Fourth quarter and full year net revenues increased by 142.6% and 193.3% year-over-year, respectively, both exceeding guidance
Declares special dividend of
Fourth Quarter 2018 Financial and Operating Highlights
- Net revenues reached
RMB955.7 million (US$139.0 million ), an increase of 142.6% from the fourth quarter of 2017. - Gross margin was 27.0%, compared to 32.4% for the fourth quarter of 2017.
- Net income was
RMB54.9 million (US$8.0 million ), compared toRMB47.0 million for the fourth quarter of 2017. - Non-GAAP net income1 was
RMB65.1 million (US$9.5 million ), compared toRMB47.5 million for the fourth quarter of 2017. - Number of household users reached approximately 1.7 million, compared to approximately 1.4 million as of the end of the third quarter of 2018 and approximately 0.9 million as of the end of the fourth quarter of 2017.
- Percentage of household users with at least two connected products reached 14.3%, compared to 13.2% as of the end of the third quarter of 2018 and 11.7% as of the end of the fourth quarter of 2017.
- Number of
Viomi offline experience stores reached approximately 1,500, compared to approximately 1,200 as of the end of the third quarter of 2018 and approximately 400 as of the end of the fourth quarter of 2017.
Full Year 2018 Financial and Operating Highlights
- Net revenues reached
RMB2,561.2 million (US$372.5 million ), an increase of 193.3% from 2017. - Gross margin was 28.0%, compared to 31.5% for 2017.
- Net income was
RMB65.4 million (US$9.5 million ), compared toRMB93.2 million for 2017. - Non-GAAP net income was
RMB182.0 million (US$26.5 million ), compared toRMB99.1 million for 2017.
__________________________________
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 are once again pleased to report strong operational and financial results for the fourth quarter of 2018 that exceeded our expectations, capping off an extraordinary year for Viomi,” said Mr.
“In terms of new product launches, we continued to broaden our existing product lines to further enrich our IoT-enabled smart home product portfolio. In addition, as we recently announced at our product launch event at the Appliance & Electronics World Expo in
“Finally, in light of our strong operational and financial performance, we are pleased to declare a special cash dividend of
“Our strong product sales, in particular sales of our
“In addition, during the fourth quarter, we continued to deepen our household penetration with the number of our household users reaching approximately 1.7 million as of the end of 2018. Furthermore, the percentage of our household users possessing at least two of our IoT products increased to 14.3% from 13.2% as of the end of the third quarter,” Mr. Jiang concluded.
Fourth Quarter 2018 Financial Results
Net revenues increased by 142.6% to
IoT-enabled smart home products. Revenues from IoT-enabled smart home products increased by 149.9% to
- Smart water purification systems. Revenues from smart water purification systems increased by 21.8% to
RMB285.7 million (US$41.6 million ) fromRMB234.7 million for the fourth quarter of 2017.
- Smart kitchen products. Revenues from smart kitchen products increased by 618.0% to
RMB263.1 million (US$38.3 million ) fromRMB36.6 million for the fourth quarter of 2017.
- Other smart products. Revenues from other smart products increased by 498.4% to
RMB221.8 million (US$32.3 million ) fromRMB37.1 million for the fourth quarter of 2017.
Consumable products. Revenues from consumable products increased by 12.0% to
Value added businesses. Revenues from value-added businesses increased by 197.7% to
Cost of revenues increased by 162.1% to
Gross profit increased by 102.2% to
Total operating expenses increased by 165.0% to
Research and development expenses increased by 62.3% to
Selling and marketing expenses increased by 222.0% to
General and administrative expenses increased by 200.3% to
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 and Cash Flow
As of
For the fourth quarter of 2018, net cash provided by operating activities was
Shares Outstanding
As of
Dividend
The Company today announced that its Board of Directors has approved a special cash dividend of
Holders of American Depositary Shares (“ADS”), each representing three ordinary shares of the Company, are accordingly entitled to a cash dividend of
Full Year 2018 Financial Results
Net revenues increased by 193.3% to
IoT-enabled smart home products. Revenues from IoT-enabled smart home products increased by 192.2% to
- Smart water purification systems. Revenues from smart water purification systems increased by 63.0% to
RMB930.2 million (US$135.3 million ) fromRMB570.8 million for 2017.
- Smart kitchen products. Revenues from smart kitchen products increased by 1,370.7% to
RMB745.0 million (US$108.4 million ) fromRMB50.7 million for 2017.
- Other smart products. Revenues from other smart products increased by 346.9% to
RMB406.1 million (US$59.1 million ) fromRMB90.9 million for 2017.
Consumable products. Revenues from consumable products increased by 62.2% to
Value-added businesses. Revenues from value-added businesses increased by 360.5% to
Cost of revenues increased by 208.2% to
Gross profit increased by 160.8% to
Total operating expenses increased by 272.0% to
Research and development expenses increased by 104.5% to
Selling and marketing expenses increased by 298.3% to
General and administrative expenses increased to
Income from operations was
Income before income tax expenses was
Income tax expenses were
Net income was
Non-GAAP net income was
Outlook
For the first 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 an earnings conference call at
Dial-in details for the earnings conference call are as follows:
United States (toll free): | +1-888-346-8982 |
International: Hong Kong (toll free): |
+1-412-902-4272 800-905-945 |
Hong Kong: | +852-3018-4992 |
China (toll free): | 400-120-1203 |
Conference ID: | 10129292 |
Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.viomi.com.
A replay of the conference call will be accessible by phone one hour after the conclusion of the live call at the following numbers, until
United States: | +1-877-344-7529 |
International: | +1-412-317-0088 |
Replay Access Code: | 10129292 |
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.
Notes to Unaudited Financial Information
The unaudited financial information disclosed in this press release is preliminary. The audit of the financial statements and related notes to be included in the Company’s annual report on Form 20-F for the year ended
Adjustments to the financial statements may be identified when the audit work is completed, which could result in significant differences between the Company’s audited financial statements and this preliminary unaudited financial information.
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 December 31, |
||||||
2017 | 2018 | 2018 | |||||
RMB | RMB | US$ | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | 279,952 | 940,298 | 136,761 | ||||
Restricted cash | - | 29,550 | 4,298 | ||||
Short-term investments | - | 168,993 | 24,579 | ||||
Accounts receivable from third parties (net of allowance of nil and nil as of December 31, 2017 and 2018, respectively) | 4,348 | 111,718 | 16,249 | ||||
Accounts receivable from a related party (net of allowance of nil and nil as of December 31, 2017 and 2018, respectively) | 249,548 | 260,984 | 37,959 | ||||
Other receivables from related parties (net of allowance of nil and nil as of December 31, 2017 and 2018, respectively) | 57,608 | 112,320 | 16,336 | ||||
Inventories | 50,692 | 231,975 | 33,739 | ||||
Prepaid expenses and other current assets | 23,283 | 46,890 | 6,819 | ||||
Total current assets | 665,431 | 1,902,728 | 276,740 | ||||
Non-current assets | |||||||
Prepaid expenses and other non-current assets | - | 3,636 | 529 | ||||
Property, plant and equipment, net | 3,086 | 11,301 | 1,644 | ||||
Deferred tax assets | 3,048 | 5,234 | 761 | ||||
Intangible assets, net | - | 169 | 25 | ||||
Total non-current assets | 6,134 | 20,340 | 2,959 | ||||
Total assets | 671,565 | 1,923,068 | 279,699 | ||||
Liabilities, mezzanine equity and shareholders’ equity | |||||||
Current liabilities | |||||||
Accounts and notes payable | 291,643 | 548,481 | 79,773 | ||||
Advances from customers | 27,015 | 86,312 | 12,554 | ||||
Amount due to related parties | 35,953 | 5,763 | 838 | ||||
Accrued expenses and other liabilities | 61,424 | 200,930 | 29,225 | ||||
Share-based compensation liabilities | 4,738 | - | - | ||||
Income tax payables | 11,612 | 10,199 | 1,483 | ||||
Total current liabilities | 432,385 | 851,685 | 123,873 | ||||
Non-current liabilities | |||||||
Accrued expenses and other liabilities | 460 | 518 | 75 | ||||
Total liabilities | 432,845 | 852,203 | 123,948 | ||||
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 December 31, | ||||||||
2017 | 2018 | 2018 | |||||||
RMB | RMB | US$ | |||||||
Mezzanine equity | |||||||||
Class B redeemable convertible ordinary shares (“Class B Ordinary Shares”) (US$0.00001 par value; 1,352,727,280 shares authorized, 135,272,728 shares issued and 84,545,455 shares outstanding as of December 31, 2017 and none authorized, issued and outstanding as of December 31, 2018) | 256,883 | - | - | ||||||
Series A redeemable convertible preferred shares (“Series A Preferred Shares”) (US$0.00001 par value; 181,818,180 shares authorized and 18,181,818 shares issued and outstanding as of December 31, 2017 and none authorized, issued and outstanding as of December 31, 2018) | 151,045 | - | - | ||||||
Total mezzanine equity | 407,928 | - | - | ||||||
Shareholders’ (deficit) equity | |||||||||
Class A ordinary shares (US$0.00001 par value; 3,465,454,540 and nil shares authorized as of December 31, 2017 and 2018, respectively; 33,818,182 and nil shares issued as of December 31, 2017 and 2018, respectively; 25,363,636 and none outstanding as of December 31, 2017 and 2018, respectively) | 2 | - | - | ||||||
Post-IPO Class A Ordinary Shares (US$0.00001 par value; 4,800,000,000 shares authorized; nil and 90,200,000 shares issued and outstanding as of December 31, 2017 and 2018, respectively) | - | 5 | 1 | ||||||
Post-IPO Class B Ordinary Shares (US$0.00001 par value; 150,000,000 shares authorized; nil and 117,600,000 shares issued and outstanding as of December 31, 2017 and 2018, respectively) | - | 7 | 1 | ||||||
Additional paid-in capital | 9,679 | 1,193,174 | 173,540 | ||||||
Accumulated deficit | (160,885) | (95,527) | (13,894) | ||||||
Accumulated other comprehensive loss | (18,004) | (29,786) | (4,332) | ||||||
Total Viomi Technology Co., Ltd (the “Company”)’s shareholders’ (deficit) equity | (169,208) | 1,067,873 | 155,316 | ||||||
Non-controlling interests | - | 2,992 | 435 | ||||||
Total shareholders’ (deficit) equity | (169,208) | 1,070,865 | 155,751 | ||||||
Total liabilities, mezzanine equity and shareholders’ (deficit) equity | 671,565 | 1,923,068 | 279,699 | ||||||
VIOMI TECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(All amounts in thousands, except shares, ADS, per share and per ADS data)
Three Months Ended | Twelve Months Ended | |||||||||||||
December 31, 2017 |
December 31, 2018 |
December 31, 2018 |
December 31, 2017 |
December 31, 2018 |
December 31, 2018 |
|||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||||
Net revenues: | ||||||||||||||
A related party | 316,132 | 416,589 | 60,590 | 739,464 | 1,311,852 | 190,801 | ||||||||
Third parties | 77,795 | 539,147 | 78,416 | 133,755 | 1,249,377 | 181,714 | ||||||||
Total net revenues | 393,927 | 955,736 | 139,006 | 873,219 | 2,561,229 | 372,515 | ||||||||
Cost of revenues: | ||||||||||||||
Purchase from a related party | (1,037) | (6,706) | (975) | (1,296) | (14,733) | (2,143) | ||||||||
Purchase from third parties | (265,074) | (690,646) | (100,450) | (596,740) | (1,828,699) | (265,973) | ||||||||
Total cost of revenues | (266,111) | (697,352) | (101,425) | (598,036) | (1,843,432) | (268,116) | ||||||||
Gross profit | 127,816 | 258,384 | 37,581 | 275,183 | 717,797 | 104,399 | ||||||||
Operating expenses(1) | ||||||||||||||
Research and development expenses | (25,764) | (41,812) | (6,081) | (60,749) | (124,230) | (18,069) | ||||||||
Selling and marketing expenses (including RMB1,964, RMB13,040, RMB3,327 and RMB24,598 with related parties for the three months ended December 31, 2017 and 2018 and for the twelve months ended December 31, 2017 and 2018, respectively) | (42,088) | (135,525) | (19,711) | (95,296) | (379,554) | (55,204) | ||||||||
General and administrative expenses | (7,087) | (21,283) | (3,095) | (15,818) | (135,532) | (19,712) | ||||||||
Total operating expenses | (74,939) | (198,620) | (28,887) | (171,863) | (639,316) | (92,985) | ||||||||
Other income | 121 | 476 | 69 | 2,236 | 1,829 | 266 | ||||||||
Income from operations | 52,998 | 60,240 | 8,763 | 105,556 | 80,310 | 11,680 | ||||||||
Interest income and short-term investment income (including net interest expense of RMB317, nil, RMB1,271 and RMB333 with related parties for the three months ended December 31, 2017 and 2018 and for the twelve months ended December 31, 2017 and 2018, respectively) | 711 | 3,403 | 495 | 2,402 | 8,846 | 1,287 | ||||||||
Other non-operating income | - | 255 | 37 | - | 255 | 37 | ||||||||
Income before income tax expenses | 53,709 | 63,898 | 9,295 | 107,958 | 89,411 | 13,004 | ||||||||
Income tax expenses | (6,710) | (9,004) | (1,310) | (14,718) | (24,061) | (3,500) | ||||||||
Net income | 46,999 | 54,894 | 7,985 | 93,240 | 65,350 | 9,504 | ||||||||
Less: Net loss attributable to the non-controlling interest shareholder | - | (7) | (1) | - | (8) | (1) | ||||||||
Net income attributable to the Company | 46,999 | 54,901 | 7,986 | 93,240 | 65,358 | 9,505 | ||||||||
Accretion of Series A Preferred Shares | (2,227) | - | - | (8,834) | (6,563) | (955) | ||||||||
Cumulative dividend on Series A Preferred Shares | (2,644) | - | - | (10,803) | (7,631) | (1,110) | ||||||||
Cumulative dividend on Class B Ordinary Shares | (215) | - | - | (877) | (620) | (90) | ||||||||
Undistributed earnings allocated to Series A Preferred Shares | (4,069) | - | - | (7,061) | - | - | ||||||||
Undistributed earnings allocated to Class B Ordinary Shares | (30,276) | - | - | (52,533) | - | - | ||||||||
Undistributed earnings allocated to unvested Class A ordinary shares | (1,892) | - | - | (5,099) | - | - | ||||||||
Net income attributable to ordinary shareholders of the Company | 5,676 | 54,901 | 7,986 | 8,033 | 50,544 | 7,350 | ||||||||
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 | Twelve Months Ended | |||||||
December 31, 2017 |
December 31, 2018 |
December 31, 2018 |
December 31, 2017 |
December 31, 2018 |
December 31, 2018 |
|||
RMB | RMB | US$ | RMB | RMB | US$ | |||
Net income attributable to the Company | 46,999 | 54,901 | 7,986 | 93,240 | 65,358 | 9,505 | ||
Other comprehensive income (loss), net of tax | ||||||||
Foreign currency translation adjustment | 5,248 | (363) | (53) | 19,102 | (11,782) | (1,714) | ||
Total comprehensive income attributable to the Company | 52,247 | 54,538 | 7,933 | 112,342 | 53,576 | 7,791 | ||
Net income per ADS* | ||||||||
- Basic | 0.66 | 0.78 | 0.11 | 1.17 | 2.10 | 0.31 | ||
- Diluted | 0.57 | 0.75 | 0.11 | 0.93 | 1.92 | 0.28 | ||
Weighted average number of ADS used in calculating net income per ADS | ||||||||
-Basic | 8,454,545 | 69,266,667 | 69,266,667 | 6,894,894 | 23,923,678 | 23,923,678 | ||
-Diluted | 10,152,436 | 72,122,943 | 72,122,943 | 8,526,602 | 26,530,260 | 26,530,260 | ||
Net income per share attributable to ordinary shareholders of the Company | ||||||||
- Basic | 0.22 | 0.26 | 0.04 | 0.39 | 0.70 | 0.10 | ||
- Diluted | 0.19 | 0.25 | 0.04 | 0.31 | 0.64 | 0.09 | ||
Weighted average number of ordinary shares used in calculating net income per share | ||||||||
-Basic | 25,363,636 | 207,800,000 | 207,800,000 | 20,684,681 | 71,771,033 | 71,771,033 | ||
-Diluted | 30,457,308 | 216,368,830 | 216,368,830 | 25,579,806 | 79,590,780 | 79,590,780 | ||
*Each ADS represents 3 ordinary shares. | ||||||||
(1) Share-based compensation was allocated in operating expenses as follows: |
Three Months Ended | Twelve Months Ended | |||||||
December 31, 2017 |
December 31, 2018 |
December 31, 2018 |
December 31, 2017 |
December 31, 2018 |
December 31, 2018 |
|||
RMB | RMB | US$ | RMB | RMB | US$ | |||
General and administrative expenses | 422 | 1,740 | 253 | 3,303 | 93,718 | 13,631 | ||
Research and development expenses | 55 | 5,381 | 783 | 1,903 | 14,476 | 2,105 | ||
Selling and marketing expenses | 31 | 3,132 | 456 | 615 | 8,417 | 1,224 | ||
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 | Twelve Months Ended | |||||||
December 31, 2017 |
December 31, 2018 |
December 31, 2018 |
December 31, 2017 |
December 31, 2018 |
December 31, 2018 |
|||
RMB | RMB | US$ | RMB | RMB | US$ | |||
Income from operations | 52,998 | 60,240 | 8,763 | 105,556 | 80,310 | 11,680 | ||
Share-based compensation expenses | 508 | 10,253 | 1,492 | 5,821 | 116,611 | 16,960 | ||
Non-GAAP operating income | 53,506 | 70,493 | 10,255 | 111,377 | 196,921 | 28,640 | ||
Net income | 46,999 | 54,894 | 7,985 | 93,240 | 65,350 | 9,504 | ||
Share-based compensation expenses | 508 | 10,253 | 1,492 | 5,821 | 116,611 | 16,960 | ||
Non-GAAP net income | 47,507 | 65,147 | 9,477 | 99,061 | 181,961 | 26,464 | ||
Net income attributable to the Company | 46,999 | 54,901 | 7,986 | 93,240 | 65,358 | 9,505 | ||
Share-based compensation expenses | 508 | 10,253 | 1,492 | 5,821 | 116,611 | 16,960 | ||
Non-GAAP net income attributable to the Company | 47,507 | 65,154 | 9,478 | 99,061 | 181,969 | 26,465 | ||
Net income attributable to ordinary shareholders | 5,676 | 54,901 | 7,986 | 8,033 | 50,544 | 7,350 | ||
Share-based compensation expenses | 508 | 10,253 | 1,492 | 5,821 | 116,611 | 16,960 | ||
Non-GAAP net income attributable to ordinary shareholders | 6,184 | 65,154 | 9,478 | 13,854 | 167,155 | 24,310 | ||
Non-GAAP net income per ADS | ||||||||
-Basic | 0.72 | 0.93 | 0.14 | 2.01 | 6.99 | 1.02 | ||
-Diluted | 0.60 | 0.90 | 0.13 | 1.62 | 6.30 | 0.92 | ||
Weighted average number of ADS used in calculating Non-GAAP net income per ADS | ||||||||
-Basic | 8,454,545 | 69,266,667 | 69,266,667 | 6,894,894 | 23,923,678 | 23,923,678 | ||
-Diluted | 10,152,436 | 72,122,943 | 72,122,943 | 8,526,602 | 26,530,260 | 26,530,260 | ||
Non-GAAP net income per ordinary share | ||||||||
-Basic | 0.24 | 0.31 | 0.05 | 0.67 | 2.33 | 0.34 | ||
-Diluted | 0.20 | 0.30 | 0.04 | 0.54 | 2.10 | 0.31 | ||
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 | 20,684,681 | 71,771,033 | 71,771,033 | ||
-Diluted | 30,457,308 | 216,368,830 | 216,368,830 | 25,579,806 | 79,590,780 | 79,590,780 |
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