BEST Inc. Announces Unaudited Second Quarter 2021 Financial Results

HANGZHOU, China, Aug. 17, 2021 /PRNewswire/ — BEST Inc. (NYSE: BEST) («BEST» or the «Company»), a leading integrated smart supply…

HANGZHOU, China, Aug. 17, 2021 /PRNewswire/ — BEST Inc. (NYSE: BEST) («BEST» or the «Company»), a leading integrated smart supply chain solutions and logistics services provider in China, today announced its unaudited financial results for the quarter ended June 30, 2021.

BEST Inc. Logo (PRNewsfoto/BEST Inc.)

Johnny Chou, Founder, Chairman and Chief Executive Officer of BEST, commented, «In the second quarter we continued to press forward with our strategic refocusing plan and build on the encouraging signs we are seeing in network stability, service quality, and cost reduction, while adapting to the competitive industry landscape. In particular, our Express continued to make progress in unit cost reduction and witnessed significant network improvement with enhanced service quality. For Freight business, it continued its industry leading position and registered a net profit for the quarter with emphasis on our e-commerce capability. Supply Chain Management achieved profitability by serving high-margin customers and expanding cloud OFCs network supported by smart logistic management for better operating efficiency. Our Global business continued its growth momentum with parcel volume in Southeast Asia increasing 140.7% year-over-year despite a resurgence of the COVID-19 pandemic in the region.»

«Given the supportive industry regulatory environment and continued strong e-commerce growth, we are optimistic that our strategic refocusing plan will position us to deliver improved operating and financial results in the coming quarters.» 

Gloria Fan, BEST’s Chief Financial Officer, commented, «In the second quarter of 2021, our revenue reached RMB7.4 billion. The slight revenue decline compared with the second quarter of 2020 was driven by lower average selling price in Express and Freight, partially offset by higher volume in both business units. Our net loss narrowed down to RMB467.5 million compared to the first quarter of 2021, benefitting from our effective cost control across business units. As part of our refocusing plan, we continued to improve our balance sheet and streamline our asset base. From beginning of the year to the date of this press release, we have completed approximately RMB1.0 billion of financing and asset conversion. In addition, we are working on a pipeline of financing and strategic initiatives to further strengthen our balance sheet. Our balance of cash and cash equivalents, restricted cash and short-term investments were RMB3.4 billion at the end of the second quarter of 2021. Our strategic refocusing plan charts a clear path for us to achieve sustainable growth and profitability in the long run.»

FINANCIAL HIGHLIGHTS([1]) 

For the Quarter Ended June 30, 2021:

  • Revenue was RMB7,374.7 million (US$1,142.2 million), a decrease of 5.0% year-over-year («YoY»). The decrease was primarily due to a decrease in average selling price («ASP») in Express and Freight business segments, partially offset by an increase in Express and Freight volume.
  • Gross Loss was RMB144.6 million (US$22.4 million), compared to gross profit of RMB484.5 million in the same period of 2020. Gross Loss Margin was 2.0%, decreased by 8.2 percentage points («ppts») YoY.
  • Net Loss was RMB467.5 million (US$72.4 million), compared to a net profit of RMB42.7 million in the same period of 2020. Non-GAAP Net Loss([2])([3]) was RMB435.8 million (US$67.5 million), compared to non-GAAP net income of RMB80.6 million in the same period of 2020.
  • Diluted EPS([4]) was negative RMB1.19 (US$0.18), compared to positive RMB0.13 in the same period of 2020. Non-GAAP Diluted EPS(3)(4) was negative RMB1.11 (US$0.17), compared to positive RMB0.22 in the same period of 2020.
  • EBITDA([5]) was negative RMB284.8 million (US$44.1 million), compared to positive RMB188.0 million in the same period of 2020. Adjusted EBITDA(3)(5) was negative RMB253.1 million (US$39.2 million), compared to positive RMB225.0 million in the same period of 2020.

BUSINESS HIGHLIGHTS([6]) 

BEST Express – The Company remained committed to executing its refocusing strategy to optimize product and cost structure, improve network stability, as well as enhance service quality during the second quarter. The Company believes these initiatives played positive roles in upgrading its network and expects this will be reflected in its financial metrics later this year.

In the second quarter of 2021, parcel volume increased by 1.2% YoY to 2.3 billion. Gross margin decreased by 11.0 ppts primarily due to a decline in ASP per parcel of 18.0% YoY, partially offset by a decrease in average cost per parcel of 8.5% YoY. 

([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]) 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).

([3]) 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.

([4]) Diluted earnings per share, or Diluted EPS, 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 outstanding during the period.

([5]) EBITDA represents net 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).

([6]) All numbers presented have been rounded to the nearest integer, tenth, or hundredth, and year-over-year comparisons are based on figures before rounding.          

BEST Freight – Freight continued to strengthen its industry leadership through continued operating efficiency, networking expansion and enhanced service quality.

Freight returned to profitability at the bottom line in the second quarter of 2021. The average cost per tonne remained relatively steady YoY despite higher oil prices in the second quarter of 2021 and the absence of highway toll subsidy in the second quarter of 2021 as compared with the same period in 2020. Freight volume for this quarter increased 9.3% YoY, with e-commerce volume growth of 23.1% YoY, contributing to 19.2% of total volume.

BEST Supply Chain Management – In the second quarter of 2021, the Company continued to focus on high-margin customers, expanding its cloud OFCs network and enhancing operating efficiency. The total number of orders fulfilled by Cloud OFCs increased by 8.2% YoY to 120.5 million in the second quarter and the total number of orders fulfilled by franchised Cloud OFCs increased by 36.3% YoY to 73.1 million. The number of franchised OFCs increased by 5.8% YoY to 345 in the second quarter of 2021. Gross margin for Supply Chain Management improved to 9.0% from the 5.4% in the first quarter of 2021.

BEST Global – Global continued its fast growth momentum in Southeast Asia and has made significant margin improvement. In the second quarter of 2021, parcel volume in Southeast Asia increased by 140.7% YoY to 38.8 million, driven by 80.0% and 195.5% YoY growth in Thailand and Vietnam, respectively. Global’s gross margin improved significantly by 7.0 ppts year-over-year, benefiting from economies of scale fueled by increased market share and network expansion in the region, as well as utilization of our strong supply chain management capabilities and cross-border logistics solutions by leveraging our Express, Freight and Supply Chain Management expertise.

Others For UCargo, as of June 30, 2021, the number of registered drivers on the UCargo mobile app increased by 53.9% YoY to 375,802. In the second quarter of 2021, the total number of transactions on the trucking brokerage platform increased by 55.1% YoY to 212,941.

Key Operational Metrics


Three Months Ended

% Change YoY

Express Parcel Volume (in ‘000)

June 30 ,

2019


June 30,

2020


June 30,

2021


2020 vs

2019


2021 vs

2020

1,906,863

2,274,585

2,300,851

19.3%

1.2%

Freight Volume (Tonne in ‘000)

1,730

2,230

2,438


28.9%

9.3%

Supply Chain Management

   Orders Fulfilled (in ‘000)

86,663

111,332

120,471


28.5%

8.2%

Global Parcel Volume in

   Southeast Asia (in ‘000)

783


16,100


38,761


1,955%


140.7%

UCargo Number of

   Transactions (in ‘000)

115

137


213


19.8%


55.1%

FINANCIAL RESULTS

For the Quarter Ended June 30, 2021: 

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



June 30, 2020


June 30, 2021



(In ‘000, except for %)

RMB

% of

Revenue


RMB

US$

% of

Revenue


% Change

YoY

Express

5,165,696

66.5%


4,281,367

663,099

58.0%


(17.1%)

Freight

1,370,862

17.7%


1,398,561

216,610

19.0%


2.0%

Supply Chain

Management

509,708

6.6%


479,555

74,274

6.5%


(5.9%)

Global

192,500

2.5%


314,602

48,726

4.3%


63.4%

Others([7])

522,144

6.7%


900,613

139,487

12.2%


72.5%

Total Revenue

7,760,910

100.0%


7,374,698

1,142,196

100.0%


(5.0%)

 

  • Express Service Revenue decreased by 17.1% YoY to RMB4,281.4 million (US$663.1 million) from RMB5,165.7 million, primarily due to an 18.0% YoY decrease in ASP per parcel, partially offset by a 1.2% YoY increase in parcel volume. The decrease in ASP per parcel was primarily attributable to competitive market dynamics.
  • Freight Service Revenue increased by 2.0% YoY to RMB1,398.6 million (US$216.6 million) from RMB1,370.9 million, primarily due to a 9.3% YoY increase in freight volume, partially offset by a 6.5% YoY decrease in ASP per tonne.
  • Supply Chain Management Service Revenue decreased by 5.9% YoY to RMB479.6 million (US$74.3 million) from RMB509.7 million, primarily due to discontinuation of service to certain low-margin legacy customers, partially offset by an 8.2% YoY increase in the total number of orders fulfilled by Cloud OFCs.
  • Global Service Revenue increased by 63.4% YoY to RMB314.6 million (US$48.7 million) from RMB192.5 million, primarily due to strong growth in parcel volumes in Southeast Asia.
  • Others Services Revenue increased by 72.5% YoY to RMB900.6 million (US$139.5 million) from RMB522.1 million, primarily due to a strong increase in total number of transactions of UCargo business.

([7]) «Others» Segment represents UCargo and Capital business units.                  

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

Change

YoY


June 30, 2020


June 30, 2021


(In ‘000, except for %)

RMB

% of

Revenue


RMB

US$

% of

Revenue


Express

(4,874,191)

94.4%


(4,512,211)

(698,852)

105.4%


11.0ppts

Freight

(1,242,847)

90.7%


(1,365,578)

(211,501)

97.6%


6.9ppts

Supply Chain

Management

(460,298)

90.3%


(436,530)

(67,610)

91.0%


0.7ppts

Global

(214,540)

111.4%


(328,597)

(50,893)

104.4%


(7.0ppts)

Others

(484,491)

92.8%


(876,401)

(135,737)

97.3%


4.5ppts

Total Cost of Revenue

(7,276,367)

93.8%


(7,519,317)

(1,164,593)

102.0%


 8.2ppts

Cost of Revenue was RMB7,519.3 million (US$1,164.6 million) or 102.0% of revenue in the second quarter of 2021, compared to RMB7,276.4 million or 93.8% of revenue in the same quarter of 2020. The increase of 8.2 ppts in cost of revenue as a percentage of revenue was primarily attributable to a steeper decrease in ASP than unit cost for Express and Freight business units.

Table 3 – Breakdown of Average Cost Per Parcel and Average Cost Per Tonne






Three Months Ended


% Change

(in RMB)

June 30, 2020

June 30, 2021


YoY

Express:





Average Cost Per Parcel

2.14

1.96


(8.5%)

Average Transportation Cost Per Parcel

0.57

0.54


(5.3%)

Average Labor Cost Per Parcel

0.21

0.19


(9.5%)

Average Lease Cost Per Parcel

0.08

0.10


25.0%

Average Other Cost Per Parcel

0.08

0.06


(25.0%)

Average Last-mile Cost Per Parcel

1.20

1.07


(10.8%)

Freight:





Average Cost Per Tonne

557.4

560.1


0.5%

Gross Loss was RMB144.6 million (US$22.4 million) in the second quarter of 2021, compared to gross profit of RMB484.5 million in the same period of 2020. Gross Loss Margin was 2.0%. 

Operating Expenses

The following table sets forth a breakdown of operating expenses and adjusted operating expenses by category for the periods indicated.

Table 4 – Breakdown of Operating Expenses and Adjusted Operating Expenses by Category



Three Months Ended



June 30, 2020


June 30, 2021

(In ‘000, except for %)

RMB

% of

Revenue


RMB

US$

% of

Revenue


% of Revenue

Change

YoY

Selling, General and

   Administrative Expenses

(403,848)

5.2%


(458,650)

(71,036)

6.2%


1.0ppts

   Adjusted for

  
SBC Expenses

(33,865)

0.4%


(29,309)

(4,539)

0.4%


0.0ppts

Adjusted Selling, General

   and

   Administrative Expenses

(369,983)

4.8%


(429,341)

(66,497)

5.8%


1.0ppts

Research and

   Development Expenses

(42,002)

0.5%


(60,952)

(9,440)

0.8%


0.3ppts

    Adjusted for

    SBC Expenses

(2,489)

0.0%


(2,167)

(336)

0.0%


0.0ppts

Adjusted Research and

   Development Expenses

(39,513)

0.5%


(58,785)

(9,104)

0.8%


0.3ppts

Total Operating Expenses

(445,850)

5.7%


(519,602)

(80,476)

7.0%


1.3ppts

   Adjusted for

   SBC Expenses

(36,354)

0.4%


(31,476)

(4,875)

0.4%


0.0ppts

Adjusted Total

   Operating Expenses

(409,496)

5.3%


(488,126)

(75,601)

6.6%


1.3ppts











Selling, General and Administrative («SG&A») Expenses were RMB458.7 million (US$71.0 million) or 6.2% of revenue in the second quarter of 2021, compared to RMB403.8 million or 5.2% of revenue in the same quarter of 2020. The increase in SG&A expenses was primarily attributable to additional bad debt provision resulted from the pandemic and absence of certain COVID-19 pandemic related subsidies that were available in 2020.

Research and Development («R&D») Expenses were RMB61.0 million (US$9.4 million) or 0.8% of revenue in the second quarter of 2021, compared to RMB42.0 million, or 0.5% of revenue in the same quarter of 2020.

Share-based Compensation («SBC») Expenses included in the cost and expense items above in the second quarter of 2021 were RMB31.7 million (US$4.9 million), compared to RMB37.0 million in the same quarter of 2020. In the second quarter of 2021, RMB0.2 million (US$0.04 million) was allocated to cost of revenue, RMB1.6 million (US$0.2 million) was allocated to selling expenses, RMB27.7 million (US$4.3 million) was allocated to general and administrative expenses, and RMB2.2 million (US$0.3 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss 

Net Loss in the second quarter of 2021 was RMB467.5 million (US$72.4 million), compared to a net income of RMB42.7 million in the same period of 2020. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Net Loss in the second quarter of 2021 was RMB435.8 million (US$67.5 million), compared to non-GAAP net income of RMB80.6 million in the same period of 2020.

The following table sets forth a breakdown of non-GAAP net (loss)/income for the three months ended June 30, 2021 by segment.

Table 5 – Breakdown of non-GAAP Net (Loss)/Income by Segment





Three Months Ended June 30, 2021


(In RMB’000)

Express

Freight

Supply Chain

Global

Others

Unallocated([8])

Total


Non-GAAP Net (Loss)/Income

(325,971)

18,922

12,355

(52,951)

(9,486)

(78,628)

(435,759)


Diluted EPS and Non-GAAP Diluted EPS

Diluted EPS in the second quarter of 2021 was negative RMB1.19 (US$0.18), based on a weighted average of 388.1 million diluted shares outstanding during the quarter. This is compared to positive RMB0.13 on a weighted average of 389.3 million diluted shares outstanding in the same period of 2020. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Diluted EPS in the second quarter of 2021 was negative RMB1.11 (US$0.17), compared to positive RMB0.22 in the same period of 2020. A reconciliation of non-GAAP diluted EPS to diluted EPS is included at the end of this results announcement.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA in the second quarter of 2021 was negative RMB253.1 million (US$39.2 million), compared to positive RMB225.0 million in same quarter of 2020. Adjusted EBITDA Margin was negative 3.4% in the second quarter of 2021, compared to positive 2.9% in the same quarter of 2020.

Adjusted EBITDA and Adjusted EBITDA Margin by Segment

The following table sets forth a breakdown of adjusted EBITDA and adjusted EBITDA margin for the three months ended June 30, 2021 by segment.

Table 6 – Breakdown of Adjusted EBITDA and Adjusted EBITDA Margin by Segment




Three Months Ended June 30, 2021

(In RMB’000)

Express

Freight

Supply Chain

Global

Others

Unallocated([9])

Total

Adjusted EBITDA

(215,641)

36,631

22,382

(47,275)

(8,339)

(40,813)

(253,055)

Adjusted EBITDA

Margin

(5.0%)

2.6%

4.7%

(15.0%)

(0.9%)

(3.4%)

 

([8]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

([9]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

Cash and Cash Equivalents, Restricted Cash and Short-term Investments

As of June 30, 2021, cash and cash equivalents, restricted cash and short-term investments were RMB3,413.3 million (US$528.6 million), compared to RMB3,976.8 million as of March 31, 2021. The decrease in cash and cash equivalents, restricted cash and short-term investments was primarily due to net cash used in financing activities.

Net Cash Used in Operating Activities

Net cash used in continuing operating activities was RMB127.5 million (US$19.7 million), compared to net cash generated from continuing operating activities of RMB754.3 million in the same period of 2020, mainly due to decreased ASP for Express and Freight business segments.

Capital Expenditures («CAPEX»)

CAPEX was RMB174.5 million (US$27.0 million), or 2.4% of total revenue in the second quarter ended June 30, 2021, compared to CAPEX of RMB424.1 million, or 5.5% of total revenue, in the same period of 2020.

SHARES OUTSTANDING

As of the date of this press release, the Company had approximately 388.6 million ordinary shares outstanding([10]). Each American Depositary Share represents one Class A ordinary share.

FINANCIAL GUIDANCE 

Based on current market conditions and operations, the Company expects its revenue for the full fiscal year of 2021 to be between RMB28 billion and RMB32 billion. This forecast reflects management’s current and preliminary expectation, which is subject to change.

([10]) 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.

WEBCAST AND CONFERENCE CALL INFORMATION

The Company will hold a conference call at 9:00 pm U.S. Eastern Time on August 17, 2021 (9:00 am Beijing Time on August 18, 2021), to discuss its financial results and operating performance for the second quarter of 2021.

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 

: 3907495

A replay of the conference call will be accessible through August 24, 2021 by dialing the following numbers:

United States 

: +1-877-344-7529

International 

: +1-412-317-0088

Replay Access Code 

: 10159351

Please visit the Company’s investor relations website, located at http://ir.best-inc.com/, 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. Through its proprietary technology platform and extensive networks, BEST offers a comprehensive set of logistics and value-add services, including express and freight delivery, supply chain management and last-mile services, truckload service brokerage, international logistics and financial 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/.  

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, adjusted selling expenses, adjusted general and administrative expenses, adjusted research and development expenses, and non-GAAP diluted EPS, 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 June 30,

Six Months Ended June 30,


2020

2021

2020

2021


RMB

RMB

US$

RMB

RMB

US$

Revenue







Express

5,165,696

4,281,367

663,099

8,541,308

7,994,447

1,238,182

Freight

1,370,862

1,398,561

216,610

2,058,109

2,573,054

398,515

Supply Chain Management

509,708

479,555

74,274

917,300

927,216

143,607

Global

192,500

314,602

48,726

308,288

565,024

87,511

Others

522,144

900,613

139,487

938,526

1,811,596

280,580

Total Revenue

7,760,910

7,374,698

1,142,196

12,763,531

13,871,337

2,148,395

Cost of Revenue







Express

(4,874,191)

(4,512,211)

(698,852)

(8,365,512)

(8,470,338)

(1,311,888)

Freight

(1,242,847)

(1,365,578)

(211,501)

(2,059,282)

(2,539,508)

(393,320)

Supply Chain Management

(460,298)

(436,530)

(67,610)

(864,744)

(860,036)

(133,203)

Global

(214,540)

(328,597)

(50,893)

(362,858)

(593,699)

(91,952)

Others

(484,491)

(876,401)

(135,737)

(864,587)

(1,745,730)

(270,379)

Total Cost of Revenue

(7,276,367)

(7,519,317)

(1,164,593)

(12,516,983)

(14,209,311)

(2,200,742)

Gross Profit/(Loss)

484,543

(144,619)

(22,397)

246,548

(337,974)

(52,347)

Selling Expenses

(114,037)

(114,242)

(17,694)

(232,152)

(221,447)

(34,298)

General and Administrative

    Expenses

(289,811)

(344,408)

(53,342)

(555,803)

(653,638)

(101,236)

Research and Development

    Expenses

(42,002)

(60,952)

(9,440)

(92,694)

(114,639)

(17,755)

Total Operating Expenses

(445,850)

(519,602)

(80,476)

(880,649)

(989,724)

(153,289)

Income/(Loss) from

    Operations

38,693

(664,221)

(102,873)

(634,101)

(1,327,698)

(205,636)

Interest Income

18,415

16,670

2,582

40,000

33,548

5,196

Interest Expense

(41,379)

(48,165)

(7,460)

(74,551)

(94,172)

(14,585)

Foreign Exchange (Loss)/Gain

(148)

(1,228)

(190)

242

(428)

(66)

Other Income

36,426

237,107

36,723

69,219

346,551

53,674

Other Expense

(4,972)

(10,258)

(1,589)

(16,082)

(28,075)

(4,348)

Income/(Loss) before

    Income Tax and Share

    of Net Loss of Equity

    Investees

47,035

(470,095)

(72,807)

(615,273)

(1,070,274)

(165,765)

Income Tax Expense

(4,324)

2,643

409

(8,859)

(1,647)

(255)

Income/(Loss) before

    Share of Net loss of

    Equity Investees

42,711

(467,452)

(72,398)

(624,132)

(1,071,921)

(166,020)

Share of Net Loss of Equity

    Investees

(44)

(42)

(7)

(74)

(42)

(7)

Net Income/(Loss) from

    continuing operations

42,667

(467,494)

(72,405)

(624,206)

(1,071,963)

(166,027)

Net (loss)/income from

    discontinued operations

(73,566)

1,007

157

(157,445)

(12,829)

(1,987)

Net Loss

(30,899)

(466,487)

(72,248)

(781,651)

(1,084,792)

(168,014)

Net Loss from continuing

    operations attributable to

    non-controlling interests

(6,571)

(5,519)

(855)

(14,431)

(10,929)

(1,693)

Net Loss attributable to

    BEST Inc.

(24,328)

(460,968)

(71,393)

(767,220)

(1,073,863)

(166,321)

 

 

 

Summary of Unaudited Condensed Consolidated Balance Sheets

(In Thousands)






As of December 31, 2020


As of June 30, 2021


RMB


RMB

US$

Assets





Current Assets





Cash and Cash Equivalents

1,383,317


908,434

140,699

Restricted Cash

2,102,426


1,999,204

309,637

Accounts and Notes Receivables

983,601


967,940

149,915

Inventories

44,133


39,182

6,069

Prepayments and Other Current Assets

3,304,670


3,306,158

512,058

Short–term Investments

268,647


739

114

Amounts Due from Related Parties

274,395


183,132

28,364

Lease Rental Receivables

497,127


492,639

76,300

Assets held for sale

509,395


483,011

74,809

Total Current Assets

9,367,711


8,380,439

1,297,965

Non–current Assets





Property and Equipment, Net

4,079,235


4,442,944

688,124

Intangible Assets, Net

12,198


12,203

1,890

Long–term Investments

221,426


202,603

31,379

Goodwill

295,758


295,758

45,807

Non–current Deposits

129,645


120,548

18,671

Other Non–current Assets

543,949


307,778

47,669

Restricted Cash

709,848


504,895

78,198

Lease Rental Receivables

647,678


457,668

70,884

Operating Lease Right-of-use Assets

3,863,375


3,661,110

567,034

Total non–current Assets

10,503,112


10,005,507

1,549,656

Total Assets

19,870,823


18,385,946

2,847,621

Liabilities and Shareholders’ Equity





Current Liabilities 





Securitization Debt

95,149


281,516

43,601

Short–term Bank Loans

3,082,537


2,302,392

356,595

Accounts and Notes Payable

4,144,948


4,219,851

653,572

Income Tax Payable

14,550


1,806

280

Customer Advances and Deposits and

    Deferred Revenue

1,526,051


1,349,832

209,062

Accrued Expenses and Other Liabilities

2,507,917


2,680,687

415,185

Financing Lease Liabilities

1,581


1,368

212

Operating Lease Liabilities

1,032,461


1,125,800

174,364

Amounts Due to Related Parties

35,623


6,525

1,011

Liabilities held for sale

193,432


187,818

29,089

Total Current Liabilities

12,634,249


12,157,595

1,882,971

 

 

 

Summary of Unaudited Condensed Consolidated Balance Sheets (Cont’d)

(In Thousands)





As of December 31, 2020


As of June 30, 2021



RMB


RMB

US$


Non-current Liabilities






Convertible senior notes held by

    related parties

1,617,846


1,605,562

248,670


Secured Borrowings


106,450

16,487


Convertible Senior Notes held by third

    parties

642,121


638,794

98,937


Operating Lease Liabilities

2,995,173


2,781,791

430,845


Financing Lease Liabilities

2,698


2,050

318


Other Non–current Liabilities

175,584


136,916

21,206


Long-term Bank Loans

78,548


76,456

11,842


Total Non–current Liabilities

5,511,970


5,348,019

828,305


Total Liabilities

18,146,219


17,505,614

2,711,276


Mezzanine Equity:






Convertible Non-controlling Interests


191,865

29,716


Total mezzanine equity


191,865

29,716


Shareholders’ Equity






Ordinary Shares

25,988


25,988

4,025

Treasury Shares

(211,352)


(139,460)

(21,600)

Additional Paid–In Capital

19,487,232


19,473,666

3,016,087

Statutory reserves

8,038


6,982

1,081

Accumulated Deficit

(17,710,964)


(18,783,771) ([11])

(2,909,236)

Accumulated Other

    Comprehensive Income

151,677


140,744

21,798

BEST Inc. Shareholders’ Equity

1,750,619


724,149

112,155

Non-controlling Interests

(26,015)


(35,682)

(5,526)

Total Shareholders’ Equity

1,724,604


688,467

106,629

Total Liabilities, Mezzanine Equity

    and Shareholders’
 Equity

19,870,823


18,385,946

2,847,621

 

([11]) 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 RMB9,289,964                    

 

 

Summary of Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)
 





 

Three Months Ended June 30,

 

Six Months Ended June 30,


2020

2021

2020

2021


RMB

RMB

US$

RMB

RMB

US$

Net cash generated from/(used in)

   continuing operating activities

754,261

(127,506)

(19,748)

(476,664)

(691,154)

(107,047)

Net cash (used in)/generated from

   discontinued operating activities

(31,655)

35,914

5,562

(94,243)

(58,389)

(9,043)

Net cash generated from/(used in)

   operating activities

722,606

(91,592)

(14,186)

(570,907)

(749,543)

(116,090)

Net cash (used in)/generated from

   continuing investing activities

(282,923)

325,541

50,420

(168,766)

348,370

53,956

Net cash used in discontinued

   Investing activities

(161)

(184)

(28)

(401)

(217)

(34)

Net cash (used in) /generated

   from investing activities

(283,084)

325,357

50,392

(169,167)

348,153

53,922

Net cash generated from/(used in)  

   continuing financing activities

757,081

(271,861)

(42,106)

1,512,066

(77,914)

(12,067)

Net cash generated from/(used in)

   discontinued financing activities

5,000

(187,500)

(29,040)

(145,000)

(280,000)

(43,366)

Net cash generated from (used

   in) financing activities

762,081

(459,361)

(71,146)

1,367,066

(357,914)

(55,433)

Exchange Rate Effect on Cash,

   Cash Equivalents, and Restricted

   Cash

1,023

(37,131)

(5,751)

25,189

(30,415)

(4,711)

Net Increase/(decrease) in Cash

   and Cash Equivalents, and

   Restricted Cash

1,202,626

(262,727)

(40,691)

652,181

(789,719)

(122,312)

Cash and Cash Equivalents, and

   Restricted Cash at Beginning of
 

   Period

3,406,770

3,682,129

570,289

3,957,215

4,209,121

651,910

Cash and Cash Equivalents, and

   Restricted Cash at End of
 

   Period

4,609,396

3,419,402

529,598

4,609,396

3,419,402

529,598

Less: Cash and Cash Equivalents,

   and Restricted Cash held for

   sales at end of the Period

12,658

6,869

1,064

12,658

6,869

1,064

Cash and Cash Equivalents, and

   Restricted Cash from

   continuing operations at End of
 

   Period

4,596,738

3,412,533

528,534

4,596,738

3,412,533

528,534

 

 

RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

The table below sets forth a reconciliation of the Company’s net (loss)/income to EBITDA, adjusted EBITDA and adjusted EBITDA margin for the periods indicated:

Table 7 – Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin



Three Months Ended June 30, 2021


(In RMB’000)

Express

Freight

Supply Chain

Global

Others


Unallocated([12])

Total


Net (Loss)/Income

(327,713)

15,910

10,027

(55,271)

(10,153)


(100,294)

(467,494)


Add:










Depreciation &

Amortization

110,330

17,709

9,812

5,655

4,021


6,325

153,852


Interest Expense


48,165

48,165


Income Tax

Expense/(Benefit)

215

21

(2,874)


(5)

(2,643)


Subtract:










Interest Income


(16,670)

(16,670)


EBITDA

(217,383)

33,619

20,054

(49,595)

(9,006)


(62,479)

(284,790)


Add:










   Share-based

  
Compensation

   Expenses

1,742

3,012

2,328

2,320

667


21,666

31,735


Adjusted EBITDA

(215,641)

36,631

22,382

(47,275)

(8,339)


(40,813)

(253,055)


Adjusted EBITDA

   Margin

(5.0%)

2.6%

4.7%

(15.0%)

(0.9%)

(3.4%)



 


Three Months  Ended June 30, 2020


(In RMB’000)

Express

Freight

Supply Chain

Global

Others


Unallocated([13])

Total


Net Income/(Loss)

127,416

63,866

(7,966)

(53,899)

(13,937)


(72,813)

42,667


Add:










Depreciation &

Amortization

79,308

15,135

10,936

4,151

513


7,963

118,006


Interest Expense


41,379

41,379


Income Tax

Expense/(Benefit)

1,236

(96)

(281)

3,465


4,324


Subtract:










Interest Income


(18,415)

(18,415)


EBITDA

207,960

79,001

2,874

(50,029)

(9,959)


(41,886)

187,961


Add:










   Share-based

  
Compensation 

   Expenses

4,399

2,721

2,835

2,224

1,035


23,822

37,036


Adjusted EBITDA

212,359

81,722

5,709

(47,805)

(8,924)


(18,064)

224,997


Adjusted EBITDA 

Margin

4.1%

6.0%

1.1%

(24.8%)

(1.7%)


2.9%



 

([12]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

([13]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

 

 

The table below sets forth a reconciliation of the Company’s net (loss)/income to non-GAAP net (loss)/income, non-GAAP net (loss)/income margin for the periods indicated:

Table 8 – Reconciliation of Non-GAAP Net (Loss)/Income and Non-GAAP Net (Loss)/Income Margin



Three Months Ended June 30, 2021


(In RMB’000)

Express

Freight

Supply Chain

Global

Others


Unallocated([14])

Total


Net (Loss)/Income

(327,713)

15,910

10,027

(55,271)

(10,153)


(100,294)

(467,494)


Add:










   Share-based

  
Compensation

   Expenses

1,742

3,012

2,328

2,320

667


21,666

31,735


Non-GAAP Net 

(Loss)/Income

(325,971)

18,922

12,355

(52,951)

(9,486)


(78,628)

(435,759)


Non-GAAP Net 

(Loss)/Income

Margin

(7.6%)

1.4%

2.6%

(16.8%)

(1.1%)


(5.9%)


 


Three Months Ended June 30, 2020


(In RMB’000)

Express

Freight

Supply Chain

Global

Others


Unallocated([15])

Total


Net Income/(Loss)

127,416

63,866

(7,966)

(53,899)

(13,937)


(72,813)

42,667


Add:










   Share-based

  
Compensation

   Expenses

4,399

2,721

2,835

2,224

1,035


23,822

37,036


   Amortization of

  
Intangible Assets

  
Resulting from

  
Business

940


940


Non-GAAP Net

   Income/(Loss)

131,815

66,587

(5,131)

(50,735)

(12,902)


(48,991)

80,643


Non-GAAP Net

   Income/(Loss)

Margin

2.6%

4.9%

(1.0%)

(26.4%)

(2.5%)

1.0%


 

([14]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

([15]) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

 

 

The table below sets forth a reconciliation of the Company’s Diluted EPS to non-GAAP Diluted EPS for the periods indicated:

Table 9 – Reconciliation of Diluted EPS and Non-GAAP Diluted EPS



Three Months Ended June 30,


Six Months Ended June 30,


2021

2021

(In ‘000)

RMB

US$


RMB

US$

Net Loss Attributable to Ordinary

   Shareholders

(461,975)

(71,550)


(1,061,034)

(164,334)

Add:






Share-based Compensation 

   Expenses

31,735

4,916


60,700

9,402

Subtract:






Gain from appreciation of

   investments


(5,562)

(861)

Non-GAAP Net Loss Attributable to

   Ordinary Shareholders for

   Computing Non-GAAP Diluted EPS

(430,240)

(66,634)


(1,005,896)

(155,793)

Weighted Average Diluted Shares

   Outstanding During the Period






Diluted

388,060,785

388,060,785


387,438,822

387,438,822

Diluted (Non-GAAP)

388,060,785

388,060,785


387,438,822

387,438,822

Diluted EPS

(1.19)

(0.18)


(2.74)

(0.42)

Add:






Non-GAAP adjustment to net loss per share

0.08

0.01


0.14

0.02

Non-GAAP Diluted EPS

(1.11)

(0.17)


(2.60)

(0.40)

 

 

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SOURCE BEST Inc.