Fourth Quarter 2019 Financial and Operating Highlights
- Net revenues reached
RMB1,741.7 million (US$250.2 million ), an increase of 82.2% from the fourth quarter of 2018. - Gross margin was 19.9%, compared to 27.0% for the fourth quarter of 2018.
- Net income was
RMB90.2 million (US$13.0 million ), an increase of 64.4% from the fourth quarter of 2018. - Non-GAAP net income1 was
RMB100.7 million (US$14.5 million ), an increase of 54.6% from the fourth quarter of 2018. - Number of household users reached more than 3.2 million, compared to approximately 2.6 million as of the end of the third quarter of 2019 and approximately 1.7 million as of the end of the fourth quarter of 2018.
- Percentage of household users with at least two connected products reached 17.9%, compared to 17.1% as of the end of the third quarter of 2019 and 14.3% as of the end of the fourth quarter of 2018.
- Number of
Viomi offline experience stores reached approximately 1,700, compared to approximately 1,600 as of the end of the third quarter of 2019 and approximately 1,500 as of the end of the fourth 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.
Full Year 2019 Financial and Operating Highlights
- Net revenues reached
RMB4,647.5 million (US$667.6 million ), an increase of 81.5% from 2018. - Gross margin was 23.3%, compared to 28.0% for 2018.
- Net income was
RMB293.8 million (US$42.2 million ), an increase of 349.6% from 2018. - Non-GAAP net income was
RMB337.0 million (US$48.4 million ), an increase of 85.2% from 2018.
“2019 was another extraordinary year for
“Going into 2020, and in line with our 5G + IoT strategy, we will continue to strengthen our product portfolio through the launch of new and exciting product lines, along with optimizing SKUs within each of our existing product categories as well as expanding and diversifying our sales channels,” added
“The COVID-19 outbreak has created unique global and industry-wide challenges, impacting supply chains, logistics, sales channels, as well as overall consumer sentiment and purchasing behavior. We, together with our suppliers and customers, have gradually resumed normal operations since mid-February and have seen noticeable improvements going into March. We are fully confident that our strong business fundamentals, robust financial resources and prudent growth strategies will enable us to power through this unprecedented period. Finally, in light of prevailing market conditions, the Company today announced that our Board of Directors had approved a share repurchase program whereby the Company is authorized to repurchase up to
“Product sales across our
“With regard to our offline store network, the number of
Fourth Quarter 2019 Financial Results
Net revenues increased by 82.2% to
IoT-enabled smart home products. Revenues from IoT-enabled smart home products increased by 75.1% to
- Smart water purification systems. Revenues from smart water purification systems increased by 35.1% to
RMB385.9 million (US$55.4 million ) fromRMB285.7 million for the fourth quarter of 2018. The growth was primarily driven by the introduction of a new series of smart water purifier products, together with an overall increase in sales volumes.
- Smart kitchen products. Revenues from smart kitchen products increased by 64.5% to
RMB432.8 million (US$62.2 million ) fromRMB263.1 million for the fourth quarter of 2018. The growth was primarily driven by significant increases in sales volumes of the Company’sViomi -branded refrigerator products, together with the rollout of new Xiaomi-branded products such as range hoods and gas stoves.
- Other smart products. Revenues from other smart products increased by 139.4% to
RMB530.9 million (US$76.3 million ) fromRMB221.8 million for the fourth quarter of 2018. The rapid growth was primarily driven by the rollout of new Xiaomi-branded sweeper robot products.
Consumable products. Revenues from consumable products increased by 125.6% to
Value-added businesses. Revenues from value-added businesses increased by 107.7% to
Cost of revenues increased by 100.1% to
Gross profit increased by 34.1% to
Total operating expenses increased by 37.7% to
Research and development expenses increased by 57.0% to
Selling and marketing expenses increased by 36.7% 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 and Cash Flow
As of
For the fourth quarter of 2019, net cash provided by operating activities was
Shares Outstanding
As of
Full Year 2019 Financial Results
Net revenues increased by 81.5% to
IoT-enabled smart home products. Revenues from IoT-enabled smart home products increased by 72.4% to
- Smart water purification systems. Revenues from smart water purification systems increased by 14.5% to
RMB1,065.2 million (US$153.0 million ) fromRMB930.2 million for 2018.
- Smart kitchen products. Revenues from smart kitchen products increased by 77.6% to
RMB1,322.8 million (US$190.0 million ) fromRMB745.0 million for 2018.
- Other smart products. Revenues from other smart products increased by 195.3% to
RMB1,199.4 million (US$172.3 million ) fromRMB406.1 million for 2018.
Consumable products. Revenues from consumable products increased by 87.3% to
Value-added businesses. Revenues from value-added businesses increased by 135.0% to
Cost of revenues increased by 93.4% to
Gross profit increased by 50.8% to
Total operating expenses increased by 26.3% to
Research and development expenses increased by 65.0% to
Selling and marketing expenses increased by 39.4% to
General and administrative expenses decreased by 46.1% 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 2020, the Company currently expects net revenues to be approximately flat as compared to the first quarter of 2019. This outlook factors the estimated impact from the COVID-19 outbreak and other recent industry developments, and 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.
Share Repurchase Plan
On
The proposed share repurchase may be effected on the open market at prevailing market prices and/or in negotiated transactions off the market from time to time, depending on a number of factors, including, but not limited to, share price, trading volume and general market conditions, along with the Company’s working capital requirements, general business conditions and other factors as market conditions warrant in accordance with applicable requirements of Rule 10b5-1 and/or Rule 10b-18 under the
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 |
400-120-1203 |
| 800-905-945 | |
| +852-3018-4992 | |
| Conference ID: | 10140160 |
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: | 10140160 |
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.
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
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 |
As of |
||||||
| 2018 | 2019 | 2019 | |||||
| RMB | RMB | US$ | |||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | 940,298 | 972,438 | 139,682 | ||||
| Restricted cash | 29,550 | 30,567 | 4,391 | ||||
| Short-term deposits | - | 60,000 | 8,618 | ||||
| Short-term investments | 168,993 | 316,201 | 45,419 | ||||
| Accounts and notes receivable from third parties (net of allowance of nil and |
111,718 | 316,189 | 45,418 | ||||
| Accounts receivable from a related party (net of allowance of nil and nil as of |
260,984 | 707,947 | 101,691 | ||||
| Other receivables from related parties (net of allowance of nil and nil as of |
112,320 | 23,944 | 3,439 | ||||
| Inventories | 231,975 | 418,015 | 60,044 | ||||
| Prepaid expenses and other current assets | 46,890 | 62,314 | 8,951 | ||||
| Total current assets | 1,902,728 | 2,907,615 | 417,653 | ||||
| Non-current assets | |||||||
| Prepaid expenses and other non-current assets | 3,636 | 11,170 | 1,604 | ||||
| Property, plant and equipment, net | 11,301 | 67,293 | 9,666 | ||||
| Deferred tax assets | 5,234 | 12,276 | 1,763 | ||||
| Intangible assets, net | 169 | 4,357 | 626 | ||||
| Right-of-use assets, net3 | - | 19,762 | 2,839 | ||||
| Total non-current assets | 20,340 | 114,858 | 16,498 | ||||
| Total assets | 1,923,068 | 3,022,473 | 434,151 | ||||
| Liabilities and shareholders’ equity | |||||||
| Current liabilities | |||||||
| Accounts and notes payable | 548,481 | 1,043,159 | 149,840 | ||||
| Advances from customers | 86,312 | 103,150 | 14,817 | ||||
| Amount due to related parties | 5,763 | 25,106 | 3,606 | ||||
| Accrued expenses and other liabilities | 200,930 | 325,042 | 46,689 | ||||
| Short-term borrowing | - | 95,868 | 13,771 | ||||
| Income tax payables | 10,199 | 33,522 | 4,815 | ||||
| Lease liabilities due within one year3 | - | 6,993 | 1,004 | ||||
| Total current liabilities | 851,685 | 1,632,840 | 234,542 | ||||
| Non-current liabilities | |||||||
| Accrued expenses and other liabilities | 518 | 1,795 | 258 | ||||
| Lease liabilities3 | - | 13,391 | 1,923 | ||||
| Total non-current liabilities | 518 | 15,186 | 2,181 | ||||
| Total liabilities | 852,203 | 1,648,026 | 236,723 | ||||
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 |
As of |
||||||||
| 2018 | 2019 | 2019 | |||||||
| RMB | RMB | US$ | |||||||
| Shareholders’ equity | |||||||||
| Class A ordinary shares ( |
5 | 6 | 1 | ||||||
| Class B ordinary shares ( |
7 | 6 | 1 | ||||||
| Additional paid-in capital | 1,193,174 | 1,192,332 | 171,268 | ||||||
| (Accumulated deficit) retained earnings | (95,527 | ) | 195,596 | 28,096 | |||||
| Accumulated other comprehensive loss | (29,786 | ) | (19,145 | ) | (2,750 | ) | |||
| Total equity attributable to shareholders of the Company | 1,067,873 | 1,368,795 | 196,616 | ||||||
| Non-controlling interests | 2,992 | 5,652 | 812 | ||||||
| Total shareholders’ equity | 1,070,865 | 1,374,447 | 197,428 | ||||||
| Total liabilities and shareholders’ equity | 1,923,068 | 3,022,473 | 434,151 | ||||||
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 | |||||||||||||
2018 |
2019 |
2019 |
2018 |
2019 |
2019 |
|||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||
| Net revenues: | ||||||||||||||
| A related party | 416,589 | 891,271 | 128,023 | 1,311,852 | 2,112,170 | 303,394 | ||||||||
| Third parties | 539,147 | 850,379 | 122,149 | 1,249,377 | 2,535,343 | 364,179 | ||||||||
| Total net revenues | 955,736 | 1,741,650 | 250,172 | 2,561,229 | 4,647,513 | 667,573 | ||||||||
| Cost of revenues (including |
(697,352 | ) | (1,395,080 | ) | (200,390 | ) | (1,843,432 | ) | (3,565,109 | ) | (512,095 | ) | ||
| Gross profit | 258,384 | 346,570 | 49,782 | 717,797 | 1,082,404 | 155,478 | ||||||||
| Operating expenses(1) | ||||||||||||||
| Research and development expenses (including nil, |
(41,812 | ) | (65,633 | ) | (9,428 | ) | (124,230 | ) | (204,942 | ) | (29,438 | ) | ||
| Selling and marketing expenses (including |
(135,525 | ) | (185,320 | ) | (26,620 | ) | (379,554 | ) | (529,212 | ) | (76,017 | ) | ||
| General and administrative expenses | (21,283 | ) | (22,628 | ) | (3,250 | ) | (135,532 | ) | (73,061 | ) | (10,495 | ) | ||
| Total operating expenses | (198,620 | ) | (273,581 | ) | (39,298 | ) | (639,316 | ) | (807,215 | ) | (115,950 | ) | ||
| Other income, net | 476 | 19,607 | 2,816 | 1,829 | 35,880 | 5,154 | ||||||||
| Income from operations | 60,240 | 92,596 | 13,300 | 80,310 | 311,069 | 44,682 | ||||||||
| Interest income and short-term investment income, net (including net interest expense of nil, nil, |
3,403 | 9,582 | 1,376 | 8,846 | 26,109 | 3,750 | ||||||||
| Other non-operating income | 255 | 530 | 76 | 255 | 1,842 | 265 | ||||||||
| Income before income tax expenses | 63,898 | 102,708 | 14,752 | 89,411 | 339,020 | 48,697 | ||||||||
| Income tax expenses | (9,004 | ) | (12,470 | ) | (1,791 | ) | (24,061 | ) | (45,190 | ) | (6,491 | ) | ||
| Net income | 54,894 | 90,238 | 12,961 | 65,350 | 293,830 | 42,206 | ||||||||
| Less: Net (loss) income attributable to the non-controlling interest shareholder | (7 | ) | 540 | 78 | (8 | ) | 1,660 | 238 | ||||||
| Net income attributable to the Company | 54,901 | 89,698 | 12,883 | 65,358 | 292,170 | 41,968 | ||||||||
| Accretion of Series A Preferred Shares | - | - | - | (6,563 | ) | - | - | |||||||
| Cumulative dividend on Series A Preferred Shares | - | - | - | (7,631 | ) | - | - | |||||||
| Cumulative dividend on Class B Ordinary Shares | - | - | - | (620 | ) | - | - | |||||||
| Net income attributable to ordinary shareholders of the Company | 54,901 | 89,698 | 12,883 | 50,544 | 292,170 | 41,968 | ||||||||
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 | |||||||||||
2018 |
2019 |
2019 |
2018 |
2019 |
2019 |
|||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||
| Net income attributable to the Company | 54,901 | 89,698 | 12,883 | 65,358 | 292,170 | 41,968 | ||||||
| Other comprehensive (loss) income, net of tax | ||||||||||||
| Foreign currency translation adjustment | (363 | ) | (9,946 | ) | (1,429 | ) | (11,782 | ) | 10,641 | 1,528 | ||
| Total comprehensive income attributable to the Company | 54,538 | 79,752 | 11,454 | 53,576 | 302,811 | 43,496 | ||||||
| Net income per ADS* | ||||||||||||
| -Basic | 0.78 | 1.29 | 0.19 | 2.10 | 4.21 | 0.60 | ||||||
| -Diluted | 0.75 | 1.24 | 0.18 | 1.92 | 4.06 | 0.58 | ||||||
| Weighted average number of ADS used in calculating net income per ADS | ||||||||||||
| -Basic | 69,266,667 | 69,644,780 | 69,644,780 | 23,923,678 | 69,385,502 | 69,385,502 | ||||||
| -Diluted | 72,122,943 | 72,117,474 | 72,117,474 | 26,530,260 | 71,951,859 | 71,951,859 | ||||||
| Net income per share attributable to ordinary shareholders of the Company | ||||||||||||
| -Basic | 0.26 | 0.43 | 0.06 | 0.70 | 1.40 | 0.20 | ||||||
| -Diluted | 0.25 | 0.41 | 0.06 | 0.64 | 1.35 | 0.19 | ||||||
| Weighted average number of ordinary shares used in calculating net income per share | ||||||||||||
| -Basic | 207,800,000 | 208,934,340 | 208,934,340 | 71,771,033 | 208,156,507 | 208,156,507 | ||||||
| -Diluted | 216,368,830 | 216,352,423 | 216,352,423 | 79,590,780 | 215,855,577 | 215,855,577 | ||||||
| *Each ADS represents 3 ordinary shares. | ||||||||||||
| (1) Share-based compensation was allocated in operating expenses as follows: | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||
2018 |
2019 |
2019 |
2018 |
2019 |
2019 |
|||
| RMB | RMB | US$ | RMB | RMB | US$ | |||
| General and administrative expenses | 1,740 | 1,829 | 263 | 93,718 | 7,282 | 1,046 | ||
| Research and development expenses | 5,381 | 6,418 | 922 | 14,476 | 23,564 | 3,385 | ||
| Selling and marketing expenses | 3,132 | 2,263 | 325 | 8,417 | 12,322 | 1,770 | ||
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 | |||||||
2018 |
2019 |
2019 |
2018 |
2019 |
2019 |
|||
| RMB | RMB | US$ | RMB | RMB | US$ | |||
| Income from operations | 60,240 | 92,596 | 13,300 | 80,310 | 311,069 | 44,682 | ||
| Share-based compensation expenses | 10,253 | 10,510 | 1,510 | 116,611 | 43,168 | 6,201 | ||
| Non-GAAP operating income | 70,493 | 103,106 | 14,810 | 196,921 | 354,237 | 50,883 | ||
| Net income | 54,894 | 90,238 | 12,961 | 65,350 | 293,830 | 42,206 | ||
| Share-based compensation expenses | 10,253 | 10,510 | 1,510 | 116,611 | 43,168 | 6,201 | ||
| Non-GAAP net income | 65,147 | 100,748 | 14,471 | 181,961 | 336,998 | 48,407 | ||
| Net income attributable to the Company | 54,901 | 89,698 | 12,883 | 65,358 | 292,170 | 41,968 | ||
| Share-based compensation expenses | 10,253 | 10,510 | 1,510 | 116,611 | 43,168 | 6,201 | ||
| Non-GAAP net income attributable to the Company | 65,154 | 100,208 | 14,393 | 181,969 | 335,338 | 48,169 | ||
| Net income attributable to ordinary shareholders | 54,901 | 89,698 | 12,883 | 50,544 | 292,170 | 41,968 | ||
| Share-based compensation expenses | 10,253 | 10,510 | 1,510 | 116,611 | 43,168 | 6,201 | ||
| Non-GAAP net income attributable to ordinary shareholders | 65,154 | 100,208 | 14,393 | 167,155 | 335,338 | 48,169 | ||
| Non-GAAP net income per ADS | ||||||||
| -Basic | 0.93 | 1.44 | 0.21 | 6.99 | 4.83 | 0.69 | ||
| -Diluted | 0.90 | 1.39 | 0.20 | 6.30 | 4.66 | 0.67 | ||
| Weighted average number of ADS used in calculating Non-GAAP net income per ADS | ||||||||
| -Basic | 69,266,667 | 69,644,780 | 69,644,780 | 23,923,678 | 69,385,502 | 69,385,502 | ||
| -Diluted | 72,122,943 | 72,117,474 | 72,117,474 | 26,530,260 | 71,951,859 | 71,951,859 | ||
| Non-GAAP net income per ordinary share | ||||||||
| -Basic | 0.31 | 0.48 | 0.07 | 2.33 | 1.61 | 0.23 | ||
| -Diluted | 0.30 | 0.46 | 0.07 | 2.10 | 1.55 | 0.22 | ||
| Weighted average number of ordinary shares used in calculating Non-GAAP net income per share | ||||||||
| -Basic | 207,800,000 | 208,934,340 | 208,934,340 | 71,771,033 | 208,156,507 | 208,156,507 | ||
| -Diluted | 216,368,830 | 216,352,423 | 216,352,423 | 79,590,780 | 215,855,577 | 215,855,577 | ||
Note: The non-GAAP adjustments does not have any tax impact as share-based compensation expenses are non-deductible for income tax purpose.
Source: Viomi Technology Co., Ltd