First Quarter 2020 Financial and Operating Highlights
- Net revenues were
RMB765.5 million (US$108.1 million ), representing an increase of 13.2% from the first quarter of 2019. - Gross margin was 18.8%.
- Net income was
RMB17.8 million (US$2.5 million ), compared toRMB41.3 million for the first quarter of 2019. - Non-GAAP net income1 was
RMB31.4 million (US$4.4 million ), compared toRMB53.1 million for the first quarter of 2019. - Number of household users reached more than 3.7 million, compared to approximately 3.2 million as of the end of 2019 and approximately 2.0 million as of the end of the first quarter of 2019.
- Percentage of household users with at least two connected products reached 18.4%, compared to 17.9% as of the end of 2019 and 15.2% as of the end of the first quarter of 2019.
- Number of
Viomi offline experience stores was approximately 1,500, compared to approximately 1,700 as of the end of 2019.
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.
“Despite challenging industry conditions and ongoing macro uncertainties as a result of the COVID-19 outbreak, we successfully delivered better-than-expected results in the first quarter of 2020,” said Mr.
“Since the start of the second quarter, our business and supply chain operations have largely returned back to normal. In addition, we have seen meaningful signs of an overall industry recovery and we have accelerated the execution of our growth strategy for this year. Last week, we hosted our virtual 5G IoT Strategy and 2020 New Product Launch Event, where we presented our vision and product strategy for the imminent 5G + IoT era. The centerpiece of the event was the introduction of our state-of-the-art 21Face Interactive Smart Screen (TV). Equipped with industry-leading specifications, innovative motion-control capabilities and rich content offerings, this product will complete our vision for the fully-integrated and screen-filled IoT @ Home lifestyle experience. In addition, we announced a series of exciting next-generation products, including new lines of water purifiers, 21Face large-screen refrigerators, washing machines, various smart kitchen products and smart devices, together with new online content offerings and partnerships to enhance our user engagement. Moreover, we are expanding our premium AI-centric ‘coKiing’ brand with introductions of additional product categories across full home scenarios, further diversifying our brand and our consumer market. We expect these key initiatives, built upon our successes over the past several years, to bring the Viomi brand to the forefront and the standard-bearer of 5G + IoT for the home environment,”
“Looking ahead in 2020 and beyond, we will adhere to dynamic and prudent business practices while maintaining stable expansion under our 5G + IoT strategic framework. We are fully committed to and confident in achieving our ‘3511’ long-term objectives, our roadmap to becoming a large-scale, high-tech leader in the IoT @ Home space,” concluded
“We achieved a solid double-digit increase in net revenues, exceeding our previous guidance, despite the adverse industry conditions in the first quarter. This can be largely attributed to our diversified business, product and channel mix as well as our ever-increasing brand awareness across sales channels and among end-consumers. We also continued to sustain a healthy level of profitability, having implemented a number of stringent cost control measures to offset the adverse industry-wide impacts of COVID-19, while maintaining our commitment to research and development. The Company’s balance sheet remained strong, with approximately
“While uncertainties remain, we believe our financial strength and operational flexibility will position us well to capture the opportunities ahead, as the industry and broader economy continue to recover,”
First Quarter 2020 Financial Results
Net revenues were
IoT-enabled smart home products. Revenues from IoT-enabled smart home products increased by 8.0% to
- Smart water purification systems. Revenues from smart water purification systems decreased by 10.0% to
RMB108.0 million (US$15.3 million ) fromRMB120.0 million for the first quarter of 2019. The decline was primarily due to decreases in average selling prices, despite a double-digit year-on-year growth in sales volumes.
- Smart kitchen and other smart products. Revenues from smart kitchen and other smart products increased by 13.6% to
RMB434.7 million (US$61.4 million ) fromRMB382.5 million for the first quarter of 2019. The growth was primarily driven by the continued successful rollout of certain new products, in particular the Xiaomi-branded sweeper robots, which offset the broader industry-wide impacts of COVID-19.
Consumable products. Revenues from consumable products increased by 35.0% to
Value-added businesses. Revenues from value-added businesses increased by 25.6% to
Cost of revenues increased by 27.7% to
Gross profit was
Total operating expenses decreased by 12.4% to
Research and development expenses increased by 62.0% to
Selling and marketing expenses decreased by 35.1% to
General and administrative expenses decreased by 39.5% 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
As of
Outlook
For the second quarter of 2020, the Company currently expects:
- Net revenues to be between
RMB1.25 billion andRMB1.28 billion , representing a year-over-year growth of approximately 7.7% to 10.3%.
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 8:00 a.m. Eastern Time on Tuesday, May 26, 2020 (8:00 p.m. Beijing Time on May 26, 2020) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:
US (Toll Free): | +1-888-346-8982 |
International: | +1-412-902-4272 |
Mainland |
400-120-1203 |
800-905-945 | |
+852-3018-4992 | |
Conference ID: | 10144139 |
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: | 10144139 |
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, 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: +86-21-6039-8363
E-mail: viomi@tpg-ir.com
In
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 |
|||||
2019 | 2020 | 2020 | ||||
RMB | RMB | US$ | ||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | 972,438 | 445,860 | 62,967 | |||
Restricted cash | 30,567 | - | - | |||
Short-term deposits | 60,000 | 142,994 | 20,195 | |||
Short-term investments | 316,201 | 603,278 | 85,199 | |||
Accounts and notes receivable from third parties (net of allowance of |
316,189 | 279,628 | 39,491 | |||
Accounts receivable from a related party (net of allowance of nil and |
707,947 | 317,299 | 44,811 | |||
Other receivables from related parties (net of allowance of nil and |
23,944 | 38,264 | 5,404 | |||
Inventories | 418,015 | 371,120 | 52,413 | |||
Prepaid expenses and other current assets | 62,314 | 94,172 | 13,300 | |||
Total current assets | 2,907,615 | 2,292,615 | 323,780 | |||
Non-current assets | ||||||
Prepaid expenses and other non-current assets | 11,170 | 11,354 | 1,603 | |||
Property, plant and equipment, net | 67,293 | 61,712 | 8,715 | |||
Deferred tax assets | 12,276 | 13,896 | 1,962 | |||
Intangible assets, net | 4,357 | 5,578 | 788 | |||
Right-of-use assets, net | 19,762 | 18,893 | 2,668 | |||
Long-term deposits | - | 60,000 | 8,474 | |||
Total non-current assets | 114,858 | 171,433 | 24,210 | |||
Total assets | 3,022,473 | 2,464,048 | 347,990 | |||
Liabilities and shareholders’ equity | ||||||
Current liabilities | ||||||
Accounts and notes payable | 1,043,159 | 742,729 | 104,893 | |||
Advances from customers | 103,150 | 40,778 | 5,759 | |||
Amount due to related parties | 25,106 | 4,737 | 669 | |||
Accrued expenses and other liabilities | 325,042 | 208,005 | 29,376 | |||
Short-term borrowing | 95,868 | - | - | |||
Income tax payables | 33,522 | 31,035 | 4,383 | |||
Lease liabilities due within one year | 6,993 | 6,643 | 938 | |||
Total current liabilities | 1,632,840 | 1,033,927 | 146,018 | |||
Non-current liabilities | ||||||
Accrued expenses and other liabilities | 1,795 | 1,725 | 244 | |||
Lease liabilities | 13,391 | 12,815 | 1,810 | |||
Total non-current liabilities | 15,186 | 14,540 | 2,054 | |||
Total liabilities | 1,648,026 | 1,048,467 | 148,072 | |||
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 |
||||||
2019 | 2020 | 2020 | |||||
RMB | RMB | US$ | |||||
Shareholders’ equity | |||||||
Class A Ordinary Shares ( |
6 | 6 | 1 | ||||
Class B Ordinary Shares ( |
6 | 6 | 1 | ||||
Additional paid-in capital | 1,192,332 | 1,206,876 | 170,443 | ||||
Retained earnings | 195,596 | 211,029 | 29,803 | ||||
Accumulated other comprehensive loss | (19,145) | (7,831) | (1,106) | ||||
Total equity attributable to shareholders of the Company | 1,368,795 | 1,410,086 | 199,142 | ||||
Non-controlling interests | 5,652 | 5,495 | 776 | ||||
Total shareholders’ equity | 1,374,447 | 1,415,581 | 199,918 | ||||
Total liabilities and shareholders’ equity | 3,022,473 | 2,464,048 | 347,990 |
Note: On
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, 2019 | March 31, 2020 | March 31, 2020 | |||||
RMB | RMB | US$ | |||||
Net revenues: | |||||||
A related party | 251,880 | 404,979 | 57,194 | ||||
Third parties | 424,329 | 360,527 | 50,916 | ||||
Total net revenues | 676,209 | 765,506 | 108,110 | ||||
Cost of revenues (including |
(486,787 | ) | (621,540 | ) | (87,778 | ) | |
Gross profit | 189,422 | 143,966 | 20,332 | ||||
Operating expenses(1) | |||||||
Research and development expenses (including nil and |
(36,572 | ) | (59,261 | ) | (8,369 | ) | |
Selling and marketing expenses (including |
(100,948 | ) | (65,470 | ) | (9,246 | ) | |
General and administrative expenses | (15,624 | ) | (9,458 | ) | (1,336 | ) | |
Total operating expenses | (153,144 | ) | (134,189 | ) | (18,951 | ) | |
Other income | 812 | 2,741 | 387 | ||||
Income from operations | 37,090 | 12,518 | 1,768 | ||||
Interest income and short-term investment income | 9,707 | 5,336 | 754 | ||||
Other non-operating income, net | 431 | 90 | 13 | ||||
Income before income tax expenses | 47,228 | 17,944 | 2,535 | ||||
Income tax expenses | (5,900 | ) | (126 | ) | (18 | ) | |
Net income | 41,328 | 17,818 | 2,517 | ||||
Less: Net income (loss) attributable to the non-controlling interest shareholder | 138 | (157 | ) | (22 | ) | ||
Net income attributable to the Company | 41,190 | 17,975 | 2,539 | ||||
Net income attributable to ordinary shareholders of the Company | 41,190 | 17,975 | 2,539 | ||||
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, 2019 | March 31, 2020 | March 31, 2020 | |||
RMB | RMB | US$ | |||
Net income attributable to the Company | 41,190 | 17,975 | 2,539 | ||
Other comprehensive (loss) income, net of tax | |||||
Foreign currency translation adjustment | (14,083 | ) | 11,314 | 1,598 | |
Total comprehensive income attributable to the Company | 27,107 | 29,289 | 4,137 | ||
Net income per ADS* | |||||
-Basic | 0.60 | 0.26 | 0.04 | ||
-Diluted | 0.57 | 0.25 | 0.04 | ||
Weighted average number of ADS used in calculating net income per ADS | |||||
-Basic | 69,266,667 | 69,768,219 | 69,768,219 | ||
-Diluted | 71,720,196 | 71,943,488 | 71,943,488 | ||
Net income per share attributable to ordinary shareholders of the Company | |||||
-Basic | 0.20 | 0.09 | 0.01 | ||
-Diluted | 0.19 | 0.08 | 0.01 | ||
Weighted average number of ordinary shares used in calculating net income per share | |||||
-Basic | 207,800,000 | 209,304,658 | 209,304,658 | ||
-Diluted | 215,160,587 | 215,830,463 | 215,830,463 | ||
*Each ADS represents 3 ordinary shares. | |||||
(1) Share-based compensation was allocated in operating expenses as follows: |
Three Months Ended | ||||
March 31, 2019 | March 31, 2020 | March 31, 2020 | ||
RMB | RMB | US$ | ||
General and administrative expenses | 1,871 | 2,376 | 336 | |
Research and development expenses | 6,106 | 8,240 | 1,164 | |
Selling and marketing expenses | 3,817 | 2,970 | 419 |
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, 2019 | March 31, 2020 | March 31, 2020 | ||
RMB | RMB | US$ | ||
Income from operations | 37,090 | 12,518 | 1,768 | |
Share-based compensation expenses | 11,794 | 13,586 | 1,919 | |
Non-GAAP operating income | 48,884 | 26,104 | 3,687 | |
Net income | 41,328 | 17,818 | 2,517 | |
Share-based compensation expenses | 11,794 | 13,586 | 1,919 | |
Non-GAAP net income | 53,122 | 31,404 | 4,436 | |
Net income attributable to the Company | 41,190 | 17,975 | 2,539 | |
Share-based compensation expenses | 11,794 | 13,586 | 1,919 | |
Non-GAAP net income attributable to the Company | 52,984 | 31,561 | 4,458 | |
Net income attributable to ordinary shareholders | 41,190 | 17,975 | 2,539 | |
Share-based compensation expenses | 11,794 | 13,586 | 1,919 | |
Non-GAAP net income attributable to ordinary shareholders | 52,984 | 31,561 | 4,458 | |
Non-GAAP net income per ADS | ||||
-Basic | 0.75 | 0.45 | 0.06 | |
-Diluted | 0.75 | 0.44 | 0.06 | |
Weighted average number of ADS used in calculating Non-GAAP net income per ADS | ||||
-Basic | 69,266,667 | 69,768,219 | 69,768,219 | |
-Diluted | 71,720,196 | 71,943,488 | 71,943,488 | |
Non-GAAP net income per ordinary share | ||||
-Basic | 0.25 | 0.15 | 0.02 | |
-Diluted | 0.25 | 0.15 | 0.02 | |
Weighted average number of ordinary shares used in calculating Non-GAAP net income per share | ||||
-Basic | 207,800,000 | 209,304,658 | 209,304,658 | |
-Diluted | 215,160,587 | 215,830,463 | 215,830,463 |
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