Tuniu Announces Unaudited Second Quarter 2020 Financial Results
NANJING, China, Aug. 28, 2020 /PRNewswire/ -- Tuniu Corporation (NASDAQ: TOUR) ("Tuniu" or the "Company"), a leading online leisure travel company in China, today announced its unaudited financial results for the second quarter ended June 30, 2020.
"After nearly six months of downturn caused by the COVID-19 outbreak, we are encouraged to see that China's domestic travel market is finally showing signs of recovery. We will continue to uphold our 'Customer First' principle in order to provide the best possible products and services to satisfy pent-up customer demand. Furthermore, we have adjusted our product strategy to focus on innovative and premium products in order to meet customers' more exacting standards in the post COVID-19 era. In cooperation with our industry partners, we are committed to providing our customers with superior travel experiences." Mr. Donald Dunde Yu, Tuniu's founder, Chairman and Chief Executive Officer, said, "In the second quarter our operating expenses continued to decline on a sequential basis. In the second half of the year, we expect to see the gradual recovery of revenues alongside the increasingly positive impact of our cost control measures."
Second Quarter 2020 Results
Net revenues were RMB34.0 million (US$4.8 million([1])) in the second quarter of 2020, representing a year-over-year decrease of 93.5% from the corresponding period in 2019. The decrease was primarily due to the negative impact brought by the outbreak and spread of COVID-19.
-- Revenues from packaged tours were RMB12.6 million (US$1.8 million) in
the second quarter of 2020, representing a year-over-year decrease of
97.1% from the corresponding period in 2019. The decrease was primarily
due to the suspension of sale of packaged tours impacted by the outbreak
and spread of COVID-19([2]).
-- Other revenues were RMB21.5 million (US$3.0 million) in the second
quarter of 2020, representing a year-over-year decrease of 76.4% from
the corresponding period in 2019. The decrease was primarily due to the
declines in service fees received from insurance companies and
commissions received from other travel-related products impacted by the
outbreak and spread of COVID-19.
[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of
US$1.00=RMB7.0651 on June 30, 2020 as set forth in H.10 statistical release of the U.S. Federal Reserve
Board and available at https://www.federalreserve.gov/releases/h10/default.htm.
[2] On January 24, 2020, the Ministry of Culture and Tourism of the People's Republic of China issued a
notice requiring travel agencies, including online travel agencies throughout the country to suspend the
operation of organized tours and the provision of a combination of flight and hotel bookings.
Cost of revenues was RMB26.3 million (US$3.7 million) in the second quarter of 2020, representing a year-over-year decrease of 90.8% from the corresponding period in 2019. As a percentage of net revenues, cost of revenues was 77.3% in the second quarter of 2020, compared to 55.2% in the corresponding period in 2019.
Gross margin was 22.7% in the second quarter of 2020, compared to a gross margin of 44.8% in the second quarter of 2019. The decrease was primarily due to the decline in net revenues impacted by the outbreak and spread of COVID-19.
Operating expenses were RMB158.1 million (US$22.4 million) in the second quarter of 2020, representing a year-over-year decrease of 63.4% from the corresponding period in 2019. Share-based compensation expenses and amortization of acquired intangible assets, which were allocated to operating expenses, were RMB19.1 million (US$2.7 million) in the second quarter of 2020. Non-GAAP([3]) operating expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets, were RMB138.9 million (US$19.7 million) in the second quarter of 2020, representing a year-over-year decrease of 63.7%.
-- Research and product development expenses were RMB20.6 million (US$2.9
million) in the second quarter of 2020, representing a year-over-year
decrease of 74.3%. Non-GAAP research and product development expenses,
which excluded share-based compensation expenses and amortization of
acquired intangible assets of RMB1.6 million (US$0.2 million), were
RMB19.0 million (US$2.7 million) in the second quarter of 2020,
representing a year-over-year decrease of 74.8% from the corresponding
period in 2019. The decrease was primarily due to the decrease in
research and product development personnel related expenses.
-- Sales and marketing expenses were RMB84.3 million (US$11.9 million) in
the second quarter of 2020, representing a year-over-year decrease of
62.5%. Non-GAAP sales and marketing expenses, which excluded share-based
compensation expenses and amortization of acquired intangible assets of
RMB15.1 million (US$2.1 million), were RMB69.2 million (US$9.8 million)
in the second quarter of 2020, representing a year-over-year decrease of
63.4% from the corresponding period in 2019. The decrease was primarily
due to the decrease in promotion expenses and sales and marketing
personnel related expenses.
-- General and administrative expenses were RMB61.0 million (US$8.6
million) in the second quarter of 2020, representing a year-over-year
decrease of 54.6%. Non-GAAP general and administrative expenses, which
excluded share-based compensation expenses and amortization of acquired
intangible assets of RMB2.5 million (US$0.3 million), were RMB58.5
million (US$8.3 million) in the second quarter of 2020, representing a
year-over-year decrease of 53.2% from the corresponding period in 2019.
The decrease was primarily due to the decrease in general and
administrative personnel related expenses.
[3] The section below entitled "About
Non-GAAP Financial Measures"
provides information about the use of
Non-GAAP financial measures in this
press release, and the table
captioned "Reconciliations of GAAP
and Non-GAAP Results" set forth at
the end of this press release
reconciles Non-GAAP financial
information with the Company's
financial results under GAAP.
Loss from operations was RMB150.3 million (US$21.3 million) in the second quarter of 2020, compared to a loss from operations of RMB199.2 million in the second quarter of 2019. Non-GAAP loss from operations, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB131.0 million (US$18.5 million) in the second quarter of 2020.
Net loss was RMB154.6 million (US$21.9 million) in the second quarter of 2020, compared to a net loss of RMB167.2 million in the second quarter of 2019. Non-GAAP net loss, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB135.3 million (US$19.1 million) in the second quarter of 2020.
Net loss attributable to ordinary shareholders was RMB147.6 million (US$20.9 million) in the second quarter of 2020, compared to a net loss attributable to ordinary shareholders of RMB168.0 million in the second quarter of 2019. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB128.3 million (US$18.2 million) in the second quarter of 2020.
As of June 30, 2020, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB1.6 billion (US$225.2 million). The COVID-19 pandemic has negatively impacted our business operation and cash flows for the second quarter of 2020, which could continue to impact on subsequent periods. Based on our liquidity assessment and management actions, we believe that our available cash, cash equivalents and maturity of investments will be sufficient to meet our working capital requirements and capital expenditures in the ordinary course of business for the next twelve months.
Business Outlook
Tuniu's business has been significantly and negatively impacted by the outbreak and spread of COVID-19 since January 2020. As a result of the continued influence by COVID-19, for the third quarter of 2020, the Company expects to generate RMB85.3 million to RMB170.5 million of net revenues, which represents 80% to 90% decrease year-over-year, and 151% to 401% increase quarter-over-quarter. This forecast reflects Tuniu's current and preliminary view on the industry and its operations, which is subject to change.
Conference Call Information
Tuniu's management will hold an earnings conference call at 8:00 am U.S. Eastern Time, on August 28, 2020, (8:00 pm, Beijing/Hong Kong Time, on August 28, 2020) to discuss the second quarter 2020 financial results.
To participate in the conference call, please dial the following numbers:
US: +1-888-346-8982
Hong Kong: +852-301-84992
Mainland China:
4001-201203
International: +1-412-902-4272
Conference ID: Tuniu 2Q 2020 Earnings
Call
A telephone replay will be available one hour after the end of the conference through September 3, 2020. The dial-in details are as follows:
US:
+1-877-344-7529
International:
+1-412-317-0088
Replay Access Code: 10147497
Additionally, a live and archived webcast of the conference call will also be available on the Company's investor relations website at http://ir.tuniu.com.
About Tuniu
Tuniu (Nasdaq:TOUR) is a leading online leisure travel company in China that offers a large selection of packaged tours, including organized and self-guided tours, as well as travel-related services for leisure travelers through its website tuniu.com and mobile platform. Tuniu covers over 420 departing cities throughout China and all popular destinations worldwide. Tuniu provides one-stop leisure travel solutions and a compelling customer experience through its online platform and offline service network, including a dedicated team of professional customer service representatives, 24/7 call centers, extensive networks of offline retail stores and self-operated local tour operators. For more information, please visit http://ir.tuniu.com.
Safe Harbor Statement
This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and 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. Tuniu may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, 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. Any statements that are not historical facts, including statements about Tuniu's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but are not limited to the following: Tuniu's goals and strategies; the growth of the online leisure travel market in China; the demand for Tuniu's products and services; its relationships with customers and travel suppliers; the Company's ability to offer competitive travel products and services; Tuniu's future business development, results of operations and financial condition; competition in the online travel industry in China; relevant government policies and regulations relating to the Company's structure, business and industry; the impact of the COVID-19 on Tuniu's business operations, the travel industry and the economy of China and elsewhere generally; and the general economic and business condition in China and elsewhere. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Tuniu does not undertake any obligation to update such information, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement the Company's unaudited consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the Company has provided non-GAAP information related to cost of revenues, research and product development expenses, sales and marketing expenses, general and administrative expenses, other operating income, total operating expenses, loss from operations, net loss, net loss attributable to ordinary shareholders, net loss per ordinary share attributable to ordinary shareholders-basic and diluted and net loss per ADS-basic and diluted, which excludes share-based compensation expenses, amortization of acquired intangible assets and impairment of acquired intangible assets. We believe that the non-GAAP financial measures used in this press release are useful for understanding and assessing underlying business performance and operating trends, and management and investors benefit from referring to these non-GAAP financial measures in assessing our financial performance and when planning and forecasting future periods. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP Results" set forth at the end of this press release.
A limitation of using non-GAAP financial measures excluding share-based compensation expenses, amortization of acquired intangible assets and impairment of acquired intangible assets is that share-based compensation expenses, amortization of acquired intangible assets and impairment of acquired intangible assets have been - and will continue to be - significant recurring expenses in the Company's business. You should not view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies.
(Financial Tables Follow)
Tuniu Corporation
Unaudited Condensed Consolidated Balance Sheets
(All amounts in thousands, except per share information)
December 31, 2019
June 30, 2020
June 30, 2020
RMB
RMB
US$
---
ASSETS
Current assets
Cash and cash equivalents 295,463 527,934 74,724
Restricted cash 327,052 85,904 12,159
Short-term investments 1,305,386 976,996 138,285
Accounts receivable, net 529,983 364,146 51,542
Amounts due from related parties 65,108 50,998 7,218
Prepayments and other current assets 1,300,284 899,562 127,324
Total current assets 3,823,276 2,905,540 411,252
Non-current assets
Long-term investments 1,305,612 557,446 78,901
Property and equipment, net 223,340 197,230 27,916
Intangible assets, net 166,267 112,602 15,938
Land use right, net 98,774 97,744 13,835
Operating lease right-of-use assets, net 105,839 54,945 7,777
Goodwill 232,007 232,007 32,838
Other non-current assets 83,923 60,147 8,514
Long-term amounts due from related parties 557,582 552,328 78,177
Total non-current assets 2,773,344 1,864,449 263,896
Total assets 6,596,620 4,769,989 675,148
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings 203,845 50,602 7,162
Accounts and notes payable 1,311,963 998,689 141,355
Amounts due to related parties 29,755 27,913 3,951
Salary and welfare payable 112,511 52,836 7,478
Taxes payable 12,207 2,255 319
Advances from customers 1,113,879 229,856 32,534
Operating lease liabilities, current 57,490 35,451 5,018
Accrued expenses and other current liabilities 907,119 897,505 127,034
Total current liabilities 3,748,769 2,295,107 324,851
Non-current liabilities
Operating lease liabilities, non-current 54,718 37,551 5,315
Deferred tax liabilities 23,658 22,029 3,118
Long-term borrowings 9,689 19,403 2,746
Other non-current liabilities 10,947 10,947 1,550
Total non-current liabilities 99,012 89,930 12,729
Total liabilities 3,847,781 2,385,037 337,580
Mezzanine equity
Redeemable noncontrolling interests 37,200 37,261 5,274
Shareholders' equity
Ordinary shares 249 249 35
Less: Treasury stock (310,942) (308,146) (43,615)
Additional paid-in capital 9,113,512 9,118,231 1,290,602
Accumulated other comprehensive income 293,784 301,604 42,689
Accumulated deficit* (6,385,974) (6,754,555) (956,045)
Total Tuniu's shareholders' equity 2,710,629 2,357,383 333,666
Noncontrolling interests 1,010 (9,692) (1,372)
Total Shareholders' equity 2,711,639 2,347,691 332,294
Total liabilities and shareholders' equity 6,596,620 4,769,989 675,148
*On 1 January 2020, the Company adopted ASU No. 2016-13 (ASU 2016-13), "Financial Instruments - Credit Losses", and recognized a
cumulative-effect adjustment to the opening retained earnings at the adoption date.
Tuniu Corporation
Unaudited Condensed Consolidated Statements of Comprehensive Loss
(All amounts in thousands, except per share information)
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
June 30, 2019
March 31, 2020
June 30, 2020
June 30, 2020
RMB
RMB
RMB
US$
---
Revenues
Packaged tours 429,482 120,240 12,563 1,778
Others 90,848 53,741 21,461 3,038
Net revenues 520,330 173,981 34,024 4,816
Cost of revenues (287,330) (81,460) (26,292) (3,721)
Gross profit 233,000 92,521 7,732 1,095
Operating expenses
Research and product development (80,197) (51,026) (20,647) (2,922)
Sales and marketing (224,582) (124,698) (84,255) (11,926)
General and administrative (134,389) (133,860) (60,952) (8,627)
Other operating income 6,925 1,574 7,774 1,100
Total operating expenses (432,243) (308,010) (158,080) (22,375)
Loss from operations (199,243) (215,489) (150,348) (21,280)
Other income/(expenses)
Interest and investment income, net 36,645 21,852 7,061 999
Interest expense (6,970) (10,499) (9,627) (1,363)
Foreign exchange gains/(losses), net 1,090 (877) (4,184) (592)
Other income/(loss), net 586 (1,718) 1,323 187
Loss before income tax expense (167,892) (206,731) (155,775) (22,049)
Income tax benefit 738 817 934 132
Equity in income of affiliates - 744 215 30
---
Net loss (167,154) (205,170) (154,626) (21,887)
Net loss attributable to noncontrolling interests (444) (3,629) (7,073) (1,001)
Net income/(loss) attributable to redeemable noncontrolling 245 (81) 142 20
interests
Net loss attributable to Tuniu Corporation (166,955) (201,460) (147,695) (20,906)
(Accretion on)/Reversal of redeemable noncontrolling interests (1,033) (81) 81 11
Net loss attributable to ordinary shareholders (167,988) (201,541) (147,614) (20,895)
Net loss (167,154) (205,170) (154,626) (21,887)
Other comprehensive income/(loss):
Foreign currency translation adjustment, net of nil tax 7,110 8,091 (271) (38)
Comprehensive loss (160,044) (197,079) (154,897) (21,925)
Loss per share
Net loss per ordinary share attributable to ordinary shareholders - (0.45) (0.54) (0.40) (0.06)
basic and diluted
Net loss per ADS - basic and diluted* (1.35) (1.62) (1.20) (0.18)
Weighted average number of ordinary shares used in computing 369,343,738 370,055,731 370,145,186 370,145,186
basic and diluted loss per share
Share-based compensation expenses included are as follows:
Cost of revenues 1,827 207 189 27
Research and product development 4,112 2,136 832 118
Sales and marketing 1,519 205 147 21
General and administrative 8,723 2,025 1,759 249
Total 16,181 4,573 2,927 415
*Each ADS represents three of the Company's ordinary shares.
Reconciliations of GAAP and Non-GAAP Results
(All amounts in thousands, except per share information)
Quarter Ended June 30, 2020
GAAP
Share-based
Amortization of acquired
Impairment of acquired
Non-GAAP
Result
Compensation
intangible assets
intangible assets
Result
---
Cost of revenues (26,292) 189 (26,103)
Research and product development (20,647) 832 782 (19,033)
Sales and marketing (84,255) 147 14,915 (69,193)
General and administrative (60,952) 1,759 709 (58,484)
Other operating income 7,774 7,774
Total operating expenses (158,080) 2,738 16,406 (138,936)
Loss from operations (150,348) 2,927 16,406 (131,015)
Net loss (154,626) 2,927 16,406 (135,293)
Net loss attributable to ordinary (147,614) 2,927 16,406 (128,281)
shareholders
Net loss per ordinary share attributable to ordinary (0.40) (0.35)
shareholders - basic and diluted
Net loss per ADS - basic and diluted (1.20) (1.05)
Weighted average number of ordinary shares used in 370,145,186 370,145,186
computing basic and diluted loss per share
Quarter Ended March 31, 2020
GAAP
Share-based
Amortization of acquired
Impairment of acquired
Non-GAAP
Result
Compensation
intangible assets
intangible assets
Result
---
Cost of revenues (81,460) 207 (81,253)
Research and product development (51,026) 2,136 933 (47,957)
Sales and marketing (124,698) 205 22,050 9,554 (92,889)
General and administrative (133,860) 2,025 709 (131,126)
Other operating income 1,574 1,574
Total operating expenses (308,010) 4,366 23,692 9,554 (270,398)
Loss from operations (215,489) 4,573 23,692 9,554 (177,670)
Net Loss (205,170) 4,573 23,692 9,554 (167,351)
Net loss attributable to ordinary shareholders (201,541) 4,573 23,692 9,554 (163,722)
Net loss per ordinary share attributable to ordinary (0.54) (0.44)
shareholders - basic and diluted
Net loss per ADS - basic and diluted (1.62) (1.32)
Weighted average number of ordinary shares used in 370,055,731 370,055,731
computing basic and diluted loss per share
Quarter Ended June 30, 2019
GAAP
Share-based
Amortization of acquired
Impairment of acquired
Non-GAAP
Result
Compensation
intangible assets
intangible assets
Result
---
Cost of revenues (287,330) 1,827 (285,503)
Research and product development (80,197) 4,112 513 (75,572)
Sales and marketing (224,582) 1,519 34,163 (188,900)
General and administrative (134,389) 8,723 704 (124,962)
Other operating income 6,925 6,925
Total operating expenses (432,243) 14,354 35,380 (382,509)
Loss from operations (199,243) 16,181 35,380 (147,682)
Net loss (167,154) 16,181 35,380 (115,593)
Net loss attributable to ordinary shareholders (167,988) 16,181 35,380 (116,427)
Net loss per ordinary share attributable to ordinary (0.45) (0.32)
shareholders - basic and diluted
Net loss per ADS - basic and diluted (1.35) (0.96)
Weighted average number of ordinary shares used in 369,343,738 369,343,738
computing basic and diluted loss per share
*Basic net loss per ordinary share attributable to ordinary shareholders is calculated by dividing net loss attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the periods. Diluted net loss per ordinary share attributable to ordinary shareholders is calculated by dividing net loss attributable to ordinary
shareholders by the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the periods, including the dilutive effect of share-based
awards as determined under the treasury stock method.
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SOURCE Tuniu
