The Board Has Authorized a Share Repurchase Program
HANGZHOU, China, March 8, 2023 /PRNewswire/ -- BEST Inc. (NYSE: BEST) ("BEST" or the "Company"), a leading integrated smart supply chain solutions and logistics services provider in China and Southeast Asia, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2022. The Company also announced that its board of directors has authorized a share repurchase program, under which the Company may repurchase up to US$20 million worth of its outstanding American Depositary Shares over the next 12 months.
Johnny Chou, Founder, Chairman and CEO of BEST, commented, "2022 was a challenging year. The COVID-19 pandemic and its related controls seriously impacted general economy, and was particularly hard for the logistic industry. However, under such severe challenges, we prevailed. In the fourth quarter of 2022, both BEST Freight and BEST Supply Chain Management have significantly improved their gross margins and narrowed their losses. At the same time, BEST Global began to show promising operating trends.
After lifting of COVID pandemic-related controls, we have seen a rapid recovery in general economy and our multiple business lines. We are confident to deliver a strong growth and financial results in 2023. In addition, our Board has authorized an up-to-$20M share repurchase program."
"During 2022, Best Freight focused heavily on digital transformation, cost reductions and quality improvement. As a result, our operating efficiency and service quality have significantly improved. In the fourth quarter, Freight's gross margin grew by 10.4 percentage points and its net loss was narrowed by 69.3% year over year."
"For BEST Supply Chain Management, its strong technical know-how and superb service capabilities helped us weather the storm. Despite COVID-related restrictions throughout the year, BEST Supply Chain Management went above and beyond to make sure we provided our customers with top quality service. As a result, we were rewarded with additional business. Supply Chain Management has added 64 new key account customers in the second half of 2022 and its distribution volume and revenue increased in the fourth quarter by 82.1% and 2.7%, respectively, and gross margin increased to 4.4%, from negative 1.9%, year over year."
"For BEST Global, with the lifting of COVID-related controls, we quickly adjusted our strategy, and realigned our organization in response to the evolving Southeast Asia market. We greatly elevated our organization's capabilities, widening our network coverage and significantly improved our service quality. We also expanded our coverage of small- and medium-sized enterprise customers and the revenue contribution from those customers grew by 13 percentage points to 40.2% in the fourth quarter of 2022, compared with the first quarter of 2022. In addition, we are accelerating our B2B2C and cross border business to provide additional product offerings. We believe this strategic direction will usher in Global's fast recovery and prompt growth for a much improved gross margin and better cash flow in 2023."
"We finished 2022 with a much more resilient, streamlined business infrastructure and improved operating efficiency. Our strengths in technology, domestic and global supply chain management as well as logistics services place us in a strong position to deliver a strong profitable growth in 2023 and beyond." concluded Mr. Chou.
Gloria Fan, BEST's Chief Financial Officer, added, "While our revenue for the fourth quarter was dampened by the COVID-19 pandemic, the cost control measures we enacted significantly narrowed our Group non-GAAP net loss by 52.4% year over year. We are actively managing our cash and our balance sheet remains healthy. At the end of 2022, we had cash, cash equivalents, restricted cash and short-term investments of RMB3.2 billion, after we used RMB1.4 billion during 2022 to repurchase our Convertible Senior Notes due 2024. Our overarching goal is to achieve ongoing sustainable and profitable growth. In 2023, we expect Freight and Supply Chain Management to become profitable in the second quarter and generate positive cash flow and profitable growth throughout the year, and BEST Global to see profitability in certain countries."
FINANCIAL HIGHLIGHTS ([1])
For the Fourth Quarter Ended December 31, 2022:([2])
For the Fiscal Year Ended December 31, 2022:
BUSINESS HIGHLIGHTS([11])
BEST Freight – In the fourth quarter of 2022, Freight's volume decreased by 7.6% year over year, and revenue decreased by 32.0% year over year to approximately RMB1.3 billion. The decrease in Freight revenue was primarily due to the wind-down of UCargo business unit. The Company remained focused on developing its e-commerce related business, which contributed 21.2% of total volume in the fourth quarter of 2022. Freight's gross margin was negative 1.3%, representing a 10.4 percentage points improvement from the same period of 2021 as we continued to reduce operating expenses and improve efficiency. For the full year of 2022, Freight's volume decreased by 6.1% year over year to 8.7 million tonnes.
BEST UCargo's operations and financial results are now consolidated with BEST Freight.
BEST Supply Chain Management – In the fourth quarter of 2022, total revenue for Supply Chain Management increased by 2.7% to RMB500.6 million year over year, and gross margin improved by 6.3 percentage points to 4.4%, narrowing Supply Chain Management's net loss by RMB60.4 million, or 81.3%. Its distribution volume increased by 82.1% in the fourth quarter, while the total number of orders fulfilled by Cloud OFCs decreased by 15.6% year over year. For the full year of 2022, the distribution volume increased by 53.6% year over year, while the total number of orders fulfilled by Cloud OFCs decreased by 16.6%. BEST Supply Chain Management's gross margin for 2022 improved by 2.1 percentage points to 6.1%.
BEST Global – The market in Southeast Asia remained challenging in the fourth quarter of 2022. In the wake of relaxed COVID-19 pandemic control measures in the region, there was a shift in consumer consumption activities from online to offline, which negatively impacted the e-commerce logistics industry. As a result, Global's parcel volume decreased by 41.8% year over year to 25.4 million in the fourth quarter of 2022. For the full year of 2022, Global's parcel volume decreased by 19.1% year over year to 121.6 million.
Others
As part of its Strategic Refocusing Program, the Company substantially completed its wind down of the Capital business line in the fourth quarter of 2022.
Key Operational Metrics
Three Months Ended | % Change YOY | |||||||||
December 31, | December 31, | December 31, 2022 | 2021 vs | 2022 vs | ||||||
Freight Volume (Tonne in '000) | 2,623 | 2,408 | 2,226 | (8.2 %) | (7.6 %) | |||||
Global Parcel Volume in | 27,891 | 43,707 | 25,421 | 56.7 % | (41.8 %) | |||||
Fiscal Year Ended | % Change YoY | ||||||||
December 31, | December 31, | December 31, 2022 | 2021 vs | 2022 vs | |||||
Freight Volume (Tonne in '000) | 8,392 | 9,218 | 8,659 | 9.8 % | (6.1 %) | ||||
Global Parcel Volume in | 73,585 | 150,392 | 121,637 | 104.4 % | (19.1 %) | ||||
FINANCIAL RESULTS ([12])
For the Fourth Quarter Ended December 31, 2022:
Revenue
The following table sets forth a breakdown of revenue by business segment for the periods indicated.
Table 1 – Breakdown of Revenue by Business Segment | ||||||||
Three Months Ended | ||||||||
December 31, 2021 | December 31, 2022 | |||||||
(In '000, except for %) | RMB | % of | RMB | US$ | % of | % Change | ||
Total Freight | 1,854,018 | 68.1 % | 1,261,196 | 182,856 | 63.7 % | -32.0 % | ||
-Freight | 1,503,995 | 55.3 % | 1,260,244 | 182,718 | 63.6 % | -16.2 % | ||
-Legacy UCargo | 350,023 | 12.8 % | 952 | 138 | 0.1 % | -99.7 % | ||
Supply Chain | 487,337 | 17.9 % | 500,602 | 72,580 | 25.3 % | 2.7 % | ||
Global | 330,564 | 12.1 % | 195,680 | 28,371 | 9.9 % | -40.8 % | ||
Others([13]) | 52,935 | 1.9 % | 23,917 | 3,468 | 1.1 % | -54.8 % | ||
Total Revenue | 2,724,854 | 100.0 % | 1,981,395 | 287,275 | 100.0 % | -27.3 % | ||
Cost of Revenue
The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.
Table 2 – Breakdown of Cost of Revenue by Business Segment | ||||||||
Three Months Ended | % of Revenue YOY | |||||||
December 31, 2021 | December 31, 2022 | |||||||
(In '000, except for %) | RMB | % of | RMB | US$ | % of | |||
Freight | (2,070,840) | 111.7 % | (1,277,026) | (185,151) | 101.3 % | -10.4 % | ||
Supply Chain | (496,353) | 101.9 % | (478,511) | (69,378) | 95.6 % | -6.3 % | ||
Global | (346,392) | 104.8 % | (264,014) | (38,278) | 134.9 % | 30.1 % | ||
Others | (39,679) | 75.0 % | (20,321) | (2,946) | 85.0 % | 10.0 % | ||
Total Cost of Revenue | (2,953,264) | 108.4 % | (2,039,872) | (295,753) | 103.0 % | -5.4 % | ||
Gross loss was RMB58.5 million (US$8.5 million) in the fourth quarter of 2022, compared with a gross loss of RMB228.4 million in the fourth quarter of 2021; Gross Margin was negative 3.0%, compared with negative 8.4% in the fourth quarter of 2021.
Operating Expenses
Selling, General and Administrative ("SG&A") Expenses were RMB263.4 million (US$38.2 million), or 13.3% of revenue in the fourth quarter of 2022, compared with RMB354.8 million, or 13.0% of revenue in the same quarter of 2021. The decrease in the SG&A expenses was primarily due to reduced employee headcount.
Research and Development Expenses were RMB29.2 million (US$4.2 million), or 1.5% of revenue in the fourth quarter of 2022, compared with RMB50.3 million, or 1.8% of revenue in the fourth quarter of 2021, primarily due to reduced employee headcount.
Share-based Compensation ("SBC") Expenses included in the cost and expense items above were RMB15.6 million (US$2.3 million) in the fourth quarter of 2022, compared with RMB23.7 million in the same period of 2021. Of the total SBC expenses, RMB0.08 million (US$0.01 million) was allocated to cost of revenue, RMB0.7 million (US$0.1 million) was allocated to selling expenses, RMB13.6 million (US$2.0 million) was allocated to general and administrative expenses, and RMB1.2 million (US$0.2 million) was allocated to research and development expenses.
Net Loss and Non-GAAP Net Loss from continuing operations
Net Loss from continuing operations in the fourth quarter of 2022 was RMB365.8 million (US$53.0 million), compared with RMB734.1 million in the same period of 2021. Excluding SBC expenses and fair value change of equity investments, Non-GAAP Net Loss from continuing operations in the fourth quarter of 2022 was RMB338.0 million (US$49.0 million), compared with RMB710.4 million in the fourth quarter of 2021.
Diluted loss per ADS and Non-GAAP diluted loss per ADS from continuing operations
Diluted loss per ADS from continuing operations in the fourth quarter of 2022 was RMB4.49 (US$0.65), compared with a loss of RMB9.07 in the same period of 2021. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and fair value change of equity investments, Non-GAAP diluted loss per ADS from continuing operations in the fourth quarter of 2022 was RMB4.13 (US$0.60), compared with a loss of RMB8.77 in the fourth quarter of 2021. A reconciliation of non-GAAP diluted loss per ADS to diluted loss per ADS is included at the end of this results announcement.
Adjusted EBITDA and Adjusted EBITDA Margin from continuing operations
Adjusted EBITDA from continuing operations in the fourth quarter of 2022 was negative RMB296.9 million (US$43.0 million), compared with negative RMB635.2 million in the same period of 2021. Adjusted EBITDA Margin from continuing operations in the fourth quarter of 2022 was negative 15.0%, compared with negative 23.3% in the same period of 2021.
Capital Expenditures ("CAPEX")
CAPEX was RMB11.1 million (US$1.6 million) or 0.6% of total revenue in the fourth quarter of 2022, compared with CAPEX of RMB20.6 million, or 0.8% of total revenue in the same period of 2021.
Cash and Cash Equivalents, Restricted Cash and Short-term Investments
As of December 31, 2022, cash and cash equivalents, restricted cash and short-term investments were RMB3.2 billion (US$464.5 million), compared with RMB5.5 billion as of December 31, 2021. In 2022, the Company bought back approximately US$200 million (RMB1.4 billion) aggregate principal amount of its existing Convertible Senior Notes due 2024.
For the Fiscal Year Ended December 31, 2022:
Revenue
The following table sets forth a breakdown of revenue by business segment for the periods indicated.
Table 3 – Breakdown of Revenue by Business Segment | ||||||||
Fiscal Year Ended | ||||||||
December 31, 2021 | December 31, 2022 | |||||||
(In '000, except for %) | RMB | % of | RMB | US$ | % of | % Change | ||
Total Freight | 8,244,435 | 72.2 % | 4,888,278 | 708,734 | 63.2 % | -40.7 % | ||
-Freight | 5,435,354 | 47.6 % | 4,852,299 | 703,518 | 62.8 % | -10.7 % | ||
-Legacy UCargo | 2,809,081 | 24.6 % | 35,979 | 5,216 | 0.4 % | -98.7 % | ||
Supply Chain | 1,815,104 | 15.9 % | 1,822,075 | 264,176 | 23.5 % | 0.4 % | ||
Global | 1,193,855 | 10.4 % | 916,907 | 132,939 | 11.8 % | -23.2 % | ||
Others | 172,442 | 1.5 % | 116,812 | 16,936 | 1.5 % | -32.3 % | ||
Total Revenue | 11,425,836 | 100.0 % | 7,744,072 | 1,122,785 | 100.0 % | -32.2 % | ||
Cost of Revenue
The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.
Table 4 – Breakdown of Cost of Revenue by Business Segment | ||||||||
Fiscal Year Ended | % of Revenue YoY | |||||||
December 31, 2021 | December 31, 2022 | |||||||
(In '000, except for %) | RMB | % of | RMB | US$ | % of | |||
Freight | (8,506,738) | 103.2 % | (5,114,937) | (741,596) | 104.6 % | 1.4 % | ||
Supply Chain | (1,741,832) | 96.0 % | (1,711,818) | (248,190) | 93.9 % | -2.1 % | ||
Global | (1,258,511) | 105.4 % | (1,081,587) | (156,815) | 118.0 % | 12.6 % | ||
Others | (118,143) | 68.5 % | (99,288) | (14,395) | 85.0 % | 16.5 % | ||
Total Cost of Revenue | (11,625,224) | 101.7 % | (8,007,630) | (1,160,996) | 103.4 % | 1.7 % | ||
Gross loss was RMB263.6 million (US$38.2 million) in 2022, compared with a gross loss of RMB199.4 million in 2021; Gross Margin was negative 3.4%, compared with negative 1.7% in 2021.
Operating Expenses
Selling, General and Administrative ("SG&A") Expenses were RMB1,127.3 million (US$163.4 million), or 14.6% of revenue in 2022, compared with RMB1,141.7 million, or 10.0% of revenue in 2021 due to reduced employee headcount.
Research and Development Expenses were RMB144.2 million (US$20.9 million), or 1.9% of revenue in 2022, compared with RMB180.2 million, or 1.6% of revenue in 2021 due to reduced employee headcount.
Share-based Compensation ("SBC") Expenses included in the cost and expense items above were RMB72.1 million (US$10.5 million) in 2022, compared with RMB107.7 million in 2021. Of the total SBC expenses, RMB0.32 million (US$0.05 million) was allocated to cost of revenue, RMB3.5 million (US$0.5 million) was allocated to selling expenses, RMB63.3 million (US$9.2 million) was allocated to general and administrative expenses, and RMB5.0 million (US$0.7 million) was allocated to research and development expenses.
Net Loss and Non-GAAP Net Loss from continuing operations
Net Loss from continuing operations in 2022 was RMB1,464.8 million (US$212.4 million), compared with RMB1,263.9 million in 2021. Excluding SBC expenses and fair value change of equity investments, Non-GAAP Net Loss from continuing operations in 2022 was RMB1,380.4 million (US$200.1 million), compared with RMB1,214.8 million in 2021.
Diluted loss per ADS and Non-GAAP diluted loss per ADS from continuing operations
Diluted loss per ADS from continuing operations in 2022 was RMB18.17 (US$2.63), compared with a loss of RMB15.61 in 2021. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and fair value change of equity investments, Non-GAAP diluted loss per ADS from continuing operations in 2022 was RMB17.09 (US$2.48), compared with a loss of RMB14.98 in 2021. A reconciliation of non-GAAP diluted loss per ADS to diluted loss per ADS is included at the end of this results announcement.
Adjusted EBITDA and Adjusted EBITDA Margin from continuing operations
Adjusted EBITDA from continuing operations in 2022 was negative RMB1,181.8 million (US$171.3 million), compared with negative RMB927.2 million in 2021. Adjusted EBITDA Margin from continuing operations in 2022 was negative 15.3%, compared with negative 8.1% in 2021.
Capital Expenditures ("CAPEX")
CAPEX was RMB143.3 million (US$20.8 million) or 1.9% of total revenue in 2022, compared with CAPEX of RMB160.0 million, or 1.4% of total revenue in 2021.
SHARES OUTSTANDING
As of February 28, 2023, the Company had approximately 393.9 million ordinary shares outstanding([14]). Each American Depositary Share represents five (5) Class A ordinary shares.
FINANCIAL GUIDANCE
The Company confirms its guidance for total revenue between RMB 9.0 billion and RMB 9.5 billion for the full year of 2023.
This forecast reflects the Company's current and preliminary view based on its current business situation and market conditions, which are subject to change.
WEBCAST AND CONFERENCE CALL INFORMATION
The Company will hold a conference call at 8:00 pm U.S. Eastern Time on March 8, 2023 (9:00 am Beijing Time on March 9, 2023), to discuss its financial results and operating performance for the fourth quarter and fiscal year 2022.
Participants may access the call by dialing the following numbers:
United States : +1-888-317-6003
Hong Kong : 800-963976 or +852-5808-1995
Mainland China : 4001-206115
International : +1-412-317-6061
Participant Elite Entry Number : 1659917
A replay of the conference call will be accessible through March 15, 2023 by dialing the following numbers:
United States : +1-877-344-7529
International : +1-412-317-0088
Replay Access Code : 1608887
Please visit the Company's investor relations website to view the earnings release prior to the conference call. A live and archived webcast of the conference call and a corporate presentation will be available at the same site.
ABOUT BEST INC.
BEST Inc. (NYSE: BEST) is a leading integrated smart supply chain solutions and logistics services provider in China and Southeast Asia. Through its proprietary technology platform and extensive networks, BEST offers a comprehensive set of logistics and value-added services, including freight delivery, supply chain management and global logistics services. BEST's mission is to empower business and enrich life by leveraging technology and business model innovation to create a smarter, more efficient supply chain. For more information, please visit: http://www.best-inc.com/en/.
For investor and media inquiries, please contact:
BEST Inc.
Investor relations team
ir@best-inc.com
The Piacente Group, Inc.
Helen Wu
Tel: +86-10-6508-0677
E-mail: best@tpg-ir.com
The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: best@tpg-ir.com
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" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as BEST's strategic and operational plans, contain forward-looking statements. BEST may also make written or oral forward-looking statements in its periodic reports to the U.S. 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 third parties. Statements that are not historical facts, including statements about BEST'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: BEST's goals and strategies; BEST's future business development, results of operations and financial condition; BEST's ability to maintain and enhance its ecosystem; BEST's ability to compete effectively; BEST's ability to continue to innovate, meet evolving market trends, adapt to changing customer demands and maintain its culture of innovation; fluctuations in general economic and business conditions in China and other countries in which BEST operates, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in BEST'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 BEST does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
USE OF NON-GAAP FINANCIAL MEASURES
In evaluating its business, BEST considers and uses non-GAAP measures, such as non-GAAP net loss/income, non-GAAP net loss/income margin, adjusted EBITDA, adjusted EBITDA margin, EBITDA, and non-GAAP Diluted earnings/loss per ADS, as supplemental measures in the evaluation of the Company's operating results and in the Company's financial and operational decision-making. The Company believes these non-GAAP financial measures that help identify underlying trends in the Company's business that could otherwise be distorted by the effect of the expenses and gains that the Company includes in loss from operations and net loss. The Company believes that these non-GAAP financial measures provide useful information about its operating results, enhance the overall understanding of its 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. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" in the results announcement.
The non-GAAP financial measures are provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the Company's current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S. GAAP results. In addition, the Company's calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.
Summary of Unaudited Condensed Consolidated Income Statements (In Thousands) | ||||||||
Three Months Ended December 31, | Fiscal Year Ended December 31, | |||||||
2021 | 2022 | 2021 | 2022 | |||||
RMB | RMB | US$ | RMB | RMB | US$ | |||
Revenue | ||||||||
Freight | 1,854,018 | 1,261,196 | 182,856 | 8,244,435 | 4,888,278 | 708,734 | ||
-Freight | 1,503,995 | 1,260,244 | 182,718 | 5,435,354 | 4852,299 | 705,696 | ||
-Legacy UCargo | 350,023 | 952 | 138 | 2,809,081 | 35,979 | 3,038 | ||
Supply Chain Management | 487,337 | 500,602 | 72,580 | 1,815,104 | 1,822,075 | 264,176 | ||
Global | 330,564 | 195,680 | 28,371 | 1,193,855 | 916,907 | 132,939 | ||
Others | 52,935 | 23,917 | 3,468 | 172,442 | 116,812 | 16,936 | ||
Total Revenue | 2,724,854 | 1,981,395 | 287,275 | 11,425,836 | 7,744,072 | 1,122,785 | ||
Cost of Revenue | ||||||||
Freight | (2,070,840) | (1,277,026) | (185,151) | (8,506,738) | (5,114,937) | (741,596) | ||
Supply Chain Management | (496,353) | (478,511) | (69,378) | (1,741,832) | (1,711,818) | (248,190) | ||
Global | (346,392) | (264,014) | (38,278) | (1,258,511) | (1,081,587) | (156,815) | ||
Others | (39,679) | (20,321) | (2,946) | (118,143) | (99,288) | (14,395) | ||
Total Cost of Revenue | (2,953,264) | (2,039,872) | (295,753) | (11,625,224) | (8,007,630) | (1,160,996) | ||
Gross Loss | (228,410) | (58,477) | (8,478) | (199,388) | (263,558) | (38,211) | ||
Selling Expenses | (73,021) | (54,621) | (7,919) | (260,219) | (237,918) | (34,495) | ||
General and Administrative | (281,772) | (208,738) | (30,264) | (881,498) | (889,345) | (128,943) | ||
Research and Development | (50,294) | (29,247) | (4,240) | (180,204) | (144,181) | (20,904) | ||
Other operating (loss)/income, net | (89,893) | 3,387 | 491 | 58,337 | 108,817 | 15,777 | ||
Loss from Operations | (723,390) | (347,696) | (50,410) | (1,462,972) | (1,426,185) | (206,776) | ||
Interest Income | 17,735 | 19,208 | 2,785 | 49,658 | 80,361 | 11,651 | ||
Interest Expense | (29,310) | (16,329) | (2,367) | (142,751) | (89,058) | (12,912) | ||
Foreign Exchange Gain/(loss) | 44,186 | 68,318 | 9,905 | 44,556 | (132,730) | (19,244) | ||
Other Income | 6,709 | 2,149 | 312 | 321,075 | 25,914 | 3,757 | ||
Other Expense | (34,657) | (13,815) | (2,003) | (55,253) | 5,763 | 836 | ||
(Loss)/Gain on changes in the fair | (14,918) | (77,577) | (11,248) | (14,918) | 71,619 | 10,384 | ||
Loss before Income Tax and | (733,645) | (365,742) | (53,026) | (1,260,605) | (1,464,316) | (212,304) | ||
Income Tax Expense | (500) | (106) | (15) | (3,198) | (511) | (74) | ||
Loss before Share of Net loss of | (734,145) | (365,848) | (53,041) | (1,263,803) | (1,464,827) | (212,378) | ||
Share of Net Loss of Equity | - | - | - | (58) | - | - | ||
Net Loss from continuing | (734,145) | (365,848) | (53,041) | (1,263,861) | (1,464,827) | (212,378) | ||
Net gain/(loss) from discontinued | 2,679,400 | (31,787) | (4,609) | 1,473,489 | (38,464) | (5,577) | ||
Net Gain/(Loss) | 1,945,255 | (397,635) | (57,650) | 209,628 | (1,503,291) | (217,955) | ||
Net Loss from continuing operations | (28,727) | (13,055) | (1,893) | (52,279) | (39,980) | (5,797) | ||
Net Gain/(Loss) attributable to | 1,973,982 | (384,580) | (55,757) | 261,907 | (1,463,311) | (212,158) | ||
Summary of Unaudited Condensed Consolidated Balance Sheets (In Thousands) | |||||
As of December 31,2021 | As of December 31, 2022 | ||||
RMB | RMB | US$ | |||
Assets | |||||
Current Assets | |||||
Cash and Cash Equivalents | 3,571,745 | 533,481 | 77,347 | ||
Restricted Cash | 675,159 | 399,337 | 57,898 | ||
Accounts and Notes Receivables | 827,631 | 691,324 | 100,237 | ||
Inventories | 25,622 | 16,480 | 2,389 | ||
Prepayments and Other Current | 1,172,472 | 795,401 | 115,322 | ||
Short–term Investments | 147,359 | 725,043 | 105,121 | ||
Amounts Due from Related Parties | 125,198 | 76,368 | 11,072 | ||
Lease Rental Receivables | 298,364 | 43,067 | 6,244 | ||
Total Current Assets | 6,843,550 | 3,280,501 | 475,630 | ||
Non–current Assets | |||||
Property and Equipment, Net | 762,642 | 784,732 | 113,775 | ||
Intangible Assets, Net | 55,684 | 75,553 | 10,954 | ||
Long–term Investments | 219,171 | 156,859 | 22,742 | ||
Goodwill | 54,135 | 54,135 | 7,849 | ||
Non–current Deposits | 92,866 | 50,767 | 7,361 | ||
Other Non–current Assets | 111,640 | 75,666 | 10,971 | ||
Restricted Cash | 1,069,244 | 1,545,605 | 224,092 | ||
Lease Rental Receivables | 235,429 | 40,188 | 5,827 | ||
Operating Lease Right-of-use | 1,899,522 | 1,743,798 | 252,827 | ||
Total non–current Assets | 4,500,333 | 4,527,303 | 656,398 | ||
Total Assets | 11,343,883 | 7,807,804 | 1,132,028 | ||
Liabilities and Shareholders' | |||||
Current Liabilities | |||||
Long-term borrowings-current | 287,814 | 79,148 | 11,475 | ||
Convertible Senior Notes held by | 633,475 | 1,045,488 | 151,582 | ||
Convertible Senior Notes held by | 633,475 | 77 | 11 | ||
Short–term Bank Loans | 530,495 | 183,270 | 26,572 | ||
Accounts and Notes Payable | 1,353,150 | 1,430,004 | 207,331 | ||
Income Tax Payable | 587 | 1,563 | 227 | ||
Customer Advances and Deposits | 298,353 | 277,737 | 40,268 | ||
Accrued Expenses and Other | 1,591,639 | 1,198,228 | 173,727 | ||
Financing Lease Liabilities | 1,851 | 1,490 | 216 | ||
Operating Lease Liabilities | 518,248 | 544,262 | 78,911 | ||
Amounts Due to Related Parties | 2,763 | 1,315 | 191 | ||
Total Current Liabilities | 5,851,850 | 4,762,582 | 690,511 | ||
Summary of Unaudited Condensed Consolidated Balance Sheets (Cont'd) (In Thousands) | ||||
As of December 31, 2021 | As of December 31, 2022 | |||
RMB | RMB | US$ | ||
Non-current Liabilities | ||||
Convertible senior notes held by related parties | 955,097 | - | - | |
Long-term borrowings | 67,080 | 381 | 55 | |
Operating Lease Liabilities | 1,456,843 | 1,292,057 | 187,331 | |
Financing Lease Liabilities | 2,121 | 1,392 | 202 | |
Other Non–current Liabilities | 24,261 | 18,752 | 2,719 | |
Long-term Bank Loans | 769,767 | 928,894 | 134,677 | |
Total Non–current Liabilities | 3,275,169 | 2,241,476 | 324,984 | |
Total Liabilities | 9,127,019 | 7,004,058 | 1,015,495 | |
Mezzanine Equity: | ||||
Convertible Non-controlling Interests | 191,865 | 191,865 | 27,818 | |
Total mezzanine equity | 191,865 | 191,865 | 27,818 | |
Shareholders' Equity | ||||
Ordinary Shares | 25,988 | 25,988 | 3,768 | |
Treasury Shares | (113,031) | - | - | |
Additional Paid–In Capital | 19,522,173 | 19,481,417 | 2,824,540 | |
Statutory reserves | 167 | - | - | |
Accumulated Deficit | (17,471,716) | (18,934,860)([15]) | (2,745,297) | |
Accumulated Other | 107,379 | 124,464 | 18,046 | |
BEST Inc. Shareholders' Equity | 2,070,960 | 697,009 | 101,057 | |
Non-controlling Interests | (45,961) | (85,128) | (12,342) | |
Total Shareholders' Equity | 2,024,999 | 611,881 | 88,715 | |
Total Liabilities, Mezzanine Equity | 11,343,883 | 7,807,804 | 1,132,028 | |
Summary of Unaudited Condensed Consolidated Statements of Cash Flows (In Thousands) | |||||||
Three Months Ended December 31, | Fiscal Year Ended December 31, | ||||||
2021 | 2022 | 2021 | 2022 | ||||
RMB | RMB | US$ | RMB | RMB | US$ | ||
Net cash used in continuing | (508,632) | (241,890) | (35,071) | (891,135) | (1,051,662) | (152,478) | |
Net cash used in discontinued | (387,540) | - | - | (1,912,826) | (66,174) | (9,594) | |
Net cash used in operating | (896,172) | (241,890) | (35,071) | (2,803,961) | (1,117,836) | (162,072) | |
Net cash generated from | 3,236,982 | 239,536 | 34,729 | 4,990,734 | 150,756 | 21,858 | |
Net cash used in discontinued | (97,328) | - | - | (448,016) | - | - | |
Net cash generated from | 3,139,654 | 239,536 | 34,729 | 4,542,718 | 150,756 | 21,858 | |
Net cash (used in)/generated | (746,656) | 481 | 70 | (237,922) | (1,948,367) | (282,487) | |
Net cash generated from/(used | 469,421 | - | - | (337,838) | - | - | |
Net cash (used in)/generated | (277,235) | 481 | 70 | (575,760) | (1,948,367) | (282,487) | |
Exchange Rate Effect on Cash | (29,450) | (14,864) | (2,155) | (55,970) | 77,722 | 11,269 | |
Net increase/(decrease) in | 1,936,797 | (16,737) | (2,427) | 1,107,027 | (2,837,725) | (411,432) | |
Cash and Cash Equivalents, | 3,379,351 | 2,495,160 | 361,764 | 4,209,121 | 5,316,148 | 770,769 | |
Cash and Cash Equivalents, | 5,316,148 | 2,478,423 | 359,337 | 5,316,148 | 2,478,423 | 359,337 | |
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES
For the Company's continuing operations, the table below sets forth a reconciliation of the Company's net loss to EBITDA, adjusted EBITDA and adjusted EBITDA margin for the periods indicated:
Table 5 – Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin | ||||||
Three Months Ended December 31, 2022 | ||||||
(In RMB'000) | Freight | Supply Chain | Global | Others | Unallocated([16]) | Total |
Net Loss | (137,133) | (13,939) | (134,200) | (25,378) | (55,198) | (365,848) |
Add | ||||||
Depreciation & | 19,411 | 7,492 | 11,682 | 847 | 4,448 | 43,880 |
Interest Expense | - | - | - | - | 16,329 | 16,329 |
Income Tax Expense | - | (12) | (5) | 123 | - | 106 |
Subtract | ||||||
Interest Income | - | - | - | - | (19,208) | (19,208) |
EBITDA | (117,722) | (6,459) | (122,523) | (24,408) | (53,629) | (324,741) |
Add | ||||||
Share-based Compensation | 2,237 | 1,259 | (235) | 25 | 12,291 | 15,577 |
Loss from | - | - | - | - | 12,312 | 12,312 |
Adjusted EBITDA | (115,485) | (5,200) | (122,758) | (24,383) | (29,026) | (296,852) |
Adjusted EBITDA | (9.2 %) | (1.0 %) | (62.7 %) | (101.9 %) | - | (15.0 %) |
Three Months Ended December 31, 2021 | ||||||
(In RMB'000) | Freight | Supply Chain | Global | Others | Unallocated([17]) | Total |
Net Loss | (447,057) | (74,380) | (85,518) | (60,046) | (67,144) | (734,145) |
Add | ||||||
Depreciation & | 19,730 | 9,431 | 4,696 | 23,257 | 6,058 | 63,172 |
Interest Expense | - | - | - | - | 29,310 | 29,310 |
Income Tax | - | 79 | - | 421 | - | 500 |
Subtract | ||||||
Interest Income | - | - | - | - | (17,735) | (17,735) |
EBITDA | (427,327) | (64,870) | (80,822) | (36,368) | (49,511) | (658,898) |
Add | ||||||
Share-based Compensation | 3,404 | 1,967 | 2,066 | 124 | 16,173 | 23,734 |
Adjusted EBITDA | (423,923) | (62,903) | (78,756) | (36,244) | (33,338) | (635,164) |
Adjusted EBITDA | (22.9 %) | (12.9 %) | （23.8%) | (68.5 %) | - | (23.3 %) |
Fiscal Year Ended December 31, 2022 | ||||||
(In RMB'000) | Freight | Supply Chain | Global | Others | Unallocated([18]) | Total |
Net Loss | (506,411) | (32,277) | (420,687) | (213,794) | (291,658) | (1,464,827) |
Add | ||||||
Depreciation & | 79,273 | 35,789 | 29,300 | 22,846 | 22,179 | 189,387 |
Interest Expense | - | - | - | - | 89,058 | 89,058 |
Income Tax | - | 23 | 25 | 451 | 12 | 511 |
Subtract | ||||||
Interest Income | - | - | - | - | (80,361) | (80,361) |
EBITDA | (427,138) | 3,535 | (391,362) | (190,497) | (260,770) | (1,266,232) |
Add | ||||||
Share-based Compensation | 10,478 | 6,081 | 4,962 | 319 | 50,256 | 72,096 |
Loss from | - | - | - | - | 12,312 | 12,312 |
Adjusted EBITDA | (416,660) | 9,616 | (386,400) | (190,178) | (198,202) | (1,181,824) |
Adjusted EBITDA | (8.5 %) | 0.5 % | (42.1 %) | (162.8 %) | - | (15.3 %) |
Fiscal Year Ended December 31, 2021 | ||||||
(In RMB'000) | Freight | Supply Chain | Global | Others | Unallocated([19]) | Total |
Net Loss | (707,793) | (103,387) | (267,902) | (90,775) | (94,004) | (1,263,861) |
Add | ||||||
Depreciation & | 83,425 | 38,525 | 19,506 | 24,396 | 25,513 | 191,365 |
Interest Expense | - | - | - | - | 142,751 | 142,751 |
Income Tax | - | 173 | 21 | 3,010 | (6) | 3,198 |
Subtract | ||||||
Interest Income | - | - | - | - | (49,658) | (49,658) |
EBITDA | (624,368) | (64,689) | (248,375) | (63,369) | 24,596 | (976,205) |
Add | ||||||
Share-based Compensation | 13,537 | 8,351 | 8,604 | 608 | 76,581 | 107,681 |
Subtract | ||||||
Gain from | - | - | - | - | (58,643) | (58,643) |
Adjusted EBITDA | (610,831) | (56,338) | (239,771) | (62,761) | 42,534 | (927,167) |
Adjusted EBITDA | (7.4 %) | (3.1 %) | (20.1 %) | (36.4 %) | - | (8.1 %) |
For the Company's continuing operations, the table below sets forth a reconciliation of the Company's net loss to non-GAAP net loss, non-GAAP net loss margin for the periods indicated:
Table 6 – Reconciliation of Non-GAAP Net Loss and Non-GAAP Net Loss Margin | ||||||
Three Months Ended December 31, 2022 | ||||||
(In RMB'000) | Freight | Supply Chain | Global | Others | Unallocated([20]) | Total |
Net Loss | (137,133) | (13,939) | (134,200) | (25,378) | (55,198) | (365,848) |
Add | ||||||
Share-based Compensation | 2,237 | 1,259 | (235) | 25 | 12,291 | 15,577 |
Loss from | - | - | - | - | 12,312 | 12,312 |
Non-GAAP Net | (134,896) | (12,680) | (134,435) | (25,353) | (30,595) | (337,959) |
Non-GAAP Net | (10.7 %) | (2.5 %) | (68.7 %) | (106.0 %) | - | (17.1 %) |
Three Months Ended December 31, 2021 | ||||||
(In RMB'000) | Freight | Supply Chain | Global | Others | Unallocated([21]) | Total |
Net Loss | (447,057) | (74,380) | (85,518) | (60,046) | (67,144) | (734,145) |
Add | ||||||
Share-based Compensation | 3,404 | 1,967 | 2,066 | 124 | 16,173 | 23,734 |
Non-GAAP Net Loss | (443,653) | (72,413) | (83,452) | (59,922) | (50,971) | (710,411) |
Non-GAAP Net Loss Margin | (23.9 %) | (14.9 %) | (25.2 %) | (113.2 %) | - | (26.1 %) |
Fiscal Year Ended December 31, 2022 | ||||||
(In RMB'000) | Freight | Supply Chain | Global | Others | Unallocated([22]) | Total |
Net Loss | (506,411) | (32,277) | (420,687) | (213,794) | (291,658) | (1,464,827) |
Add | ||||||
Share-based Compensation | 10,478 | 6,081 | 4,962 | 319 | 50,256 | 72,096 |
Loss from | - | - | - | - | 12,312 | 12,312 |
Non-GAAP Net Loss | (495,933) | (26,196) | (415,725) | (213,475) | (229,090) | (1,380,419) |
Non-GAAP Net Loss Margin | (10.1 %) | (1.4 %) | (45.3 %) | (182.8 %) | - | (17.8 %) |
Fiscal Year Ended December 31, 2021 | ||||||
(In RMB'000) | Freight | Supply Chain | Global | Others | Unallocated([23]) | Total |
Net Loss | (707,793) | (103,387) | (267,902) | (90,775) | (94,004) | (1,263,861) |
Add | ||||||
Share-based Compensation | 13,537 | 8,351 | 8,604 | 608 | 76,581 | 107,681 |
Subtract | ||||||
Gain from | - | - | - | - | (58,643) | (58,643) |
Non-GAAP Net Loss | (694,256) | (95,036) | (259,298) | (90,167) | (76,066) | (1,214,823) |
Non-GAAP Net Loss Margin | (8.4 %) | (5.2 %) | (21.7 %) | (52.3 %) | - | (10.6 %) |
For the Company's continuing operations, the table below sets forth a reconciliation of the Company's diluted loss per ADS to Non-GAAP diluted loss per ADS for the periods indicated:
Table 7 – Reconciliation of diluted loss per ADS and Non-GAAP diluted loss per ADS | |||||
Three Months Ended December 31, | Fiscal Year Ended December 31, | ||||
2022 | 2022 | ||||
(In '000) | RMB | US$ | RMB | US$ | |
Net Loss Attributable to Ordinary Shareholders | (352,793) | (51,148) | (1,424,847) | (206,581) | |
Add | |||||
Share-based Compensation Expenses | 15,577 | 2,258 | 72,096 | 10,454 | |
Loss from depreciation of investments | 12,312 | 1,785 | 12,312 | 1,785 | |
Non-GAAP Net Loss Attributable to Ordinary | (324,904) | (47,105) | (1,340,439) | (194,342) | |
Weighted Average Diluted Ordinary Shares | |||||
Diluted | 393,078,084 | 393,078,084 | 392,192,648 | 392,192,648 | |
Diluted (Non-GAAP) | 393,078,084 | 393,078,084 | 392,192,648 | 392,192,648 | |
Diluted loss per ordinary share | (0.90) | (0.13) | (3.63) | (0.53) | |
Add | |||||
Non-GAAP adjustment to net loss per | 0.07 | 0.01 | 0.21 | 0.03 | |
Non-GAAP diluted loss per ordinary share | (0.83) | (0.12) | (3.42) | (0.50) | |
Diluted loss per ADS | (4.49) | (0.65) | (18.17) | (2.63) | |
Add | |||||
Non-GAAP adjustment to net loss per ADS | 0.36 | 0.05 | 1.08 | 0.15 | |
Non-GAAP diluted loss per ADS | (4.13) | (0.60) | (17.09) | (2.48) | |
([1]) All numbers presented have been rounded to the nearest integer, tenth, or hundredth, and year over year comparisons are based on figures before rounding. |
([2]) In December 2021, BEST sold its China express business, the principal terms of which were previously announced. As a result, China express business has been deconsolidated from the Company and its historical financial results are reflected in the Company's consolidated financial statements as discontinued operations accordingly. The financial information and non-GAAP financial information disclosed in this press release is presented on a continuing operations basis, unless otherwise specifically stated. |
([3]) Non-GAAP net income/loss represents net income/loss excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, and fair value change of equity investments (if any). |
([4]) See the sections entitled "Use of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" for more information about the non-GAAP measures referred to within this results announcement. |
([5]) Diluted earnings/loss per ADS, is calculated by dividing net income/loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares expressed in ADS outstanding during the period. |
([6]) EBITDA represents net income/loss excluding depreciation, amortization, interest expense and income tax expense and minus interest income. Adjusted EBITDA represents EBITDA excluding share-based compensation expenses and fair value change of equity investments (if any). |
([7]) Non-GAAP net income/loss represents net income/loss excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, and fair value change of equity investments (if any). |
([8]) See the sections entitled "Use of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" for more information about the non-GAAP measures referred to within this results announcement. |
([9]) Diluted earnings/loss per ADS, is calculated by dividing net income/loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares expressed in ADS outstanding during the period. |
([10]) EBITDA represents net income/loss excluding depreciation, amortization, interest expense and income tax expense and minus interest income. Adjusted EBITDA represents EBITDA excluding share-based compensation expenses and fair value change of equity investments (if any). |
([11]) All numbers presented have been rounded to the nearest integer, tenth, or hundredth, and year over year comparisons are based on figures before rounding. |
([12]) All numbers represented the financial results from continuing operations, unless otherwise stated. |
([13]) "Others" Segment primarily represents Capital business units. Results from UCargo's legacy contracts with external customers are now reported under "Freight" segment and prior period segment information were retrospectively revised to conform to current period presentation. |
([14]) The total number of shares outstanding excludes shares reserved for future issuances upon exercise or vesting of awards granted under the Company's share incentive plans. |
([15]) Including accumulated accretion to redemption value and deemed dividend in relation to redeemable convertible preferred shares of RMB9,493,807, and accumulated loss from operations of RMB9,441,053. |
([16]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments. |
([17]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments. |
([18]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments. |
([19]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments. |
([20]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments. |
([21]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments. |
([22]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments. |
([23]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments. |
SOURCE BEST Inc.
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