Third Quarter 2020 Financial and Operating Highlights
- Net revenues reached
RMB1,486.7 million (US$219.0 million ), an increase of 39.0% from the third quarter of 2019. - Gross margin was 17.1%.
- Net income attributable to ordinary shareholders of the Company was
RMB34.9 million (US$5.1 million ). - Non-GAAP net income attributable to ordinary shareholders of the Company1 was
RMB57.4 million (US$8.4 million ). - Number of cumulative household users reached more than 4.6 million, compared to approximately 4.2 million as of the end of the second quarter of 2020 and approximately 2.6 million as of the end of the third quarter of 2019.
- Percentage of household users with at least two connected products reached 19.5%, compared to 19.0% as of the end of the second quarter of 2020 and 17.1% as of the end of the third quarter of 2019.
1 “Non-GAAP net income attributable to ordinary shareholders of the Company” is defined as net income attributable to ordinary shareholders of the Company excluding share-based compensation expenses. See “Reconciliation of GAAP and Non-GAAP Results” at the end of this press release.
“Under the backdrop of a meaningful industry recovery and rebound in consumer demand in the post-pandemic landscape, we continued our strong growth momentum in the third quarter, once again exceeding our previous guidance,” said Mr.
“Over the past two years, as part of our 5G IoT strategy, we have been developing a 5G IoT technology, protocol and algorithm framework for the home environment, including sensor technology, AI algorithms and smart hardware. Our dynamic, next-generation 5G IoT-enabled products are expected to enable ever-increasing scenario-based content, consumption, entertainment and lifestyle applications in the home environment, which will create numerous monetization opportunities for us over time. We believe such transformational trends will form the foundation of the next phase of industry evolution and we look forward to being at the forefront of these developments.
“To this end, we continued to expand our value-added businesses and content applications. At our recent 5G IoT product launch event in October, we announced additional enhancements to our line of 21Face 5G IoT large-screen refrigerators, and further expanded related content partnerships. Following our previous cooperation with various entertainment and media platforms, including Kugou Music, online video platform iQIYI, audio sharing platform Ximalaya FM and recipe sharing app Douguo, we also recently reached a cooperation agreement with Douyin, China’s popular short video social media platform, to further enrich our large-screen content offerings and increase user stickiness. Going forward, we will continue to explore even more IoT content offerings and partnerships in relation to our large-screen products, such as community group purchasing and grocery delivery services, in order to cater to dynamic and ever-changing consumption and user behavioral trends.
“In addition, in light of greater consumer emphasis on cleanness in the post-pandemic era, we have ramped up efforts to capture opportunities in our
“In the past two years since our IPO, we have more than doubled our revenues, successfully expanded into numerous diverse product lines, significantly deepened our sales channel penetration, enriched our patent portfolio and established
“Our year-over-year net revenues growth of 39.0% again demonstrated the strength of our diversified business mix, as the overall industry began to recover from the impact of COVID-19. Gross margin also improved meaningfully on a quarter-over-quarter basis to 17.1%. Our core focus will remain on delivering robust top-line growth through new product launches, sales channel expansion and market share gains. In addition, we also expect to see meaningful gross margin uplift going forward as a result of more positive shifts in product mix, in line with our overall brand premiumization and SKU optimization strategy,” Mr.
Third Quarter 2020 Financial Results
REVENUE
Net revenues increased by 39.0% to
- IoT @ Home portfolio. Revenues from IoT @ Home portfolio increased by 72.5% to
RMB1,060.2 million (US$156.1 million ) fromRMB614.8 million for the third quarter of 2019. The growth was primarily driven by the continued successful rollout of certain new product categories, in particular sweeper robots and air conditioning systems.
- Home water solutions. Revenues from home water solutions decreased by 32.2% to
RMB145.4 million (US$21.4 million ) fromRMB214.5 million for the third quarter of 2019. The decline was primarily due to the decreases in average selling prices, particularly of Xiaomi-branded water purifier products. These effects were partially mitigated by the successful introduction of new series ofViomi -branded water purifier products.
- Consumables. Revenues from consumables increased by 32.6% to
RMB71.3 million (US$10.5 million ) fromRMB53.7 million for the third quarter of 2019, primarily due to increased demand for the Company’s water purifier filter products. - Small appliances and others. Revenues from small appliances and others increased by 12.6% to
RMB209.9 million (US$30.9 million ) fromRMB186.5 million for the third quarter of 2019.
GROSS PROFIT
Gross profit increased by 6.8% to
OPERATING EXPENSES
Total operating expenses increased by 33.8% to
Research and development expenses increased by 22.0% to
Selling and marketing expenses increased by 34.2% to
General and administrative expenses increased by 70.3% to
As a percentage of total net revenues, total operating expenses for the third quarter of 2020 decreased to 15.2% from 15.8% for the third quarter of 2019.
INCOME FROM OPERATIONS
Income from operations was
Non-GAAP operating income2, which excludes the impact of share-based compensation expenses, was
NET INCOME
Net income attributable to ordinary shareholders of the Company was
Non-GAAP net income attributable to ordinary shareholders of the Company was
2 “Non-GAAP operating income” is defined as income from operation excluding share-based compensation expenses. See “Reconciliation of GAAP and Non-GAAP Results” at the end of this press release.
BALANCE SHEET
As of
OUTLOOK
For the fourth quarter of 2020, the Company currently expects:
- Net revenues to be between
RMB1.90 billion andRMB2.00 billion , representing a year-over-year growth of approximately 9.1% to 14.8%.
For the full year of 2020, the Company currently expects:
- Net revenues to be between
RMB5.84 billion andRMB5.94 billion , representing a year-over-year growth of approximately 25.6% to 27.7%.
The above outlook is based on the current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.
Conference Call
The Company’s management will host a conference call at
+1-888-346-8982 | |
International: | +1-412-902-4272 |
Mainland | 400-120-1203 |
800-905-945 | |
+852-3018-4992 | |
Conference ID: | 10149971 |
A telephone replay will be available one hour after the call until
+1-877-344-7529 | |
International: | +1-412-317-0088 |
Replay Passcode: | 10149971 |
Additionally, a live and archived webcast of the conference call will be available at http://ir.viomi.com.
About
Viomi’s mission is to redefine the future home via the concept of IoT @ Home.
For more information, please visit: http://ir.viomi.com.
Use of Non-GAAP Measures
The Company uses non-GAAP operating income and non-GAAP net income attributable to ordinary shareholders, which are non-GAAP financial measures, in evaluating its operating results and for financial and operational decision-making purposes. Non-GAAP operating income is income from operations excluding share-based compensation expenses. Non-GAAP net income attributable to ordinary shareholders is net income attributable to ordinary shareholders excluding share-based compensation expenses. The non-GAAP adjustments do not have any tax impact as share-based compensation expenses are non-deductible for income tax purpose.
The Company believes that non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses, which are non-cash charges, and these measures provide useful information about the Company’s operating results, enhance the overall understanding of the Company’s 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.
Non-GAAP financial measures should not be considered in isolation or construed as alternative to income from operations, net income, or any other measure of performance or as an indicator of the Company’s operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data. We encourage investors and others to review its financial information in its entirety and not rely on a single financial measure.
Exchange Rate
The Company’s business is primarily conducted in
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the
For investor and media inquiries, please contact:
In
E-mail: ir@viomi.com.cn
Tel: +86-21-6039-8363
E-mail: viomi@tpg-ir.com
In
Tel: +1-212-481-2050
E-mail: viomi@tpg-ir.com
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except shares, ADS, per share and per ADS data)
As of | As of September 30, | ||||||
2019 | 2020 | 2020 | |||||
RMB | RMB | US$ | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | 972,438 | 715,565 | 105,391 | ||||
Restricted cash | 30,567 | 39,691 | 5,846 | ||||
Short-term deposits | 60,000 | - | - | ||||
Short-term investments | 316,201 | 179,643 | 26,459 | ||||
Accounts and notes receivable from third parties (net of allowance of | 316,189 | 583,090 | 85,880 | ||||
Accounts receivable from a related party (net of allowance of nil and | 707,947 | 489,145 | 72,043 | ||||
Other receivables from related parties (net of allowance of nil and | 23,944 | 51,997 | 7,658 | ||||
Inventories | 418,015 | 492,698 | 72,567 | ||||
Prepaid expenses and other current assets | 62,314 | 142,548 | 20,995 | ||||
Total current assets | 2,907,615 | 2,694,377 | 396,839 | ||||
Non-current assets | |||||||
Prepaid expenses and other non-current assets | 11,170 | 21,383 | 3,149 | ||||
Property, plant and equipment, net | 67,293 | 61,341 | 9,035 | ||||
Deferred tax assets | 12,276 | 13,849 | 2,040 | ||||
Intangible assets, net | 4,357 | 7,487 | 1,103 | ||||
Right-of-use assets, net | 19,762 | 23,518 | 3,464 | ||||
Land use rights, net | - | 60,834 | 8,960 | ||||
Long-term deposits | - | 60,000 | 8,837 | ||||
Total non-current assets | 114,858 | 248,412 | 36,588 | ||||
Total assets | 3,022,473 | 2,942,789 | 433,427 | ||||
Liabilities and shareholders’ equity | |||||||
Current liabilities | |||||||
Accounts and notes payable | 1,043,159 | 1,010,786 | 148,873 | ||||
Advances from customers | 103,150 | 73,661 | 10,849 | ||||
Amount due to related parties | 25,106 | 69,060 | 10,171 | ||||
Accrued expenses and other liabilities | 325,042 | 269,782 | 39,735 | ||||
Short-term borrowing | 95,868 | - | - | ||||
Income tax payables | 33,522 | 29,291 | 4,314 | ||||
Lease liabilities due within one year | 6,993 | 9,879 | 1,455 | ||||
Total current liabilities | 1,632,840 | 1,462,459 | 215,397 | ||||
Non-current liabilities | |||||||
Accrued expenses and other liabilities | 1,795 | 3,021 | 445 | ||||
Lease liabilities | 13,391 | 14,557 | 2,144 | ||||
Total non-current liabilities | 15,186 | 17,578 | 2,589 | ||||
Total liabilities | 1,648,026 | 1,480,037 | 217,986 |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(All amounts in thousands, except shares, ADS, per share and per ADS data)
As of | As of September 30, | ||||||||
2019 | 2020 | 2020 | |||||||
RMB | RMB | US$ | |||||||
Shareholders’ equity | |||||||||
Class A Ordinary Shares ( | 6 | 6 | 1 | ||||||
Class B Ordinary Shares ( | 6 | 6 | 1 | ||||||
- | (32,687 | ) | (4,814 | ) | |||||
Additional paid-in capital | 1,192,332 | 1,271,350 | 187,250 | ||||||
Retained earnings | 195,596 | 255,099 | 37,572 | ||||||
Accumulated other comprehensive loss | (19,145 | ) | (33,626 | ) | (4,953 | ) | |||
Total equity attributable to shareholders of the Company | 1,368,795 | 1,460,148 | 215,057 | ||||||
Non-controlling interests | 5,652 | 2,604 | 384 | ||||||
Total shareholders’ equity | 1,374,447 | 1,462,752 | 215,441 | ||||||
Total liabilities and shareholders’ equity | 3,022,473 | 2,942,789 | 433,427 |
Note: On
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(All amounts in thousands, except shares, ADS, per share and per ADS data)
Three Months Ended | |||||||
RMB | RMB | US$ | |||||
Net revenues: | |||||||
A related party | 481,283 | 624,822 | 92,026 | ||||
Third parties | 588,218 | 861,922 | 126,947 | ||||
Total net revenues | 1,069,501 | 1,486,744 | 218,973 | ||||
Cost of revenues (including | (831,366 | ) | (1,232,481 | ) | (181,524 | ) | |
Gross profit | 238,135 | 254,263 | 37,449 | ||||
Operating expenses(1) | |||||||
Research and development expenses (including nil, and | (43,164 | ) | (52,674 | ) | (7,758 | ) | |
Selling and marketing expenses (including | (113,446 | ) | (152,247 | ) | (22,424 | ) | |
General and administrative expenses | (12,590 | ) | (21,447 | ) | (3,159 | ) | |
Total operating expenses | (169,200 | ) | (226,368 | ) | (33,341 | ) | |
Other income | 13,584 | 8,537 | 1,257 | ||||
Income from operations | 82,519 | 36,432 | 5,365 | ||||
Interest income and investment income | 2,818 | 9,985 | 1,471 | ||||
Other non-operating income | 446 | 580 | 85 | ||||
Income before income tax expenses | 85,783 | 46,997 | 6,921 | ||||
Income tax expenses | (12,456 | ) | (11,890 | ) | (1,751 | ) | |
Net income | 73,327 | 35,107 | 5,170 | ||||
Less: Net income attributable to the non-controlling interest shareholders | 426 | 187 | 28 | ||||
Net income attributable to ordinary shareholders of the Company | 72,901 | 34,920 | 5,142 | ||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (CONTINUED)
(All amounts in thousands, except shares, ADS, per share and per ADS data)
Three Months Ended | |||||||
RMB | RMB | US$ | |||||
Net income attributable to the Company | 72,901 | 34,920 | 5,142 | ||||
Other comprehensive (loss)/income, net of tax | |||||||
Foreign currency translation adjustment | 20,255 | (24,956 | ) | (3,676 | ) | ||
Total comprehensive income attributable to the Company | 93,156 | 9,964 | 1,466 | ||||
Net income per ADS* | |||||||
-Basic | 1.05 | 0.50 | 0.07 | ||||
-Diluted | 1.01 | 0.48 | 0.07 | ||||
Weighted average number of ADS used in calculating net income per ADS | |||||||
-Basic | 69,351,625 | 69,719,922 | 69,719,922 | ||||
-Diluted | 71,932,384 | 72,589,361 | 72,589,361 | ||||
Net income per share attributable to ordinary shareholders of the Company | |||||||
-Basic | 0.35 | 0.17 | 0.03 | ||||
-Diluted | 0.34 | 0.16 | 0.02 | ||||
Weighted average number of ordinary shares used in calculating net income per share | |||||||
-Basic | 208,054,876 | 209,159,767 | 209,159,767 | ||||
-Diluted | 215,797,153 | 217,768,082 | 217,768,082 |
*Each ADS represents 3 ordinary shares. |
(1) Share-based compensation was allocated in operating expenses as follows: |
Three Months Ended | |||||||
RMB | RMB | US$ | |||||
General and administrative expenses | 1,818 | 6,270 | 923 | ||||
Research and development expenses | 5,609 | 12,963 | 1,909 | ||||
Selling and marketing expenses | 3,106 | 3,211 | 473 |
Reconciliations of GAAP And Non-GAAP Results
(All amounts in thousands, except shares, ADS, per share and per ADS data)
Three Months Ended | |||||||
RMB | RMB | US$ | |||||
Income from operations | 82,519 | 36,432 | 5,365 | ||||
Share-based compensation expenses | 10,533 | 22,444 | 3,305 | ||||
Non-GAAP operating income | 93,052 | 58,876 | 8,670 | ||||
Net income | 73,327 | 35,107 | 5,170 | ||||
Share-based compensation expenses | 10,533 | 22,444 | 3,305 | ||||
Non-GAAP net income | 83,860 | 57,551 | 8,475 | ||||
Net income attributable to the Company | 72,901 | 34,920 | 5,142 | ||||
Share-based compensation expenses | 10,533 | 22,444 | 3,305 | ||||
Non-GAAP net income attributable to the Company | 83,434 | 57,364 | 8,447 | ||||
Net income attributable to ordinary shareholders | 72,901 | 34,920 | 5,142 | ||||
Share-based compensation expenses | 10,533 | 22,444 | 3,305 |
Non-GAAP net income attributable to ordinary shareholders | 83,434 | 57,364 | 8,447 | ||||
Non-GAAP net income per ADS | |||||||
-Basic | 1.20 | 0.82 | 0.12 | ||||
-Diluted | 1.16 | 0.79 | 0.12 | ||||
Weighted average number of ADS used in calculating Non-GAAP net income per ADS | |||||||
-Basic | 69,351,625 | 69,719,922 | 69,719,922 | ||||
-Diluted | 71,932,384 | 72,589,361 | 72,589,361 | ||||
Non-GAAP net income per ordinary share | |||||||
-Basic | 0.40 | 0.27 | 0.04 | ||||
-Diluted | 0.39 | 0.26 | 0.04 | ||||
Weighted average number of ordinary shares used in calculating Non-GAAP net income per share | |||||||
-Basic | 208,054,876 | 209,159,767 | 209,159,767 | ||||
-Diluted | 215,797,153 | 217,768,082 | 217,768,082 |
Note: The non-GAAP adjustments do not have any tax impact as share-based compensation expenses are non-deductible for income tax purpose.
Source:
2020 GlobeNewswire, Inc., source