Net revenues increased by 63.6% year-over-year to
Net income increased by 117.6% year-over-year to
Non-GAAP net income increased by 113.7% year-over-year to
Second Quarter 2019 Financial and Operating Highlights
- Net revenues reached
RMB1.16 billion (US$169.0 million ), an increase of 63.6% from the second quarter of 2018. - Gross margin was 26.6%, compared to 27.0% for the second quarter of 2018.
- Net income was
RMB88.9 million (US$13.0 million ), an increase of 117.6% from the second quarter of 2018. Net income margin was 7.7%, compared to 5.8% for the second quarter of 2018. - Non-GAAP net income1 was
RMB99.3 million (US$14.5 million ), an increase of 113.7% from the second quarter of 2018. Non-GAAP net income margin1 was 8.6%, compared to 6.5% for the second quarter of 2018. - Number of household users reached more than 2.3 million, compared to approximately 2.0 million as of the end of the first quarter of 2019 and approximately 1.2 million as of the end of the second quarter of 2018.
- Percentage of household users with at least two connected products reached 16.1%, compared to 15.2% as of the end of the first quarter of 2019 and 12.5% as of the end of the second quarter of 2018.
- Number of
Viomi offline experience stores reached approximately 1,900, compared to approximately 1,600 as of the end of the first quarter of 2019 and approximately 700 as of the end of the second quarter of 2018.
_________________
1 “Non-GAAP net income” is defined as net income excluding share-based compensation expenses. “Non-GAAP net income margin” equals non-GAAP net income divided by total revenues. See “Reconciliation of GAAP and Non-GAAP Results” at the end of this press release.
“Following the solid growth momentum in the first quarter, and despite increasing macro uncertainties, we again delivered strong and healthy revenue and profitability growth in the second quarter of 2019,” said Mr.
“As part of our core strategy for this year, we have continued to introduce additional product lines and SKUs over the past several months to enhance and complement our diversified IoT @ Home product portfolio. For example, in
“We will continue our emphasis on product innovation and development, and have numerous new and exciting products in the pipeline for the second half of 2019. Our 21Face series of smart large-screen refrigerators remains a key strategic focus and growth driver, with user experience and functionalities being constantly upgraded and enhanced, in addition to complementary SKUs being introduced to the market. Further, we have stepped up our investment and preparation in anticipation of the upcoming 5G era, which we expect to trigger another growth cycle for the home appliances industry in China,” concluded Mr. Chen.
“Product sales, in particular sales of our
“With regard to our channel expansion, we continue to see strong interest from franchisees in the Viomi brand. The number of
Second Quarter 2019 Financial Results
Net revenues increased by 63.6% to
IoT-enabled smart home products. Revenues from IoT-enabled smart home products increased by 55.7% to
- Smart water purification systems. Revenues from smart water purification systems increased by 21.2% to
RMB344.8 million (US$50.2 million ) fromRMB284.5 million for the second quarter of 2018. The growth was primarily driven by the introduction of new series of smart water purifier products, together with overall increases in sales volumes.
- Smart kitchen products. Revenues from smart kitchen products increased by 61.5% to
RMB351.3 million (US$51.2 million ) fromRMB217.5 million for the second quarter of 2018. The rapid growth was primarily driven by significant increases in sales volumes of the Company’sViomi -branded refrigerator products.
- Other smart products. Revenues from other smart products increased by 163.2% to
RMB209.9 million (US$30.6 million ) fromRMB79.8 million for the second quarter of 2018. The rapid growth was primarily driven by significant increases in sales volumes of the Company’sViomi -branded washing machine and water heater products.
Consumable products. Revenues from consumable products increased by 38.3% to
Value-added businesses. Revenues from value-added businesses increased by 138.7% to
Cost of revenues increased by 64.6% to
Gross profit increased by 60.8% to
Total operating expenses increased by 45.7% to
Research and development expenses increased by 112.3% to
Selling and marketing expenses increased by 21.3% to
General and administrative expenses were
Income from operations was
Income before income tax expenses was
Income tax expenses were
Net income was
Non-GAAP net income 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
Shares Outstanding
As of
Outlook
For the third quarter of 2019, the Company currently expects:
- Net revenues to be between
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
| US (Toll Free): | +1-888-346-8982 |
| International: | +1-412-902-4272 |
| Mainland China (Toll Free): | 400-120-1203 |
| Hong Kong (Toll Free): | 800-905-945 |
| Hong Kong: | +852-3018-4992 |
| Conference ID: | 10134207 |
A telephone replay will be available one hour after the call until
| US (Toll Free): | +1-877-344-7529 |
| International: | +1-412-317-0088 |
| Replay Passcode: | 10134207 |
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.
Viomi has developed a unique IoT @ Home platform consisting of an ecosystem of innovative IoT-enabled smart home products, together with a suite of complementary consumable products and value-added businesses. This platform provides an attractive entry point into the consumer home, enabling consumers to intelligently interact with a broad portfolio of IoT products in an intuitive and human-like manner to make daily life more convenient, efficient and enjoyable, while allowing Viomi to grow its household user base and capture various additional scenario-driven consumption events in the home environment.
For more information, please visit: http://ir.viomi.com.
Use of Non-GAAP Measures
The Company uses non-GAAP operating income, non-GAAP net income, non-GAAP net income attributable to the Company, non-GAAP net income attributable to ordinary shareholders, non-GAAP basic and diluted net income per ordinary shares and non-GAAP basic and diluted net income per ADS, 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 is net income excluding share-based compensation expenses. Non-GAAP net income attributable to the Company is net income attributable to the Company 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 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,” “confident” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Viomi’s strategic and operational plans, contain forward-looking statements.
For investor and media inquiries, please contact:
In
E-mail: ir@viomi.com.cn
Tel: +86-10-6508-0677
E-mail: viomi@tpg-ir.com
In
The Piacente Group, Inc.
Tel: +1-212-481-2050
E-mail: viomi@tpg-ir.com
VIOMI TECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except shares, ADS, per share and per ADS data)
| As of December 31, | As of June 30, | ||||||
| 2018 | 2019 | 2019 | |||||
| RMB | RMB | US$ | |||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | 940,298 | 667,972 | 97,301 | ||||
| Restricted cash | 29,550 | 22,881 | 3,333 | ||||
| Short-term deposits | - | 109,673 | 15,976 | ||||
| Short-term investments | 168,993 | 192,654 | 28,063 | ||||
| Accounts and notes receivable from third parties (net of allowance of nil and nil as of December 31, 2018 and June 30, 2019, respectively) | 111,718 | 325,231 | 47,375 | ||||
| Accounts receivable from a related party (net of allowance of nil and nil as of December 31, 2018 and June 30, 2019, respectively) | 260,984 | 337,403 | 49,148 | ||||
| Other receivables from a related party (net of allowance of nil and nil as of December 31, 2018 and June 30, 2019, respectively) | 112,320 | 106,312 | 15,486 | ||||
| Inventories | 231,975 | 420,642 | 61,275 | ||||
| Prepaid expenses and other assets | 46,890 | 37,826 | 5,510 | ||||
| Total current assets | 1,902,728 | 2,220,594 | 323,467 | ||||
| Non-current assets | |||||||
| Prepaid expenses and other assets | 3,636 | 26,598 | 3,874 | ||||
| Property, plant and equipment, net | 11,301 | 26,956 | 3,927 | ||||
| Deferred tax assets | 5,234 | 9,042 | 1,317 | ||||
| Intangible assets, net | 169 | 2,623 | 382 | ||||
| Right-of-use assets, net3 | - | 20,627 | 3,005 | ||||
| Total non-current assets | 20,340 | 85,846 | 12,505 | ||||
| Total assets | 1,923,068 | 2,306,440 | 335,972 | ||||
| Liabilities and shareholders’ equity | |||||||
| Current liabilities | |||||||
| Accounts and notes payable | 548,481 | 692,253 | 100,838 | ||||
| Advances from customers | 86,312 | 59,558 | 8,676 | ||||
| Amount due to related parties | 5,763 | 1,594 | 232 | ||||
| Accrued expenses and other liabilities | 200,930 | 236,514 | 34,452 | ||||
| Short-term borrowing | - | 95,868 | 13,965 | ||||
| Income tax payables | 10,199 | 19,256 | 2,805 | ||||
| Lease liabilities due within one year3 | - | 7,157 | 1,043 | ||||
| Total current liabilities | 851,685 | 1,112,200 | 162,011 | ||||
| Non-current liabilities | |||||||
| Accrued expenses and other liabilities | 518 | 435 | 63 | ||||
| Lease liabilities3 | - | 13,814 | 2,012 | ||||
| Total non-current liabilities | 518 | 14,249 | 2,075 | ||||
| Total liabilities | 852,203 | 1,126,449 | 164,086 | ||||
___________________________
3 The Company has adopted ASU No. 2016-02 ‘‘Leases” beginning
VIOMI TECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(All amounts in thousands, except shares, ADS, per share and per ADS data)
| As of December 31, | As of June 30, | ||||||||
| 2018 | 2019 | 2019 | |||||||
| RMB | RMB | US$ | |||||||
| Shareholders’ equity | |||||||||
| Class A Ordinary Shares (US$0.00001 par value; 4,800,000,000 shares authorized; 90,200,000 shares issued and outstanding as of December 31, 2018 and June 30, 2019, respectively) | 5 | 5 | 1 | ||||||
| Class B Ordinary Shares (US$0.00001 par value; 150,000,000 shares authorized; 117,600,000 shares issued and outstanding as of December 31, 2018 and June 30, 2019, respectively) | 7 | 7 | 1 | ||||||
| Additional paid-in capital | 1,193,174 | 1,168,703 | 170,241 | ||||||
| (Accumulated deficit) retained earnings | (95,527 | ) | 34,044 | 4,959 | |||||
| Accumulated other comprehensive loss | (29,786 | ) | (29,454 | ) | (4,290 | ) | |||
| Total Viomi Technology Co., Ltd (the “Company”)’s shareholders’ equity | 1,067,873 | 1,173,305 | 170,912 | ||||||
| Non-controlling interests | 2,992 | 6,686 | 974 | ||||||
| Total shareholders’ equity | 1,070,865 | 1,179,991 | 171,886 | ||||||
| Total liabilities and shareholders’ equity | 1,923,068 | 2,306,440 | 335,972 | ||||||
VIOMI TECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(All amounts in thousands, except shares, ADS, per share and per ADS data)
| Three Months Ended | |||||||
| June 30, 2018 | June 30, 2019 | June 30, 2019 | |||||
| RMB | RMB | US$ | |||||
| Net revenues: | |||||||
| A related party | 419,743 | 487,736 | 71,047 | ||||
| Third parties | 289,587 | 672,417 | 97,949 | ||||
| Total net revenues | 709,330 | 1,160,153 | 168,996 | ||||
| Cost of revenues： | |||||||
| Purchase from a related party | (4,105 | ) | (5,025 | ) | (732 | ) | |
| Purchase from third parties | (513,496 | ) | (846,851 | ) | (123,358 | ) | |
| Total cost of revenues | (517,601 | ) | (851,876 | ) | (124,090 | ) | |
| Gross profit | 191,729 | 308,277 | 44,906 | ||||
| Operating expenses(1) | |||||||
| Research and development expenses | (28,062 | ) | (59,573 | ) | (8,678 | ) | |
| Selling and marketing expenses (including RMB2,165 and RMB22,434 with related parties for the three months ended June 30, 2018 and 2019, respectively) | (106,736 | ) | (129,498 | ) | (18,864 | ) | |
| General and administrative expenses | (10,185 | ) | (22,219 | ) | (3,237 | ) | |
| Total operating expenses | (144,983 | ) | (211,290 | ) | (30,779 | ) | |
| Other (expenses) income | (8 | ) | 1,877 | 273 | |||
| Income from operations | 46,738 | 98,864 | 14,400 | ||||
| Interest income and investment income | 1,169 | 4,002 | 583 | ||||
| Other non-operating income | - | 435 | 63 | ||||
| Income before income tax expenses | 47,907 | 103,301 | 15,046 | ||||
| Income tax expenses | (7,040 | ) | (14,364 | ) | (2,092 | ) | |
| Net income | 40,867 | 88,937 | 12,954 | ||||
| Less: Net income attributable to the non-controlling interest shareholders | - | 556 | 81 | ||||
| Net income attributable to the Company | 40,867 | 88,381 | 12,873 | ||||
| Accretion of Series A Preferred Shares | (2,189 | ) | - | - | |||
| Cumulative dividend on Series A Preferred Shares | (2,552 | ) | - | - | |||
| Cumulative dividend on Class B Ordinary Shares | (207 | ) | - | - | |||
| Undistributed earnings allocated to Series A Preferred Shares | (3,851 | ) | - | - | |||
| Undistributed earnings allocated to Class B Ordinary Shares | (28,651 | ) | - | - | |||
| Undistributed earnings allocated to unvested Class A ordinary shares | (1,680 | ) | - | - | |||
| Net income attributable to ordinary shareholders of the Company | 1,737 | 88,381 | 12,873 | ||||
VIOMI TECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (CONTINUED)
(All amounts in thousands, except shares, ADS, per share and per ADS data)
| Three Months Ended | |||||
| June 30, 2018 | June 30, 2019 | June 30, 2019 | |||
| RMB | RMB | US$ | |||
| Net income attributable to the Company | 40,867 | 88,381 | 12,873 | ||
| Other comprehensive (loss) income, net of tax | |||||
| Foreign currency translation adjustment | (14,588 | ) | 14,415 | 2,100 | |
| Total comprehensive income attributable to the Company | 26,279 | 102,796 | 14,973 | ||
| Net income per ADS* | |||||
| -Basic | 0.21 | 1.28 | 0.19 | ||
| -Diluted | 0.18 | 1.23 | 0.18 | ||
| Weighted average number of ADS used in calculating net income per ADS | |||||
| -Basic | 8,159,940 | 69,266,667 | 69,266,667 | ||
| -Diluted | 10,524,811 | 72,060,847 | 72,060,847 | ||
| Net income per share attributable to ordinary shareholders of the Company | |||||
| -Basic | 0.07 | 0.43 | 0.06 | ||
| -Diluted | 0.06 | 0.41 | 0.06 | ||
| Weighted average number of ordinary shares used in calculating net income per share | |||||
| -Basic | 24,479,819 | 207,800,000 | 207,800,000 | ||
| -Diluted | 31,574,434 | 216,182,540 | 216,182,540 | ||
| *Each ADS represents 3 ordinary shares. | |||||
| (1) Share-based compensation was allocated in operating expenses as follows: | |||||
| Three Months Ended | ||||
| June 30, 2018 | June 30, 2019 | June 30, 2019 | ||
| RMB | RMB | US$ | ||
| General and administrative expenses | 492 | 1,764 | 257 | |
| Research and development expenses | 3,162 | 5,431 | 791 | |
| Selling and marketing expenses | 1,937 | 3,136 | 457 | |
VIOMI TECHNOLOGY CO., LTD
Reconciliations of GAAP And Non-GAAP Results
(All amounts in thousands, except shares, ADS, per share and per ADS data)
| Three Months Ended | ||||
| June 30, 2018 | June 30, 2019 | June 30, 2019 | ||
| RMB | RMB | US$ | ||
| Income from operations | 46,738 | 98,864 | 14,400 | |
| Share-based compensation expenses | 5,591 | 10,331 | 1,505 | |
| Non-GAAP operating income | 52,329 | 109,195 | 15,905 | |
| Net income | 40,867 | 88,937 | 12,954 | |
| Share-based compensation expenses | 5,591 | 10,331 | 1,505 | |
| Non-GAAP net income | 46,458 | 99,268 | 14,459 | |
| Net income attributable to the Company | 40,867 | 88,381 | 12,873 | |
| Share-based compensation expenses | 5,591 | 10,331 | 1,505 | |
| Non-GAAP net income attributable to the Company | 46,458 | 98,712 | 14,378 | |
| Net income attributable to ordinary shareholders | 1,737 | 88,381 | 12,873 | |
| Share-based compensation expenses | 5,591 | 10,331 | 1,505 | |
| Non-GAAP net income attributable to ordinary shareholders | 7,328 | 98,712 | 14,378 | |
| Non-GAAP net income per ADS | ||||
| -Basic | 0.90 | 1.43 | 0.21 | |
| -Diluted | 0.70 | 1.37 | 0.20 | |
| Weighted average number of ADS used in calculating Non-GAAP net income per ADS | ||||
| -Basic | 8,159,940 | 69,266,667 | 69,266,667 | |
| -Diluted | 10,524,811 | 72,060,847 | 72,060,847 | |
| Non-GAAP net income per ordinary share | ||||
| -Basic | 0.30 | 0.48 | 0.07 | |
| -Diluted | 0.23 | 0.46 | 0.07 | |
| Weighted average number of ordinary shares used in calculating Non-GAAP net income per share | ||||
| -Basic | 24,479,819 | 207,800,000 | 207,800,000 | |
| -Diluted | 31,574,434 | 216,182,540 | 216,182,540 | |
Note: The non-GAAP adjustments do not have any tax impact as share-based compensation expenses are non-deductible for income tax purpose.
Source: Viomi Technology Co., Ltd