Tuniu Announces Unaudited Third Quarter 2020 Financial Results
NANJING, China, Dec. 1, 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 third quarter ended September 30, 2020.
"In the third quarter, as China's domestic travel industry further recovered, Tuniu's revenues continued to improve with declining operating expenses for the third consecutive quarter as our operating cash flow turned positive," said Mr. Donald Dunde Yu, Tuniu's founder, Chairman and Chief Executive Officer. "With our strong supply chain advantages, innovative product models and diverse customer acquisition channels, Tuniu is able to offer Chinese travelers highly satisfying and cost-effective products. Looking ahead, we are confident that Tuniu is well positioned to grasp opportunities, expand our core competencies and strengthen our market position."
Third Quarter 2020 Results
Net revenues were RMB123.5 million (US$18.2 million([1])) in the third quarter of 2020, representing a year-over-year decrease of 85.5% 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 RMB86.4 million (US$12.7 million) in the third quarter of 2020, representing a year-over-year decrease of 88.4% from the corresponding period in 2019. The decrease was primarily due to the decline in travel to international destinations impacted by the outbreak and spread of COVID-19. -- Other revenues were RMB37.1 million (US$5.5 million) in the third quarter of 2020, representing a year-over-year decrease of 64.8% from the corresponding period in 2019. The decrease was primarily due to the decline in service fees received from insurance companies and revenues generated from financial services.
[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB 6.7896 on September 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.
Cost of revenues was RMB58.5 million (US$8.6 million) in the third quarter of 2020, representing a year-over-year decrease of 87.6% from the corresponding period in 2019. As a percentage of net revenues, cost of revenues was 47.3% in the third quarter of 2020, compared to 55.4% in the corresponding period in 2019.
Gross margin was 52.7% in the third quarter of 2020, compared to a gross margin of 44.6% in the third quarter of 2019.
Operating expenses were RMB127.8 million (US$18.8 million) in the third quarter of 2020, representing a year-over-year decrease of 70.8% from the corresponding period in 2019. Share-based compensation expenses and amortization of acquired intangible assets, which were allocated to operating expenses, were RMB9.6 million (US$1.4 million) in the third quarter of 2020. Non-GAAP([2]) operating expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets, were RMB118.2 million (US$17.4 million) in the third quarter of 2020, representing a year-over-year decrease of 69.4%.
-- Research and product development expenses were RMB16.0 million (US$2.4 million) in the third quarter of 2020, representing a year-over-year decrease of 75.1%. Non-GAAP research and product development expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB1.1 million (US$0.2 million), were RMB14.9 million (US$2.2 million) in the third quarter of 2020, representing a year-over-year decrease of 75.8% 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 RMB49.9 million (US$7.3 million) in the third quarter of 2020, representing a year-over-year decrease of 79.2%. Non-GAAP sales and marketing expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB6.2 million (US$0.9 million), were RMB43.6 million (US$6.4 million) in the third quarter of 2020, representing a year-over-year decrease of 78.7% 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 RMB69.8 million (US$10.3 million) in the third quarter of 2020, representing a year-over-year decrease of 49.6%. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB2.3 million (US$0.3 million), were RMB67.4 million (US$9.9 million) in the third quarter of 2020, representing a year-over-year decrease of 45.8% from the corresponding period in 2019. The decrease was primarily due to the decrease in general and administrative personnel related expenses.
[2] 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 RMB62.8 million (US$9.2 million) in the third quarter of 2020, compared to a loss from operations of RMB56.9 million in the third quarter of 2019. Non-GAAP loss from operations, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB53.0 million (US$7.8 million) in the third quarter of 2020.
Net loss was RMB62.1 million (US$9.1 million) in the third quarter of 2020, compared to a net loss of RMB12.6 million in the third quarter of 2019. Non-GAAP net loss, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB52.3 million (US$7.7 million) in the third quarter of 2020.
Net loss attributable to ordinary shareholders was RMB56.9 million (US$8.4 million) in the third quarter of 2020, compared to a net loss attributable to ordinary shareholders of RMB13.5 million in the third quarter of 2019. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB47.2 million (US$6.9 million) in the third quarter of 2020.
As of September 30, 2020, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB1.6 billion (US$229.2 million). The COVID-19 pandemic has negatively impacted our business operation and cash flows for the third 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 fourth quarter of 2020, the Company expects to generate RMB112.8 million to RMB135.4 million of net revenues, which represents 70% to 75% decrease year-over-year. 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 December 1, 2020, (9:00 pm, Beijing/Hong Kong Time, on December 1, 2020) to discuss the third 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 3Q 2020 Earnings Call
A telephone replay will be available one hour after the end of the conference through December 8, 2020. The dial-in details are as follows:
US: +1-877-344-7529 International: +1-412-317-0088
Replay Access Code: 10150213
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.
For investor and media inquiries, please contact:
China
Mary Chen
Investor Relations Director
Tuniu Corporation
Phone: +86-25-6960-9988
E-mail: ir@tuniu.com
(Financial Tables Follow)
Tuniu Corporation Unaudited Condensed Consolidated Balance Sheets (All amounts in thousands, except per share information) December 31, 2019 September 30, 2020 September 30, 2020 RMB RMB US$ --- ASSETS Current assets Cash and cash equivalents 295,463 668,419 98,447 Restricted cash 327,052 41,057 6,047 Short-term investments 1,305,386 846,372 124,657 Accounts receivable, net 529,983 312,653 46,049 Amounts due from related parties 65,108 50,795 7,481 Prepayments and other current assets 1,300,284 824,056 121,370 Total current assets 3,823,276 2,743,352 404,051 Non-current assets Long-term investments 1,305,612 464,226 68,373 Property and equipment, net 223,340 187,832 27,665 Intangible assets, net 166,267 100,632 14,821 Land use right, net 98,774 97,228 14,320 Operating lease right-of-use assets, net 105,839 39,756 5,855 Goodwill 232,007 232,007 34,171 Other non-current assets 83,923 48,213 7,101 Long-term amounts due from related parties 557,582 554,152 81,621 Total non-current assets 2,773,344 1,724,046 253,927 Total assets 6,596,620 4,467,398 657,978 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term borrowings 203,845 20,736 3,054 Accounts and notes payable 1,311,963 925,857 136,364 Amounts due to related parties 29,755 22,902 3,373 Salary and welfare payable 112,511 60,292 8,880 Taxes payable 12,207 2,824 416 Advances from customers 1,113,879 300,022 44,188 Operating lease liabilities, current 57,490 24,081 3,547 Accrued expenses and other current liabilities 907,119 719,670 105,996 Total current liabilities 3,748,769 2,076,384 305,818 Non-current liabilities Operating lease liabilities, non-current 54,718 31,705 4,670 Deferred tax liabilities 23,658 21,235 3,128 Long-term borrowings 9,689 24,074 3,546 Other non-current liabilities 10,947 10,947 1,612 Total non-current liabilities 99,012 87,961 12,956 Total liabilities 3,847,781 2,164,345 318,774 Mezzanine equity Redeemable noncontrolling interests 37,200 27,261 4,015 Shareholders' equity Ordinary shares 249 249 37 Less: Treasury stock (310,942) (307,290) (45,259) Additional paid-in capital 9,113,512 9,119,524 1,343,161 Accumulated other comprehensive income 293,784 289,611 42,655 Accumulated deficit* (6,385,974) (6,811,458) (1,003,219) Total Tuniu's shareholders' equity 2,710,629 2,290,636 337,375 Noncontrolling interests 1,010 (14,844) (2,186) Total Shareholders' equity 2,711,639 2,275,792 335,189 Total liabilities and shareholders' equity 6,596,620 4,467,398 657,978 *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 September 30, 2019 June 30, 2020 September 30, 2020 September 30, 2020 RMB RMB RMB US$ --- Revenues Packaged tours 747,122 12,563 86,413 12,727 Others 105,395 21,461 37,132 5,469 Net revenues 852,517 34,024 123,545 18,196 Cost of revenues (472,040) (26,292) (58,472) (8,612) Gross profit 380,477 7,732 65,073 9,584 Operating expenses Research and product development (64,310) (20,647) (16,008) (2,358) Sales and marketing (239,973) (84,255) (49,869) (7,345) General and administrative (138,456) (60,952) (69,769) (10,276) Other operating income 5,406 7,774 7,803 1,149 Total operating expenses (437,333) (158,080) (127,843) (18,830) Loss from operations (56,856) (150,348) (62,770) (9,246) Other income/(expenses) Interest and investment income/(loss), net 42,780 7,061 (7,389) (1,088) Interest expense (8,900) (9,627) (6,483) (955) Foreign exchange (losses)/gains, net (5,190) (4,184) 12,779 1,882 Other income, net 14,847 1,323 1,056 156 Loss before income tax expense (13,319) (155,775) (62,807) (9,251) Income tax benefit 698 934 1,037 153 Equity in income/(loss) of affiliates - 215 (286) (42) --- Net loss (12,621) (154,626) (62,056) (9,140) Net loss attributable to noncontrolling interests (565) (7,073) (5,152) (759) Net (loss)/income attributable to redeemable noncontrolling (102) 142 - interests Net loss attributable to Tuniu Corporation (11,954) (147,695) (56,904) (8,381) (Accretion on)/Reversal of redeemable noncontrolling interests (1,518) 81 - Net loss attributable to ordinary shareholders (13,472) (147,614) (56,904) (8,381) Net loss (12,621) (154,626) (62,056) (9,140) Other comprehensive income/(loss): Foreign currency translation adjustment, net of nil tax 12,276 (271) (11,993) (1,766) Comprehensive loss (345) (154,897) (74,049) (10,906) Loss per share Net loss per ordinary share attributable to ordinary shareholders - (0.04) (0.40) (0.15) (0.02) basic and diluted Net loss per ADS - basic and diluted* (0.12) (1.20) (0.45) (0.06) Weighted average number of ordinary shares used in computing 369,559,765 370,145,186 370,298,762 370,298,762 basic and diluted loss per share Share-based compensation expenses included are as follows: Cost of revenues 52 189 97 14 Research and product development 2,065 832 287 42 Sales and marketing 119 147 132 19 General and administrative 13,294 1,759 1,626 239 Total 15,530 2,927 2,142 314 *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 September 30, 2020 GAAP Share-based Amortization of acquired Non-GAAP Result Compensation intangible assets Result --- Cost of revenues (58,472) 97 (58,375) Research and product development (16,008) 287 782 (14,939) Sales and marketing (49,869) 132 6,105 (43,632) General and administrative (69,769) 1,626 709 (67,434) Other operating income 7,803 7,803 Total operating expenses (127,843) 2,045 7,596 (118,202) Loss from operations (62,770) 2,142 7,596 (53,032) Net loss (62,056) 2,142 7,596 (52,318) Net loss attributable to ordinary shareholders (56,904) 2,142 7,596 (47,166) Net loss per ordinary share attributable to ordinary (0.15) (0.13) shareholders - basic and diluted Net loss per ADS - basic and diluted (0.45) (0.39) Weighted average number of ordinary shares used in 370,298,762 370,298,762 computing basic and diluted loss per share Quarter Ended June 30, 2020 GAAP Share-based Amortization of acquired Non-GAAP Result Compensation 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 shareholders (147,614) 2,927 16,406 (128,281) 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 September 30, 2019 GAAP Share-based Amortization of acquired Non-GAAP Result Compensation intangible assets Result --- Cost of revenues (472,040) 52 (471,988) Research and product development (64,310) 2,065 513 (61,732) Sales and marketing (239,973) 119 34,907 (204,947) General and administrative (138,456) 13,294 705 (124,457) Other operating income 5,406 5,406 Total operating expenses (437,333) 15,478 36,125 (385,730) Loss from operations (56,856) 15,530 36,125 (5,201) Net (Loss)/Income (12,621) 15,530 36,125 39,034 Net (Loss)/Income attributable to ordinary shareholders (13,472) 15,530 36,125 38,183 Net (loss)/income per ordinary share attributable to ordinary shareholders (RMB) -Basic (0.04) 0.10 -Diluted (0.04) 0.10 Net (loss)/income per ADS (RMB) -Basic (0.12) 0.30 -Diluted (0.12) 0.30 Weighted average number of ordinary shares -Basic 369,559,765 369,559,765 -Diluted 369,559,765 379,770,193 *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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