further accelerate our actions to target a return to profitability
later in the year.
During the quarter, parcel volume increased by 33.6% YoY. Gross
margin contracted by 3.2 ppts due to a decline in ASP per parcel of
17.6% YoY, partially offset by a decrease in average cost per
parcel of 15.1% YoY.
BEST Freight – Freight once again delivered a strong
quarter with a higher-than-industry-average growth rate and
improving profitability. The Company continued to emphasize the
e-commerce aspect of its freight services, solidify its leadership
position and brand recognition, and improve operating efficiency.
Freight volume increased by 81.0% YoY in the first quarter of 2021.
Average cost per tonne and ASP per tonne decreased by 20.6% YoY and
5.4% YoY, respectively.
BEST Supply Chain Management – The total number of orders
fulfilled by Cloud OFCs increased by 20.6% YoY to 100.8 million in
the first quarter of 2021 and the total number of orders fulfilled
by franchised Cloud OFCs increased by 30.6% YoY to 52.8 million.
The number of franchised OFCs increased by 15.2% YoY to 348 in the
first quarter of 2021. In the first quarter of 2021, gross margin
for Supply Chain Management was 5.4%, compared with 0.8% in the
first quarter of 2020, benefitting from cost reduction efforts and
discontinuation of legacy low-margin accounts.
BEST Global – Global continued to expand both
cross-border and in Southeast Asia
with strong margin improvement. In the first quarter of 2021,
parcel volume in Southeast Asia
increased by 249% YoY to 30.8 million. Global's gross margin
improved significantly by 22.2 ppts YoY due to better economies of
scale.
Others – In respect of UCargo, as of
March 31, 2021, the number of
registered drivers on the UCargo mobile app increased by 66.2% YoY
to 347,854. In the first quarter of 2021, the total number of
transactions on the trucking brokerage platform increased by 65.4%
YoY to 185,676.
([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
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]) 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)
|
March 31,
2019
|
|
March
31,
2020
|
|
March
31,
2021
|
|
2020 vs
2019
|
|
2021 vs
2020
|
1,340,540
|
1,315,525
|
1,756,957
|
(1.9%)
|
33.6%
|
Freight Volume (Tonne
in '000)
|
1,268
|
1,074
|
1,945
|
|
(15.3%)
|
81.0%
|
Supply Chain
Management
Orders Fulfilled (in '000)
|
61,964
|
83,596
|
100,784
|
|
34.9%
|
20.6%
|
Global Parcel Volume
in
Southeast Asia (in '000)
|
237
|
|
8,840
|
|
30,841
|
|
3,624%
|
|
249%
|
UCargo Number of
Transactions (in '000)
|
120
|
|
112
|
|
186
|
|
(6.4%)
|
|
65.4%
|
Environmental Social and Governance (ESG) Report
On June 8, 2021, the Company
released its third ESG report, which can be accessed via the
following link: http://www.best-inc.com/2020ESGReportIIvPUB.pdf
FINANCIAL RESULTS
For the Quarter Ended March 31,
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
|
|
|
March 31,
2020
|
|
March 31,
2021
|
|
|
(In '000, except
for %)
|
RMB
|
% of
Revenue
|
|
RMB
|
US$
|
% of
Revenue
|
|
% Change
YoY
|
Express
|
3,375,612
|
67.6%
|
|
3,713,080
|
566,727
|
57.1%
|
|
10.0%
|
Freight
|
687,247
|
13.7%
|
|
1,174,493
|
179,263
|
18.1%
|
|
70.9%
|
Supply Chain
Management
|
407,592
|
8.1%
|
|
447,661
|
68,326
|
6.9%
|
|
9.8%
|
Global
|
115,788
|
2.3%
|
|
250,422
|
38,222
|
3.9%
|
|
116.3%
|
Others([7])
|
416,382
|
8.3%
|
|
910,983
|
139,043
|
14.0%
|
|
118.8%
|
Total
Revenue
|
5,002,621
|
100.0%
|
|
6,496,639
|
991,581
|
100.0%
|
|
29.9%
|
- Express Service Revenue increased by 10.0% YoY to RMB3,713.1 million (US$566.7 million) from RMB3,375.6 million, primarily due to a 33.6% YoY
increase in parcel volume, partially offset by a 17.6% YoY decrease
in ASP per parcel. The decrease in ASP per parcel is primarily
attributable to competitive market dynamics.
- Freight Service Revenue increased by 70.9% YoY to RMB1,174.5 million (US$179.3 million) from RMB687.2 million, primarily due to an 81.0% YoY
increase in freight volume, partially offset by a 5.4% YoY decrease
in ASP per tonne.
- Supply Chain Management Service Revenue increased by 9.8% YoY
to RMB447.7 million (US$68.3 million) from RMB407.6 million, primarily due to a 20.6% YoY
increase in the total number of orders fulfilled by Cloud
OFCs.
- Global Service Revenue increased by 116.3% YoY to RMB250.4 million (US$38.2
million) from RMB115.8
million, primarily due to strong growth in parcel volumes in
Southeast Asia.
- Others Services Revenue increased by 118.8% YoY to RMB911.0 million (US$139.0
million) from RMB416.4
million, primarily due to a strong increase in total number
of transactions of UCargo business.
([7]) "Others"
Segment represents UCargo and Capital business
units.
|
Cost of Revenue
The following table sets forth a breakdown of cost of revenue by
business segment for the periods indicated.
Table 2 –
Breakdown of Cost of Revenue by Business Segment
|
|
|
|
Three Months
Ended
|
|
% of
Revenue
Change
YoY
|
|
March 31,
2020
|
|
March 31,
2021
|
|
(In '000, except
for %)
|
RMB
|
% of
Revenue
|
|
RMB
|
US$
|
% of
Revenue
|
|
Express
|
(3,491,321)
|
103.4%
|
|
(3,958,127)
|
(604,128)
|
106.6%
|
|
3.2ppts
|
Freight
|
(816,435)
|
118.8%
|
|
(1,173,930)
|
(179,177)
|
100.0%
|
|
(18.8ppts)
|
Supply Chain
Management
|
(404,446)
|
99.2%
|
|
(423,506)
|
(64,640)
|
94.6%
|
|
(4.6ppts)
|
Global
|
(148,318)
|
128.1%
|
|
(265,102)
|
(40,462)
|
105.9%
|
|
(22.2ppts)
|
Others
|
(380,096)
|
91.3%
|
|
(869,329)
|
(132,686)
|
95.4%
|
|
4.1ppts
|
Total Cost of
Revenue
|
(5,240,616)
|
104.8%
|
|
(6,689,994)
|
(1,021,093)
|
103.0%
|
|
(1.8ppts)
|
Cost of Revenue was RMB6,690.0
million (US$1,021.1 million)
or 103.0% of revenue in the first quarter of 2021, compared to
RMB5,240.6 million or 104.8% of
revenue in the same quarter of 2021. The decrease of 1.8 ppts in
cost of revenue as a percentage of revenue was primarily
attributable to a steeper decrease in unit cost than ASP for
Freight and Global business units and discontinuation of certain
low-margin accounts for Supply Chain business unit.
Table 3 –
Breakdown of Average Cost Per Parcel and Average Cost Per
Tonne
|
|
|
|
|
Three Months
Ended
|
|
%
Change
|
(in RMB)
|
March 31, 2020
|
March 31,
2021
|
|
YoY
|
Express:
|
|
|
|
|
Average Cost Per
Parcel
|
2.65
|
2.25
|
|
(15.1%)
|
Average Transportation
Cost Per Parcel
|
0.69
|
0.63
|
|
(8.7%)
|
Average Labor Cost Per
Parcel
|
0.26
|
0.23
|
|
(11.5%)
|
Average Lease Cost Per
Parcel
|
0.15
|
0.13
|
|
(13.3%)
|
Average Other Cost Per
Parcel
|
0.15
|
0.09
|
|
(40.0%)
|
Average Last-mile Cost
Per Parcel
|
1.40
|
1.17
|
|
(16.4%)
|
Freight:
|
|
|
|
|
Average Cost Per
Tonne
|
759.9
|
603.6
|
|
(20.6%)
|
Gross Loss was RMB193.4
million (US$29.5 million) in
the first quarter of 2021, compared to gross loss of RMB238.0 million in the same period of 2020.
Gross Loss Margin was 3.0%, an improvement of 1.8 percentage
points ("ppts") YoY.
Operating Expenses
The following table sets forth a breakdown of operating expenses
and adjusted operating expenses by category for the
periods indicated.
Table 4 –
Breakdown of Operating Expenses and Adjusted Operating Expenses by
Category
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2020
|
|
March 31,
2021
|
|
(In '000, except
for %)
|
RMB
|
% of
Revenue
|
|
RMB
|
US$
|
% of
Revenue
|
|
% of Revenue
Change
YoY
|
Selling, General
and
Administrative Expenses
|
(384,107)
|
7.7%
|
|
(416,435)
|
(63,561)
|
6.4%
|
|
(1.3ppts)
|
Adjusted
for
SBC Expenses
|
(31,614)
|
0.7%
|
|
(26,761)
|
(4,085)
|
0.4%
|
|
(0.3ppts)
|
Adjusted Selling,
General
and
Administrative Expenses
|
(352,493)
|
7.0%
|
|
(389,674)
|
(59,476)
|
6.0%
|
|
(1.0ppts)
|
Research and
Development Expenses
|
(50,692)
|
1.0%
|
|
(53,687)
|
(8,194)
|
0.8%
|
|
(0.2ppts)
|
Adjusted for
SBC Expenses
|
(1,354)
|
0.0%
|
|
(1,939)
|
(296)
|
0.0%
|
|
0.0ppts
|
Adjusted Research
and
Development Expenses
|
(49,338)
|
1.0%
|
|
(51,748)
|
(7,898)
|
0.8%
|
|
(0.2ppts)
|
Total Operating
Expenses
|
(434,799)
|
8.7%
|
|
(470,122)
|
(71,755)
|
7.2%
|
|
(1.5ppts)
|
Adjusted
for
SBC Expenses
|
(32,968)
|
0.7%
|
|
(28,700)
|
(4,381)
|
0.4%
|
|
(0.3ppts)
|
Adjusted Total
Operating Expenses
|
(401,831)
|
8.0%
|
|
(441,422)
|
(67,374)
|
6.8%
|
|
(1.2ppts)
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses were
RMB416.4 million (US$63.6 million) or 6.4% of revenue in the first
quarter of 2021, compared to RMB384.1
million or 7.7% of revenue in the same quarter of 2020. The
decrease in selling, general and administrative expenses as a
percentage of revenue was primarily attributable to improved
operating efficiencies.
Research and Development Expenses were RMB53.7 million (US$8.2
million) or 0.8% of revenue in the first quarter of 2021,
compared to RMB50.7 million, or 1.0%
of revenue in the same quarter of 2020.
Share-based Compensation ("SBC") Expenses included in the
cost and expense items above in the first quarter of 2021 were
RMB29.0 million (US$4.4 million), compared to RMB33.6 million in the same quarter of 2020. In
the first quarter of 2021, RMB0.3
million (US$0.04 million) was
allocated to cost of revenue, RMB1.5
million (US$0.2 million) was
allocated to selling expenses, RMB25.3
million (US$3.9 million) was
allocated to general and administrative expenses, and RMB1.9 million (US$0.3
million) was allocated to research and development
expenses.
Net Loss and Non-GAAP Net Loss
Net Loss in the first quarter of 2021 was RMB604.5 million (US$92.3
million), compared to a net loss of RMB666.9 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 first
quarter of 2021 was RMB581.1 million
(US$88.7 million), compared to
non-GAAP net loss of RMB632.3 million
in the same quarter of 2020.
The following table sets forth a breakdown of non-GAAP net loss
for the three months ended March 31,
2021 by segment.
Table
5 – Breakdown of non-GAAP Net Loss by
Segment
|
|
|
|
|
Three Months Ended
March 31, 2021
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated([8])
|
Total
|
|
Non-GAAP Net
Loss
|
(419,035)
|
(44,144)
|
(10,069)
|
(56,094)
|
(4,881)
|
(46,843)
|
(581,066)
|
|
Diluted EPS and Non-GAAP Diluted EPS
Diluted EPS in the first quarter of 2021 was negative
RMB1.55 (US$0.24), based on a weighted average of 386.8
million diluted shares outstanding during the quarter. This is
compared to negative RMB1.69 on a
weighted average of 389.8 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 first quarter of 2021 was
negative RMB1.49 (US$0.23), compared to negative RMB1.60 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 first quarter of 2021 was negative
RMB396.9 million (US$60.6 million), compared to negative
RMB502.6 million in same quarter of
2020. Adjusted EBITDA Margin was negative 6.1% in the first
quarter of 2021, compared to negative 10.0% 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 March 31, 2021 by segment.
Table
6 – Breakdown of Adjusted EBITDA and Adjusted
EBITDA Margin by Segment
|
|
|
|
|
Three Months Ended
March 31, 2021
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated([9])
|
Total
|
|
Adjusted
EBITDA
|
(311,398)
|
(25,887)
|
167
|
(51,920)
|
3,083
|
(10,947)
|
(396,902)
|
|
Adjusted
EBITDA
Margin
|
(8.4%)
|
(2.2%)
|
0.0%
|
(20.7%)
|
0.3%
|
-
|
(6.1%)
|
|
([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 March 31, 2021, cash and
cash equivalents, restricted cash and short-term investments were
RMB3,976.8 million (US$607.0 million), compared to RMB4,464.2 million as of December 31, 2020. The decrease in cash and cash
equivalents, restricted cash and short-term investments was
primarily due to net cash used in operating activities.
Net Cash Used in Operating Activities
Net cash used in continuing operating activities was
RMB563.6 million (US$86.0 million), compared to RMB1,230.9 million in the same period of 2020.
The improvement in net cash used in continuing operating activities
was mainly due to increased volume for the Express and Freight
business segments.
Capital Expenditures ("CAPEX")
CAPEX was RMB254.3 million
(US$38.8 million), or 3.9% of total
revenue in the first quarter ended March 31,
2021, compared to CAPEX of RMB345.9
million, or 6.9% of total revenue, in the same period of
2020.
SHARES OUTSTANDING
As of the date of this press release, the Company had
approximately 388.2 million ordinary shares
outstanding([10]). Each American Depositary Share
represents one Class A ordinary share.
FINANCIAL GUIDANCE
Based on current market conditions and current operations, the
Company expects its revenue for the full fiscal year of 2021 to be
between RMB34 billion and
RMB36 billion. This forecast reflects
management's current and preliminary expectation, which is subject
to change.
RESIGNATION OF INDEPENDENT
DIRECTOR
Ms. Quan Hao, an independent
director and chairman of the audit committee of the Company, has
resigned from these positions due to personal reasons, effective
July 31, 2021. Ms. Hao's resignation
is not a result of any disagreement with the Company, its board of
directors or its management.
Mr. Mark Qiu, an independent
director and a member of the Company's audit committee, will be
appointed as the chairman of the audit committee. Meanwhile, the
Company will search for a candidate to succeed Ms. Hao's position
as an independent director and a member of the audit committee.
([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 June 8, 2021 (9:00
am Beijing Time on June 9,
2021), to discuss its financial results and operating
performance for the first 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
|
: 0305868
|
A replay of the conference call will be accessible through
June 15, 2021 by dialing the
following numbers:
United
States
|
:
+1-877-344-7529
|
International
|
:
+1-412-317-0088
|
Replay Access
Code
|
: 10156760
|
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/.
For investor and media inquiries, please contact:
BEST Inc.
Investor relations
team
ir@best-inc.com
The Piacente Group, Inc.
Yang
Song
Tel: +86-10-6508-0677
E-mail: best@tpg-ir.com
The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: best@tpg-ir.com
SAFE HARBOR STATEMENT
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. Among other things,
the business outlook and quotations from management in this
announcement, as well as BEST's strategic and operational plans,
contain forward-looking statements. BEST may also make written or
oral forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission (the "SEC"), in its annual
report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including statements about BEST's beliefs and expectations,
are forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: BEST's goals and strategies; BEST's future business
development, results of operations and financial condition; BEST 's
ability to maintain and enhance its ecosystem; BEST 's ability to
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/profit margin, adjusted EBITDA, adjusted EBITDA margin,
EBITDA, adjusted selling expenses, adjusted general and
administrative expenses, adjusted research and development
expenses, and non-GAAP diluted EPS, as supplemental measures in the
evaluation of the Company's operating results and in the Company's
financial and operational decision-making. The Company believes
these non-GAAP financial measures that help identify underlying
trends in the Company's business that could otherwise be distorted
by the effect of the expenses and gains that the Company includes
in loss from operations and net loss. The Company believes that
these non-GAAP financial measures provide useful information about
its operating results, enhance the overall understanding of its
past performance and future prospects and allow for greater
visibility with respect to key metrics used by the Company's
management in its financial and operational decision-making. The
presentation of these non-GAAP financial measures is not intended
to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with U.S. GAAP.
For more information on these non-GAAP financial measures, please
see the table captioned "Reconciliations of Non-GAAP Measures to
the Nearest Comparable GAAP Measures" in the results
announcement.
The non-GAAP financial measures are provided as additional
information to help investors compare business trends among
different reporting periods on a consistent basis and to enhance
investors' overall understanding of the Company's current financial
performance and prospects for the future. These non-GAAP financial
measures should be considered in addition to results prepared in
accordance with U.S. GAAP, but should not be considered a
substitute for, or superior to, U.S. GAAP results. In addition, the
Company's calculation of the non-GAAP financial measures may be
different from the calculation used by other companies, and
therefore comparability may be limited.
Summary of
Unaudited Condensed Consolidated Income Statements
(In
Thousands)
|
|
|
Three Months Ended
March 31,
|
|
2020
|
2021
|
|
RMB
|
RMB
|
US$
|
Revenue
|
|
|
|
Express
|
3,375,612
|
3,713,080
|
566,727
|
Freight
|
687,247
|
1,174,493
|
179,263
|
Supply Chain
Management
|
407,592
|
447,661
|
68,326
|
Global
|
115,788
|
250,422
|
38,222
|
Others
|
416,382
|
910,983
|
139,043
|
Total
Revenue
|
5,002,621
|
6,496,639
|
991,581
|
Cost of
Revenue
|
|
|
|
Express
|
(3,491,321)
|
(3,958,127)
|
(604,128)
|
Freight
|
(816,435)
|
(1,173,930)
|
(179,177)
|
Supply Chain
Management
|
(404,446)
|
(423,506)
|
(64,640)
|
Global
|
(148,318)
|
(265,102)
|
(40,462)
|
Others
|
(380,096)
|
(869,329)
|
(132,686)
|
Total Cost of
Revenue
|
(5,240,616)
|
(6,689,994)
|
(1,021,093)
|
Gross
Loss
|
(237,995)
|
(193,355)
|
(29,512)
|
Selling
Expenses
|
(118,115)
|
(107,205)
|
(16,363)
|
General and
Administrative Expenses
|
(265,992)
|
(309,230)
|
(47,198)
|
Research and
Development Expenses
|
(50,692)
|
(53,687)
|
(8,194)
|
Total Operating
Expenses
|
(434,799)
|
(470,122)
|
(71,755)
|
Loss from
Operations
|
(672,794)
|
(663,477)
|
(101,267)
|
Interest
Income
|
21,585
|
16,878
|
2,576
|
Interest
Expense
|
(33,172)
|
(46,007)
|
(7,022)
|
Foreign Exchange
Gain
|
390
|
800
|
122
|
Other
Income
|
32,793
|
109,444
|
16,704
|
Other
Expense
|
(11,110)
|
(17,817)
|
(2,719)
|
Loss before Income
Tax and Share of
Net Loss of Equity Investees
|
(662,308)
|
(600,179)
|
(91,606)
|
Income Tax
Expense
|
(4,535)
|
(4,290)
|
(655)
|
Loss before Share of
Net loss of Equity
Investees
|
(666,843)
|
(604,469)
|
(92,261)
|
Share of Net Loss of
Equity Investees
|
(30)
|
-
|
-
|
Net Loss from
continuing operations
|
(666,873)
|
(604,469)
|
(92,261)
|
Net loss from
discontinued operations
|
(83,879)
|
(13,836)
|
(2,113)
|
Net
Loss
|
(750,752)
|
(618,305)
|
(94,374)
|
Net Loss from
continuing operations
attributable to non-controlling interests
|
(7,860)
|
(5,410)
|
(826)
|
Net Loss
attributable to Best Inc.
|
(742,892)
|
(612,895)
|
(93,548)
|
Summary of
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
|
|
|
As of December 31,
2020
|
|
As of March 31,
2021
|
|
RMB
|
|
RMB
|
US$
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and Cash
Equivalents
|
1,383,317
|
|
1,011,247
|
154,347
|
Restricted
Cash
|
2,102,426
|
|
2,136,791
|
326,138
|
Accounts and Notes
Receivables
|
983,601
|
|
885,032
|
135,082
|
Inventories
|
44,133
|
|
34,434
|
5,256
|
Prepayments and Other
Current Assets
|
3,304,670
|
|
3,258,700
|
497,378
|
Short–term
Investments
|
268,647
|
|
296,612
|
45,272
|
Amounts Due from
Related Parties
|
274,395
|
|
153,502
|
23,429
|
Lease Rental
Receivables
|
497,127
|
|
479,123
|
73,128
|
Assets held for
sale
|
509,395
|
|
481,893
|
73,551
|
Total Current
Assets
|
9,367,711
|
|
8,737,334
|
1,333,581
|
Non–current
Assets
|
|
|
|
|
Property and
Equipment, Net
|
4,079,235
|
|
4,131,122
|
630,532
|
Intangible Assets,
Net
|
12,198
|
|
12,980
|
1,981
|
Long–term
Investments
|
221,426
|
|
202,645
|
30,930
|
Goodwill
|
295,758
|
|
295,758
|
45,141
|
Non–current
Deposits
|
129,645
|
|
127,901
|
19,522
|
Other Non–current
Assets
|
543,949
|
|
423,971
|
64,711
|
Restricted
Cash
|
709,848
|
|
532,136
|
81,220
|
Lease Rental
Receivables
|
647,678
|
|
556,003
|
84,863
|
Operating Lease
Right-of-use Assets
|
3,863,375
|
|
3,724,220
|
568,427
|
Total non–current
Assets
|
10,503,112
|
|
10,006,736
|
1,527,327
|
Total
Assets
|
19,870,823
|
|
18,744,070
|
2,860,908
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Securitization
Debt
|
95,149
|
|
382,917
|
58,445
|
Short–term Bank
Loans
|
3,082,537
|
|
2,806,006
|
428,280
|
Accounts and Notes
Payable
|
4,144,948
|
|
3,902,061
|
595,571
|
Income Tax
Payable
|
14,550
|
|
11,677
|
1,782
|
Customer Advances and
Deposits and
Deferred Revenue
|
1,526,051
|
|
1,354,629
|
206,757
|
Accrued Expenses and
Other Liabilities
|
2,507,917
|
|
2,392,147
|
365,113
|
Financing Lease
Liabilities
|
1,581
|
|
1,462
|
223
|
Operating Lease
Liabilities
|
1,032,461
|
|
1,099,371
|
167,797
|
Amounts Due to
Related Parties
|
35,623
|
|
12,865
|
1,964
|
Liabilities held for
sale
|
193,432
|
|
176,298
|
26,908
|
Total Current
Liabilities
|
12,634,249
|
|
12,139,433
|
1,852,840
|
Summary of
Unaudited Condensed Consolidated Balance Sheets (Cont'd)
(In Thousands)
|
|
|
As of December 31,
2020
|
|
As of March 31,
2021
|
|
RMB
|
|
RMB
|
US$
|
Non-current
Liabilities
|
|
|
|
|
Convertible senior
notes held by
related parties
|
1,617,846
|
|
1,631,167
|
248,965
|
Securitization
Debt
|
-
|
|
10,085
|
1,539
|
Secured
Borrowings
|
-
|
|
110,179
|
16,817
|
Convertible Senior
Notes held by third
parties
|
642,121
|
|
648,241
|
98,941
|
Operating Lease
Liabilities
|
2,995,173
|
|
2,845,499
|
434,308
|
Financing Lease
Liabilities
|
2,698
|
|
2,396
|
366
|
Other Non–current
Liabilities
|
175,584
|
|
151,540
|
23,130
|
Long-term Bank
Loans
|
78,548
|
|
78,587
|
11,995
|
Total Non–current
Liabilities
|
5,511,970
|
|
5,477,694
|
836,061
|
Total
Liabilities
|
18,146,219
|
|
17,617,127
|
2,688,901
|
Shareholders'
Equity
|
|
|
|
|
Ordinary
Shares
|
25,988
|
|
25,988
|
3,967
|
Treasury
Shares
|
(211,352)
|
|
(152,377)
|
(23,257)
|
Additional Paid–In
Capital
|
19,487,232
|
|
19,458,353
|
2,969,925
|
Statutory
reserves
|
8,038
|
|
8,334
|
1,272
|
Accumulated
Deficit
|
(17,710,964)
|
|
(18,324,155)
([11])
|
(2,796,812)
|
Accumulated Other
Comprehensive Income
|
151,677
|
|
142,225
|
21,708
|
BEST Inc.
Shareholders' Equity
|
1,750,619
|
|
1,158,368
|
176,803
|
Non-controlling
Interests
|
(26,015)
|
|
(31,425)
|
(4,796)
|
Total
Shareholders' Equity
|
1,724,604
|
|
1,126,943
|
172,007
|
Total Liabilities
and
Shareholders' Equity
|
19,870,823
|
|
18,744,070
|
2,860,908
|
([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
RMB8,830,348
|
Summary of
Unaudited Condensed Consolidated Statements of Cash Flows
(In Thousands)
|
|
|
Three Months Ended
March 31,
|
|
2020
|
2021
|
|
RMB
|
RMB
|
US$
|
Net cash used in
continuing
operating
activities
|
(1,230,925)
|
(563,648)
|
(86,029)
|
Net cash used in
discontinued
operating
activities
|
(62,588)
|
(94,303)
|
(14,393)
|
Net cash used in
operating activities
|
(1,293,513)
|
(657,951)
|
(100,422)
|
Net cash generated
from continuing
investing activities
|
114,157
|
22,829
|
3,484
|
Net cash used in
discontinued Investing
activities
|
(240)
|
(33)
|
(5)
|
Net cash generated
from investing
activities
|
113,917
|
22,796
|
3,479
|
Net cash generated
from continuing
financing activities
|
754,985
|
193,947
|
29,602
|
Net cash used in
discontinued
financing activities
|
(150,000)
|
(92,500)
|
(14,118)
|
Net cash generated
from financing
activities
|
604,985
|
101,447
|
15,484
|
Exchange Rate Effect
on Cash, Cash
Equivalents, and Restricted Cash
|
24,166
|
6,716
|
1,025
|
Net Decrease in
Cash and Cash
Equivalents, and Restricted Cash
|
(550,445)
|
(526,992)
|
(80,434)
|
Cash and Cash
Equivalents, and Restricted
Cash at Beginning of Period
|
3,957,215
|
4,209,121
|
642,437
|
Cash and Cash
Equivalents, and Restricted
Cash at End of Period
|
3,406,770
|
3,682,129
|
562,003
|
Less: Cash and Cash
Equivalents, and
Restricted Cash held for sales at end of the
Period
|
3,413
|
1,955
|
298
|
Cash and Cash
Equivalents, and Restricted
Cash from continuing operations at End
of Period
|
3,403,357
|
3,680,174
|
561,705
|
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE
GAAP MEASURES
The table below sets forth a reconciliation of the Company's net
loss to EBITDA, adjusted EBITDA and adjusted EBITDA margin for the
periods indicated:
Table 7 –
Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA
Margin
|
|
|
|
|
Three Months Ended
March 31, 2021
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated([12])
|
Total
|
|
Net
Loss
|
(420,942)
|
(46,808)
|
(11,965)
|
(58,244)
|
(5,525)
|
(60,985)
|
(604,469)
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation
&
Amortization
|
107,637
|
18,257
|
10,227
|
4,174
|
3,683
|
6,767
|
150,745
|
|
Interest
Expense
|
-
|
-
|
-
|
-
|
-
|
46,007
|
46,007
|
|
Income Tax
Expense
|
-
|
-
|
9
|
-
|
4,281
|
-
|
4,290
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Interest
Income
|
-
|
-
|
-
|
-
|
-
|
(16,878)
|
(16,878)
|
|
EBITDA
|
(313,305)
|
(28,551)
|
(1,729)
|
(54,070)
|
2,439
|
(25,089)
|
(420,305)
|
|
Add:
|
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
1,907
|
2,664
|
1,896
|
2,150
|
644
|
19,704
|
28,965
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Gain from
appreciation of
investments
|
-
|
-
|
-
|
-
|
-
|
(5,562)
|
(5,562)
|
|
Adjusted
EBITDA
|
(311,398)
|
(25,887)
|
167
|
(51,920)
|
3,083
|
(10,947)
|
(396,902)
|
|
Adjusted
EBITDA
Margin
|
(8.4%)
|
(2.2%)
|
0.0%
|
(20.7%)
|
0.3%
|
-
|
(6.1%)
|
|
|
Three Months
Ended March 31, 2020
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated([13])
|
Total
|
|
Net
Loss
|
(272,316)
|
(203,042)
|
(48,350)
|
(69,940)
|
(20,358)
|
(52,867)
|
(666,873)
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation &
Amortization
|
77,217
|
15,030
|
10,970
|
3,731
|
618
|
6,973
|
114,539
|
|
Interest
Expense
|
-
|
-
|
-
|
-
|
-
|
33,172
|
33,172
|
|
Income Tax
Expense/(Benefit)
|
484
|
-
|
138
|
(276)
|
4,189
|
-
|
4,535
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Interest
Income
|
-
|
-
|
-
|
-
|
-
|
(21,585)
|
(21,585)
|
|
EBITDA
|
(194,615)
|
(188,012)
|
(37,242)
|
(66,485)
|
(15,551)
|
(34,307)
|
(536,212)
|
|
Add:
|
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
4,371
|
3,327
|
3,394
|
2,086
|
1,002
|
19,419
|
33,599
|
|
Adjusted
EBITDA
|
(190,244)
|
(184,685)
|
(33,848)
|
(64,399)
|
(14,549)
|
(14,888)
|
(502,613)
|
|
Adjusted
EBITDA
Margin
|
(5.6%)
|
(26.9%)
|
(8.3%)
|
(55.6%)
|
(3.5%)
|
-
|
(10.0%)
|
|
([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 to non-GAAP net loss, non-GAAP net loss margin for the periods
indicated:
Table 8 –
Reconciliation of Non-GAAP Net Loss and Non-GAAP Net Loss
Margin
|
|
|
|
|
Three Months Ended
March 31, 2021
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated([14])
|
Total
|
|
Net
Loss
|
(420,942)
|
(46,808)
|
(11,965)
|
(58,244)
|
(5,525)
|
(60,985)
|
(604,469)
|
|
Add:
|
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
1,907
|
2,664
|
1,896
|
2,150
|
644
|
19,704
|
28,965
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Gain from
appreciation of
investments
|
-
|
-
|
-
|
-
|
-
|
(5,562)
|
(5,562)
|
|
Non-GAAP Net
Loss
|
(419,035)
|
(44,144)
|
(10,069)
|
(56,094)
|
(4,881)
|
(46,843)
|
(581,066)
|
|
Non-GAAP Net
Loss
Margin
|
(11.3%)
|
(3.8%)
|
(2.2%)
|
(22.4%)
|
(0.5%)
|
-
|
(8.9%)
|
|
|
Three Months Ended
March 31, 2020
|
|
(In
RMB'000)
|
Express
|
Freight
|
Supply
Chain
|
Global
|
Others
|
Unallocated([15])
|
Total
|
|
Net
Loss
|
(272,316)
|
(203,042)
|
(48,350)
|
(69,940)
|
(20,358)
|
(52,867)
|
(666,873)
|
|
Add:
|
|
|
|
|
|
|
|
|
Share-based
Compensation
Expenses
|
4,371
|
3,327
|
3,394
|
2,086
|
1,002
|
19,419
|
33,599
|
|
Amortization of
Intangible Assets
Resulting from
Business
|
-
|
-
|
-
|
926
|
-
|
-
|
926
|
|
Non-GAAP Net
Loss
|
(267,945)
|
(199,715)
|
(44,956)
|
(66,928)
|
(19,356)
|
(33,448)
|
(632,348)
|
|
Non-GAAP Net
Loss
Margin
|
(7.9%)
|
(29.1%)
|
(11.0%)
|
(57.8%)
|
(4.6%)
|
-
|
(12.6%)
|
|
([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
March 31, 2021
|
(In
'000)
|
RMB
|
US$
|
Net Loss Attributable
to Ordinary Shareholders
|
(599,059)
|
(91,435)
|
Add:
|
|
|
Share-based
Compensation Expenses
|
28,965
|
4,422
|
Subtract:
|
|
|
Gain from appreciation
of investments
|
(5,562)
|
(849)
|
Non-GAAP Net Loss
Attributable to Ordinary
Shareholders for Computing Non-GAAP Diluted
EPS
|
(575,656)
|
(87,862)
|
Weighted Average
Diluted Shares Outstanding
During the Period
|
|
|
Diluted
|
386,809,534
|
386,809,534
|
Diluted
(Non-GAAP)
|
386,809,534
|
386,809,534
|
Diluted
EPS
|
(1.55)
|
(0.24)
|
Add:
|
|
|
Non-GAAP adjustment to
net loss per share
|
0.06
|
0.01
|
Non-GAAP Diluted
EPS
|
(1.49)
|
(0.23)
|
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SOURCE BEST Inc.