First Quarter 2019 Financial and Operating Highlights
- Net revenues reached
RMB676.2 million (US$100.8 million ), an increase of 104.4% from the first quarter of 2018. - Gross margin was 28.0%, compared to 29.6% for the first quarter of 2018.
- Net income was
RMB41.3 million (US$6.2 million ), an increase of 40.5% from the first quarter of 2018. - Non-GAAP net income1 was
RMB53.1 million (US$7.9 million ), an increase of 68.1% from the first quarter of 2018. - Number of household users reached more than 2.0 million, compared to approximately 1.7 million as of the end of 2018 and approximately 1.0 million as of the end of the first quarter of 2018.
- Percentage of household users with at least two connected products reached 15.2%, compared to 14.3% as of the end of 2018 and 12.1% as of the end of the first quarter of 2018.
- Number of
Viomi offline experience stores reached more than 1,600, compared to approximately 1,500 as of the end of 2018 and approximately 500 as of the end of the first quarter of 2018.
____________________________________________
1“Non-GAAP net income” is defined as net income excluding share-based compensation expenses. See “Reconciliation of GAAP and Non-GAAP Results” at the end of this press release.
“We began 2019 on a positive note, again delivering strong revenue and healthy profitability growth,” said Mr.
“We launched multiple new and exciting product lines over the past several months. For example, new series of
“Looking ahead in 2019, our priorities remain focused on delivering robust top-line growth, driven by the development and launch of new and innovative products, both
“Product sales, in particular sales of our
“With regard to channel expansion, the number of
First Quarter 2019 Financial Results
Net revenues increased by 104.4% to
IoT-enabled smart home products. Revenues from IoT-enabled smart home products increased by 103.8% to
- Smart water purification systems. Revenues from smart water purification systems decreased by 18.9% to
RMB120.0 million (US$17.9 million ) fromRMB148.0 million for the first quarter of 2018. The decline was primarily due to the anticipation of new series of smart water purifier products that were brought to market inApril 2019 , together with a minor delay in the launch of these products.
- Smart kitchen products. Revenues from smart kitchen products increased by 188.7% to
RMB196.6 million (US$29.3 million ) fromRMB68.1 million for the first 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 511.1% to
RMB185.9 million (US$27.7 million ) fromRMB30.4 million for the first 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 28.7% to
Value-added businesses. Revenues from value-added businesses increased by 167.5% to
Cost of revenues increased by 108.9% to
Gross profit increased by 93.6% to
Total operating expenses increased by 133.8% to
Research and development expenses increased by 74.3% to
Selling and marketing expenses increased by 153.3% to
General and administrative expenses was
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 (loss) from operation excluding share-based compensation expenses. See “Reconciliation of GAAP and Non-GAAP Results” at the end of this press release.
Balance Sheet and Cash Flow
As of
For the first quarter of 2019, net cash provided by operating activities was
Shares Outstanding
As of
Outlook
For the second quarter of 2019, the Company currently expects:
- Net revenues to be between
RMB1.15 billion and RMB1.20 billion , representing a year-over-year growth of approximately 62.1% to 69.2%.
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: | 10131487 |
A telephone replay will be available one hour after the call until on
US Toll Free: | +1-877-344-7529 |
International: | +1-412-317-0088 |
Replay Passcode: | 10131487 |
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 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- 21-6039-8363
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 March 31, | ||||||
2018 | 2019 | 2019 | |||||
RMB | RMB | US$ | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | 940,298 | 764,032 | 113,844 | ||||
Restricted cash | 29,550 | 31,001 | 4,620 | ||||
Short-term investments | 168,993 | 345,138 | 51,427 | ||||
Accounts and notes receivable from third parties (net of allowance of nil and nil as of December 31, 2018 and March 31, 2019, respectively) | 111,718 | 153,231 | 22,832 | ||||
Accounts receivable from a related party (net of allowance of nil and nil as of December 31, 2018 and March 31, 2019, respectively) | 260,984 | 159,180 | 23,719 | ||||
Other receivables from a related party (net of allowance of nil and nil as of December 31, 2018 and March 31, 2019, respectively) | 112,320 | 52,233 | 7,783 | ||||
Inventories | 231,975 | 298,705 | 44,508 | ||||
Prepaid expenses and other assets | 46,890 | 55,531 | 8,274 | ||||
Total current assets | 1,902,728 | 1,859,051 | 277,007 | ||||
Non-current assets | |||||||
Prepaid expenses and other assets | 3,636 | 3,505 | 522 | ||||
Property, plant and equipment, net | 11,301 | 16,398 | 2,443 | ||||
Deferred tax assets | 5,234 | 6,142 | 915 | ||||
Intangible assets, net | 169 | 2,414 | 360 | ||||
Right-of-use assets, net3 | - | 16,731 | 2,493 | ||||
Total non-current assets | 20,340 | 45,190 | 6,733 | ||||
Total assets | 1,923,068 | 1,904,241 | 283,740 | ||||
Liabilities and shareholders’ equity | |||||||
Current liabilities | |||||||
Accounts and notes payable | 548,481 | 521,416 | 77,693 | ||||
Advances from customers | 86,312 | 55,043 | 8,202 | ||||
Amount due to related parties | 5,763 | 2,458 | 366 | ||||
Accrued expenses and other liabilities | 200,930 | 232,707 | 34,674 | ||||
Income tax payables | 10,199 | 11,990 | 1,787 | ||||
Lease liabilities due within one year3 | - | 6,092 | 908 | ||||
Total current liabilities | 851,685 | 829,706 | 123,630 | ||||
Non-current liabilities | |||||||
Accrued expenses and other liabilities | 518 | 289 | 43 | ||||
Lease liabilities3 | - | 10,944 | 1,631 | ||||
Total non-current liabilities | 518 | 11,233 | 1,674 | ||||
Total liabilities | 852,203 | 840,939 | 125,304 | ||||
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 March 31, | ||||||||
2018 | 2019 | 2019 | |||||||
RMB | RMB | US$ | |||||||
Shareholders’ equity | |||||||||
Post-IPO 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 March 31, 2019, respectively) | 5 | 5 | 1 | ||||||
Post-IPO Class B Ordinary Shares (US$0.00001 par value; 150,000,000 shares authorized; 117,600,000 shares issued and outstanding as of December 31, 2018 and March 31, 2019, respectively) | 7 | 7 | 1 | ||||||
Additional paid-in capital | 1,193,174 | 1,158,366 | 172,602 | ||||||
Accumulated deficit | (95,527) | (54,337) | (8,096) | ||||||
Accumulated other comprehensive loss | (29,786) | (43,869) | (6,538) | ||||||
Total Viomi Technology Co., Ltd (the “Company”)’s shareholders’ equity | 1,067,873 | 1,060,172 | 157,970 | ||||||
Non-controlling interests | 2,992 | 3,130 | 466 | ||||||
Total shareholders’ equity | 1,070,865 | 1,063,302 | 158,436 | ||||||
Total liabilities and shareholders’ equity | 1,923,068 | 1,904,241 | 283,740 | ||||||
VIOMI TECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(All amounts in thousands, except shares, ADS, per share and per ADS data)
Three Months Ended | |||||||
March 31, 2018 | March 31, 2019 | March 31, 2019 | |||||
RMB | RMB | US$ | |||||
Net revenues: | |||||||
A related party | 231,795 | 251,880 | 37,531 | ||||
Third parties | 99,054 | 424,329 | 63,227 | ||||
Total net revenues | 330,849 | 676,209 | 100,758 | ||||
Cost of revenues: | |||||||
Purchase from a related party | (1,285) | (9,194) | (1,370) | ||||
Purchase from third parties | (231,744) | (477,593) | (71,164) | ||||
Total cost of revenues | (233,029) | (486,787) | (72,534) | ||||
Gross profit | 97,820 | 189,422 | 28,224 | ||||
Operating expenses(1) | |||||||
Research and development expenses | (20,985) | (36,572) | (5,449) | ||||
Selling and marketing expenses (including RMB605 and RMB8,134 with related parties for the three months ended March 31, 2018 and 2019, respectively) | (39,853) | (100,948) | (15,042) | ||||
General and administrative expenses | (4,652) | (15,624) | (2,328) | ||||
Total operating expenses | (65,490) | (153,144) | (22,819) | ||||
Other income | 156 | 812 | 121 | ||||
Income from operations | 32,486 | 37,090 | 5,526 | ||||
Interest income and short-term investment income (including net interest expense of RMB333 and nil with related parties for the three months ended March 31, 2018 and 2019, respectively) | 1,490 | 9,707 | 1,446 | ||||
Other non-operating income | - | 431 | 64 | ||||
Income before income tax expenses | 33,976 | 47,228 | 7,036 | ||||
Income tax expenses | (4,552) | (5,900) | (879) | ||||
Net income | 29,424 | 41,328 | 6,157 | ||||
Less: Net loss attributable to the non-controlling interest shareholder | - | 138 | 21 | ||||
Net income attributable to the Company | 29,424 | 41,190 | 6,136 | ||||
Accretion of Series A Preferred Shares | (2,129) | - | - | ||||
Cumulative dividend on Series A Preferred Shares | (2,545) | - | - | ||||
Cumulative dividend on Class B Ordinary Shares | (207) | - | - | ||||
Undistributed earnings allocated to Series A Preferred Shares | (2,383) | - | - | ||||
Undistributed earnings allocated to Class B Ordinary Shares | (17,728) | - | - | ||||
Undistributed earnings allocated to unvested Class A ordinary shares | (1,108) | - | - | ||||
Net income attributable to ordinary shareholders of the Company | 3,324 | 41,190 | 6,136 | ||||
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 | ||||||
March 31, 2018 | March 31, 2019 | March 31, 2019 | ||||
RMB | RMB | US$ | ||||
Net income attributable to the Company | 29,424 | 41,190 | 6,136 | |||
Other comprehensive income (loss), net of tax | ||||||
Foreign currency translation adjustment | 11,568 | (14,083) | (2,098) | |||
Total comprehensive income attributable to the Company | 40,992 | 27,107 | 4,038 | |||
Net income per ADS* | ||||||
-Basic | 0.39 | 0.60 | 0.09 | |||
-Diluted | 0.33 | 0.57 | 0.08 | |||
Weighted average number of ADS used in calculating net income per ADS | ||||||
-Basic | 8,454,545 | 69,266,667 | 69,266,667 | |||
-Diluted | 10,535,115 | 71,720,196 | 71,720,196 | |||
Net income per share attributable to ordinary shareholders of the Company | ||||||
-Basic | 0.13 | 0.20 | 0.03 | |||
-Diluted | 0.11 | 0.19 | 0.03 | |||
Weighted average number of ordinary shares used in calculating net income per share | ||||||
-Basic | 25,363,636 | 207,800,000 | 207,800,000 | |||
-Diluted | 31,605,346 | 215,160,587 | 215,160,587 | |||
*Each ADS represents 3 ordinary shares. | ||||||
(1) Share-based compensation was allocated in operating expenses as follows: |
Three Months Ended | |||||
March 31, 2018 | March 31, 2019 | March 31, 2019 | |||
RMB | RMB | US$ | |||
General and administrative expenses | 494 | 1,871 | 279 | ||
Research and development expenses | 1,066 | 6,106 | 910 | ||
Selling and marketing expenses | 623 | 3,817 | 569 |
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 | |||||
March 31, 2018 | March 31, 2019 | March 31, 2019 | |||
RMB | RMB | US$ | |||
Income from operations | 32,486 | 37,090 | 5,526 | ||
Share-based compensation expenses | 2,183 | 11,794 | 1,758 | ||
Non-GAAP operating income | 34,669 | 48,884 | 7,284 | ||
Net income | 29,424 | 41,328 | 6,157 | ||
Share-based compensation expenses | 2,183 | 11,794 | 1,758 | ||
Non-GAAP net income | 31,607 | 53,122 | 7,915 | ||
Net income attributable to the Company | 29,424 | 41,190 | 6,136 | ||
Share-based compensation expenses | 2,183 | 11,794 | 1,758 | ||
Non-GAAP net income attributable to the Company | 31,607 | 52,984 | 7,894 | ||
Net income attributable to ordinary shareholders | 3,324 | 41,190 | 6,136 | ||
Share-based compensation expenses | 2,183 | 11,794 | 1,758 | ||
Non-GAAP net income attributable to ordinary shareholders | 5,507 | 52,984 | 7,894 | ||
Non-GAAP net income per ADS | |||||
-Basic | 0.66 | 0.75 | 0.11 | ||
-Diluted | 0.51 | 0.75 | 0.11 | ||
Weighted average number of ADS used in calculating Non-GAAP net income per ADS | |||||
-Basic | 8,454,545 | 69,266,667 | 69,266,667 | ||
-Diluted | 10,535,115 | 71,720,196 | 71,720,196 | ||
Non-GAAP net income per ordinary share | |||||
-Basic | 0.22 | 0.25 | 0.04 | ||
-Diluted | 0.17 | 0.25 | 0.04 | ||
Weighted average number of ordinary shares used in calculating Non-GAAP net income per share | |||||
-Basic | 25,363,636 | 207,800,000 | 207,800,000 | ||
-Diluted | 31,605,346 | 215,160,587 | 215,160,587 |
Note: The non-GAAP adjustments do not have any tax impact as share-based compensation expenses are non-deductible for income tax purpose.
VIOMI TECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(All amounts in thousands, except shares, ADS, per share and per ADS data)
For the three months ended, | ||||||
March 31, 2018 | March 31, 2019 | |||||
RMB | RMB | |||||
Cash flows from operating activities | ||||||
Net income | 29,424 | 41,328 | ||||
Adjustment to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 540 | 2,105 | ||||
Inventory write-down | 10 | 2,045 | ||||
Share-based compensation | 2,183 | 11,794 | ||||
Deferred income tax benefits | (4,137) | (908) | ||||
Investment loss | - | 1,738 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts and notes receivable from third parties | (28,099) | (41,513) | ||||
Accounts receivable from a related party | 100,677 | 101,804 | ||||
Inventories | (26,463) | (68,775) | ||||
Prepaid expenses and other assets | (34,493) | (5,637) | ||||
Other receivables from related parties | 12,810 | 60,087 | ||||
Amount due to related parties | 1,720 | (3,305) | ||||
Accounts and notes payable | (62,506) | (27,065) | ||||
Advances from customers | 26,671 | (31,269) | ||||
Income tax payables | 5,191 | 1,791 | ||||
Accrued expense and other liabilities | 10,305 | (15,471) | ||||
Right-of-use asset, net | - | (7,457) | ||||
Lease liabilities | - | 7,868 | ||||
Net cash provided by operating activities | 33,833 | 29,160 | ||||
Cash flows from investing activities | ||||||
Placement of short-term investments | - | (480,222) | ||||
Maturity of short-term investments | - | 302,339 | ||||
Purchase of equipment | (1,074) | (7,510) | ||||
Purchase of intangible assets | - | (1,386) | ||||
Purchase of non-current assets | - | (451) | ||||
Net cash used in investing activities | (1,074) | (187,230) | ||||
Cash flows from financing activities | ||||||
Repayment of debt to a related party | (31,900 ) | - | ||||
Cash paid to the issuance of ordinary shares upon IPO | - | (2,637) | ||||
Net cash used in financing activities | (31,900) | (2,637) | ||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (1,178) | (14,108) | ||||
Net decrease in cash and cash equivalents and restricted cash | (319) | (174,815) | ||||
Cash and cash equivalents and restricted cash at the beginning of the period | 279,952 | 969,848 | ||||
Cash and cash equivalents and restricted cash at the end of the period | 279,633 | 795,033 | ||||
Supplemental disclosures of cash flows information: | ||||||
Cash paid for income tax | (3,498) | (5,018) | ||||
Cash paid for interest expense | (768) | - | ||||
Acquisition of property and equipment in form of accounts payable | 375 | 2,584 |
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3The Company has adopted ASU No. 2016-02 ‘‘Leases” beginning
Source: Viomi Technology Co., Ltd