UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of March 2022

 

 

Commission File Number: 001-38649

 

 

 

Viomi Technology Co., Ltd

 

Wansheng Square, Rm 1302 Tower C, Xingang East Road, Haizhu District

Guangzhou, Guangdong, 510220

People’s Republic of China
(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 

 

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Exhibit Index

 

Exhibit 99.1—Press Release

 

 

 

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Date: March 28, 2022

 

 

 

Exhibit 99.1

 

Viomi Technology Co., Ltd Reports Fourth Quarter and Full Year 2021 Unaudited Financial Results

 

Fourth quarter net revenues exceeded the previous guidance

Fourth quarter gross margin continued to improve, reaching 25.6% from 23.5% a year ago

 

GUANGZHOU, China, March 28, 2022 -- Viomi Technology Co., Ltd (“Viomi” or the “Company”) (NASDAQ: VIOT), a leading IoT @ Home technology company in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2021.

 

Fourth Quarter 2021 Financial and Operating Highlights

 

 

Full Year 2021 Financial and Operating Highlights

 

 

“In the past few months, we continued to enhance our one-stop IoT home solutions, with an increasing sales contribution from our high-end products. Thanks to our ongoing product portfolio adjustments, we achieved a gross margin of 25.6% for the fourth quarter, maintaining a consecutive year-over-year growth since the fourth quarter of 2020 and once again demonstrating the strengths of our product lineup and growing brand recognition,” said Mr. Xiaoping Chen, Founder and Chief Executive Officer of Viomi.

 

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“At our strategic new product launch event in March 2022, we introduced our upgraded one-stop IoT home solution, ‘1=N44,’ which includes (i) the comprehensive product portfolio of smart home appliances and home devices across home scenarios; (ii) four major smart home capabilities supported by HomeMap, our whole-home visualization technology, including automatic networking, active intelligence, spatial awareness and natural interactions; and (iii) additional four services for our users, such as smart home solution design, OTA upgrades, a membership system and value-added services. Furthermore, we enriched our bundled smart home solution offerings with packages designed for various types of households, including our RMB60,000 – RMB80,000 Super packages for large apartments worth over one million RMB, our RMB200,000 Space packages for penthouses, and our RMB300,000 Royal series for houses valued at over one hundred million RMB, which we believe can collectively deliver a premium customized AI experience for the high-end market.”

 

“As a pioneer in one-stop IoT home solutions, we view our products as the carrier that can bring an upgraded whole-home IoT experience and we optimize product functionalities through software and AI application. At the March event we also introduced a series of high-end products with our currently most advanced AI technology, underscoring our ‘trending technology’ branding positioning. These new products include our all-space AI air conditioner Space Pro, which utilizes active manganese to help remove formaldehyde; Boss, our AI business refrigerator equipped with 3D somatosensory sensors; Super 2, our 2000G large-flux water purifier, which uses ultra-micro bubbles to remove agricultural residues; and a new series of smart home devices such as HomePad Plus, our AI screen-based control interface and Cyber 2T, our smart lock with 3D facial recognition and video functions. We also launched several new products under our premium brand coKiing, including the Royal Pro series of double-screen refrigerators and AI twin-tub washing machines, as well as the Royal series of AI dishwashers featuring ionic sterilization and AI laser interactive smart screens.”

 

“Beyond these new products, we also continued to execute our ‘larger store, better merchant’ channel strategy. We are opening additional immersive offline stores encompassing over 200 or 300 square meters in tier-one, new tier-one and tier-two cities to enhance our ‘trending technology’ branding positioning as well as provide our customers with a more comprehensive, premium smart home experience,” Mr. Chen added.

 

“Moreover, we optimized our product portfolio on new content channels and continued to improve our brand marketing during the quarter. Following the establishment of a dedicated content marketing and sales team for new channels such as Pinduoduo and Douyin last year, we have continually refined our product categories on these channels by adding products with mid- and high-end positioning or high gross margins. We also continued to strengthen our ‘trending technology’ brand awareness and increase our exposure on these new channels through key opinion leaders (“KOL”) live streaming and recommendations, as well as other marketing activities.”

 

“In addition, we also had some progresses on our overseas market business. In the fourth quarter, we entered into markets in Singapore, Germany, Italy and other countries. Further, our cooperation with international sales agents has been fruitful, leading to new partnerships with large-scale agents in northern Europe and Germany, among others. We also extended our self-operated model to new overseas markets. Besides the U.S. Amazon store we launched last August, we just opened a self-operated Amazon store in Italy in March 2022, with additional self-operated European Amazon stores to come into service in the coming months.”

 

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Mr. Chen concluded, “By strategically shifting from ‘selling products’ to ‘selling solutions,’ we believe we have pioneered a new business model in the smart home industry while improving our smart products, IoT capabilities and services for our one-stop IoT home solutions. We have also strengthened our ‘trending technology’ branding as we enter the high-end market. Looking into this year, we will increase our investments in marketing and channels to promote our strategic products and brand recognition. Meanwhile, we will also continue to optimize our product lines and upgrade our technology, achieving healthy, long-term growth.”

 

Fourth Quarter 2021 Financial Results

 

REVENUE

 

Net revenues were RMB1,332.8 million (US$209.1 million), compared to RMB1,889.0 million for the fourth quarter of 2020. Net revenues exceeded the Company’s previous guidance. The year-over-year decrease was mainly due to (i) the continued significant decrease in sales of Xiaomi-branded sweeper robots; (ii) product portfolio adjustments for margin expansion in other categories; and (iii) the overall weaker consumer demands for certain categories.

 

 

 

 

 

GROSS PROFIT

 

Gross profit was RMB341.5 million (US$53.6 million), compared to RMB443.8 million for the fourth quarter of 2020. Gross margin increased to 25.6% from 23.5% for the fourth quarter of 2020, primarily driven by the Company’s continued efforts to shift the business and product mix toward higher gross margin products.

 

 

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OPERATING EXPENSES

 

Total operating expenses increased by 2.7% to RMB340.7 million (US$53.5 million) from RMB331.8 million for the fourth quarter of 2020, primarily due to the increase in research and development expenses and general and administrative expenses.

 

Research and development expenses increased by 5.1% to RMB97.8 million (US$15.3 million) from RMB93.1 million for the fourth quarter of 2020, mainly due to the increase in research and development experts and related salaries and expenses.

 

Selling and marketing expenses decreased by 1.2% to RMB214.8 million (US$33.7 million) from RMB217.4 million for the fourth quarter of 2020.

 

General and administrative expenses increased by 31.4% to RMB28.0 million (US$4.4 million), compared to RMB21.3 million for the fourth quarter of 2020, primarily due to the increase in related personnel salaries and expenses.

 

INCOME FROM OPERATIONS

 

Income from operations was RMB9.1 million (US$1.4 million), compared to income from operations of RMB126.3 million for the fourth quarter of 2020.

 

Non-GAAP operating income², which excludes the impact of share-based compensation expenses, was RMB19.9 million (US$3.1 million), compared to non-GAAP income from operations of RMB131.2 million for the fourth quarter of 2020.

 

NET INCOME

 

Net income attributable to ordinary shareholders of the Company was RMB22.7 million (US$3.6 million), compared to net income attributable to ordinary shareholders of the Company of RMB110.6 million for the fourth quarter of 2020.

 

Non-GAAP net income attributable to ordinary shareholders of the Company was RMB33.5 million (US$5.3 million), compared to non-GAAP net income attributable to ordinary shareholders of the Company of RMB115.5 million for the fourth quarter of 2020.

 

BALANCE SHEET

 

As of December 31, 2021, the Company had cash and cash equivalents of RMB587.0 million (US$92.1 million), restricted cash of RMB35.8 million (US$5.6 million), short-term deposits of nil and short-term investments of RMB828.9 million (US$130.1 million), compared to RMB504.1 million, RMB70.6 million, nil and RMB696.1 million, respectively, as of December 31, 2020.

 

 

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Full Year 2021 Financial Results

 

REVENUE

 

Net revenues were RMB5,303.8 million (US$832.3 million), compared to RMB5,825.6 million for 2020.

 

 

 

 

 

GROSS PROFIT

 

Gross profit was RMB1,198.1 million (US$188.0 million), compared to RMB1,083.0 million for 2020. Gross margin improved to 22.6% from 18.6% a year ago.

 

OPERATING EXPENSES

 

Total operating expenses increased by 24.6% to RMB1,160.5 million (US$182.1 million) from RMB931.8 million for 2020.

 

Research and development expenses increased by 17.4% to RMB311.8 million (US$48.9 million) from RMB265.7 million for 2020.

 

Selling and marketing expenses increased by 25.8% to RMB751.0 million (US$117.9 million) from RMB597.2 million for 2020.

 

General and administrative expenses increased by 41.8% to RMB97.7 million (US$15.3 million), compared to RMB68.9 million for 2020.

 

INCOME FROM OPERATIONS

 

Income from operations was RMB64.7 million (US$10.1 million), compared to income from operations of RMB184.0 million for 2020.

 

Non-GAAP operating income, which excludes the impact of share-based compensation expenses, was RMB112.1 million (US$17.6 million), compared to non-GAAP income from operations of RMB256.2 million for 2020.

 

 

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NET INCOME

 

Net income attributable to ordinary shareholders of the Company was RMB88.6 million (US$13.9 million), compared to net income attributable to ordinary shareholders of the Company of RMB173.3 million for 2020.

 

Non-GAAP net income attributable to ordinary shareholders of the Company was RMB136.0 million (US$21.3 million), compared to non-GAAP net income attributable to ordinary shareholders of the Company of RMB245.5 million for 2020.

 

OUTLOOK

 

For the first quarter of 2022, the Company currently expects:

 

 

The Company estimates that the year-over-year change in revenue will be mainly due to the high base effect of Xiaomi-branded sweeper robot business for the first quarter of 2021, which the Company has then subsequently scaled back that business, as well as the overseas market impact in the first quarter of 2022.

 

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, all of which are subject to change.

 

Conference Call

 

The Company’s management will host a conference call at 8:00 a.m. Eastern Time on Monday, March 28, 2022 (8:00 p.m. Beijing/Hong Kong time on March 28, 2022) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

 

 

A telephone replay will be available one hour after the call until April 4, 2022 by dialing:

 

 

Additionally, a live and archived webcast of the conference call will be available at http://ir.viomi.com.

 

 

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About Viomi Technology

 

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 share and non-GAAP basic and diluted net income per American depositary share (“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. Non-GAAP basic and diluted net income per ordinary share is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share. Non-GAAP basic and diluted net income per ADS is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ADS used in the calculation of non-GAAP basic and diluted net income per ADS. 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. Reconciliations of the Company’s non-GAAP financial measures to the most directly comparable GAAP measures are included at the end of this press release.

 

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Exchange Rate

 

The Company’s business is primarily conducted in China and the significant majority of revenues generated are denominated in Renminbi (“RMB”). This announcement contains currency conversions of RMB amounts into U.S. dollars (“US$”) solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB6.3726 to US$1.00, the effective noon buying rate for December 30, 2021 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on for December 31, 2021, or at any other rate.

 

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. Viomi may also make written or oral forward-looking statements in its periodic reports to the United States Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to Fourth parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company’s growth strategies; the cooperation with Xiaomi, the recognition of the Company’s brand; trends and competition in global IoT-enabled smart home market; development and commercialization of new products, services and technologies; governmental policies and relevant regulatory environment relating to the Company’s industry and/or aspects of the business operations and general economic conditions in China and around the globe, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

 

For investor and media inquiries, please contact:

 

In China:

 

Viomi Technology Co., Ltd

Cecilia Li

E-mail: ir@viomi.com.cn

 

The Piacente Group, Inc.

Emilie Wu

Tel: +86-21-6039-8363

 

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E-mail: viomi@tpg-ir.com

 

In the United States:

 

The Piacente Group, Inc.  

Brandi Piacente

Tel: +1-212-481-2050

E-mail: viomi@tpg-ir.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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VIOMI TECHNOLOGY CO., LTD

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except shares, ADS, per share and per ADS data)

 

 

 

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VIOMI TECHNOLOGY CO., LTD

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(All amounts in thousands, except shares, ADS, per share and per ADS data)

 

 

 

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VIOMI TECHNOLOGY CO., LTD

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

(All amounts in thousands, except shares, ADS, per share and per ADS data)

 

 

 

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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)

 

 

 

 

 

 

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VIOMI TECHNOLOGY CO., LTD

Reconciliations of GAAP and Non-GAAP Results

(All amounts in thousands, except shares, ADS, per share and per ADS data)

 

 

Note: The non-GAAP adjustments does not have any tax impact as share-based compensation expenses are non-deductible for income tax purpose.