BEST Inc. Announces Unaudited Third Quarter 2021 Financial Results

HANGZHOU, China, Nov. 16, 2021 /PRNewswire/ — BEST Inc. (NYSE: BEST) («BEST» or the «Company»), a leading integrated smart supply…

HANGZHOU, China, Nov. 16, 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 September 30, 2021.

Johnny Chou, Founder, Chairman and Chief Executive Officer of BEST, commented, «In the third quarter, we remained steadfast in driving the Company’s realignment around our core competencies and unlocking value for our shareholders. As we proceed with our transaction with J&T Express Co., Ltd. (J&T Express China), we are excited about our roadmap ahead to deliver integrated supply chain, freight and global logistics services for our customers.»

«Against a challenging backdrop with COVID-19 flare ups, we continued to enhance Best Freight’s business capabilities of serving e-commerce customers and leveraging synergies with our Supply Chain Management. Supply Chain Management further strengthened its operations by prioritizing higher margin customers, expanding the OFCs network and leveraging our technologies to deliver quality services. On the Global front, our cross-border and local business in the Southeast Asia region continued to press forward, achieving a 78.7% year-over-year increase in parcel volume for the quarter despite the ongoing pandemic.»

«Looking forward, we will continue to synergize among our business units in a strategic, value-creating way and further enhance our integrated logistic service offerings to capture the enormous growth opportunities from e-commerce and the booming demand for integrated supply chain services.»

Gloria Fan, BEST’s Chief Financial Officer, added, «Revenue for the quarter was RMB6.8 billion, a decrease of 14.6% year over year, as market dynamics weighed on the volume and average selling price for Express and Freight. Our balance of cash and cash equivalents, restricted cash and short-term investments were RMB3.4 billion at the end of the third quarter of 2021. The strategic transaction with J&T Express China will significantly improve our liquidity and provide us with financial flexibility to reduce leverage and increase investments, laying a solid foundation for us to return to profitability and a growth trajectory.»

FINANCIAL HIGHLIGHTS[1]

For the Quarter Ended September 30, 2021:

  • Revenue was RMB6,812.4 million (US$1,057.3 million), a decrease of 14.6% year-over-year («YoY»). The decrease was primarily due to a decrease in average selling price («ASP») in Express and Freight business segments.
  • Gross Loss was RMB505.1 million (US$78.4 million), compared to gross loss of RMB58.5 million in the same period of 2020. Gross Loss Margin was 7.4%, decreased by 6.7 percentage points («ppts») YoY.
  • Net Loss was RMB654.9 million (US$101.6 million), compared to a net loss of RMB565.9 million in the same period of 2020. Non-GAAP Net Loss[2] [3] was RMB684.2 million (US$106.2 million), compared to non-GAAP net loss of RMB541.9 million in the same period of 2020.
  • Diluted EPS[4] was negative RMB1.65 (US$0.26), compared to negative RMB1.45 in the same period of 2020. Non-GAAP Diluted EPS[3] [4] was negative RMB1.73 (US$0.27), compared to negative RMB1.39 in the same period of 2020.
  • EBITDA[5] was negative RMB451.8 million (US$70.1 million), compared to negative RMB392.6 million in the same period of 2020. Adjusted EBITDA[3][5] was negative RMB481.1 million (US$74.7 million), compared to negative RMB369.5 million in the same period of 2020.

BUSINESS HIGHLIGHTS[6]

BEST Express – During the quarter, parcel volume decreased by 10.9% YoY to 2.1 billion. Gross margin contracted by 7.6 ppts due to a decline in ASP per parcel of 12.0% YoY, partially offset by a decrease in average cost per parcel of 5.5% YoY despite higher oil prices and rising labor costs. 

On October 29, 2021, the Company announced to sell its express delivery business in China (the «Business») to J&T Express China, at approximately RMB6.8 billion (US$1.1 billion) enterprise value. The sale does not include any of BEST’s other businesses, namely, Supply Chain Management, Freight, UCargo and Global. The consideration to be paid for the Business is subject to certain adjustments and conditions under the terms of a definitive agreement entered into by the parties. This sale is subject to certain closing conditions and applicable regulatory approvals, and is currently expected to close in the first quarter of 2022.

BEST Freight – During the quarter, the Company continued its effort to grow its e-commerce related transactions. The e-commerce business accounted for 20.4% of total volume compared with 15.9% in the third quarter of 2020.  Freight volume decreased by 1.5% YoY and its gross margin was negative 5.4% in the quarter; 6.7 ppts lower YoY primarily due to a 7.5% YoY decline in ASP, offset by a 1.3% YoY decrease in average cost per tonne.

BEST Supply Chain Management – Supply Chain Management remained focused on projects with higher margins and clients with strong credit profiles, while continuing to expand franchised cloud OFC network. The total number of orders fulfilled by Cloud OFCs increased by 1.4% YoY to 103.6 million in the third quarter of 2021, of which the total number of orders fulfilled by franchised Cloud OFCs increased by 27.1% YoY to 68.0 million. The number of franchised OFCs increased by 1.7% YoY to 351.

BEST Global – Global maintained its robust growth in Southeast Asia with improved margin. Despite the continued impact from COVID-19, parcel volume in Southeast Asia increased by 78.7% to 37.1 million in the third quarter of 2021, with growth rate of 123.0%, 933.2% and 264.5% YoY in Thailand, Malaysia and Cambodia respectively. Global’s gross margin rose by 4.1 ppts YoY, primarily driven by our growing economies of scale.

Others For UCargo, as of September 30, 2021, the number of registered drivers on the UCargo mobile app increased by 40.2% YoY to 404,336.

[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.   

Key Operational Metrics


Three Months Ended

% Change YoY

 

 

Express Parcel Volume (in ‘000)

September

30, 2019


September

30, 2020


September 30,

2021


2020 vs

2019


2021 vs

2020

1,890,842

2,359,773

2,103,200

24.8%

-10.9%

Freight Volume (Tonne in ‘000)

1,885

2,464

2,427


30.7%

-1.5%

Supply Chain Management

Orders Fulfilled (in ‘000)

86,371

102,171

103,638


18.3%

1.4%

Global Parcel Volume in

Southeast Asia (in ‘000)

2,607


20,754


37,082


696.0%


78.7%

UCargo Number of

Transactions (in ‘000)

170

233


218


37.2%


-6.5%

FINANCIAL RESULTS

For the Quarter Ended September 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



September 30, 2020


September 30, 2021



(In ‘000,

except for %)

RMB

% of Revenue


RMB

US$

% of

Revenue


% Change

YoY

Express

5,090,682

63.8%


3,988,291

618,973

58.5%


(21.7 %)

Freight

1,492,965

18.7%


1,358,305

210,806

19.9%


(9.0%)

Supply Chain

Management

452,691

5.7%


400,551

62,165

5.9%


(11.5 %)

Global

216,017

2.7%


298,267

46,290

4.4%


38.1%

Others[7]

723,784

9.1%


766,969

119,032

11.3%


6.0%

Total Revenue

7,976,139

100.0%


6,812,383

1,057,266

100.0%


(14.6%)

 

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

  • Express Service Revenue decreased by 21.7% YoY to RMB3,988.3 million (US$619.0 million) from RMB5,090.7 million, primarily due to a 12.0% YoY decrease in ASP per parcel and a 10.9% YoY decrease in parcel volume. The decreases were primarily attributable to competitive market dynamics.
  • Freight Service Revenue decreased by 9.0% YoY to RMB1,358.3 million (US$210.8 million) from RMB1,493.0 million, primarily due to a 7.5% decrease in ASP per tonne and a 1.5% YoY decrease in freight volume.
  • Supply Chain Management Service Revenue decreased by 11.5% YoY to RMB400.6 million (US$62.2 million) from RMB452.7 million, primarily due to discontinuation of service to certain low-margin legacy customers, partially offset by a 1.4% YoY increase in the total number of orders fulfilled by Cloud OFCs.
  • Global Service Revenue increased by 38.1% YoY to RMB298.3 million (US$46.3 million) from RMB216.0 million, primarily due to strong growth in parcel volumes in Southeast Asia.
  • Others Services Revenue increased by 6.0% YoY to RMB767.0 million (US$119.0 million) from RMB723.8 million.

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


September 30, 2020


September 30, 2021


(In ‘000, except for %)

RMB

% of

Revenue


RMB

US$

% of

Revenue


Express

(5,205,390)

102.3%


(4,384,494)

(680,463)

109.9%


7.6ppts

Freight

(1,473,252)

98.7%


(1,431,988)

(222,241)

105.4%


6.7ppts

Supply Chain

Management

(432,945)

95.6%


(385,443)

(59,820)

96.2%


0.6ppts

Global

(239,653)

110.9%


(318,420)

(49,418)

106.8%


(4.1ppts)

Others

(683,361)

94.4%


(797,136)

(123,714)

103.9%


9.5ppts

Total Cost of Revenue

(8,034,601)

100.7%


(7,317,481)

(1,135,656)

107.4%


6.7ppts

Cost of Revenue was RMB7,317.5 million (US$1,135.7 million) or 107.4% of revenue in the third quarter of 2021, compared to RMB8,034.6 million or 100.7% of revenue in the same quarter of 2020. The increase of 6.7 ppts in cost of revenue as a percentage of revenue was primarily attributable to a decrease in ASP which was partially offset by reduced 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)

September 30, 2020

September 30, 2021


YoY

Express:





Average Cost Per Parcel

2.21

2.08


(5.5%)

Average Transportation Cost Per Parcel

0.65

0.59


(9.2%)

Average Labor Cost Per Parcel

0.18

0.21


16.7%

Average Lease Cost Per Parcel

0.10

0.11


10.0%

Average Other Cost Per Parcel

0.10

0.06


(40.0%)

Average Last-mile Cost Per Parcel

1.18

1.11


(5.9%)

Freight:





Average Cost Per Tonne

597.8

590.0


(1.3%)

Gross Loss was RMB505.1 million (US$78.4 million) in the third quarter of 2021, compared to gross loss of RMB58.5 million in the same period of 2020. Gross Loss Margin was 7.4%. 

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




September 30, 2020


September 30, 2021


(In ‘000, except for %)

RMB

% of Revenue


RMB

US$

% of

Revenue


% of Revenue

Change

YoY

Selling, General and 

   Administrative Expenses

(453,463)

5.7%


(423,424)

(65,714)

6.2%


0.5ppts

   Adjusted for

  
SBC Expenses

(30,145)

0.4%


(26,984)

(4,188)

0.4%


0.0ppts

Adjusted Selling, General

   and Administrative
 

  
Expenses

(423,318)

5.3%


(396,440)

(61,526)

5.8%


0.5ppts

Research and Development 

   Expenses

(44,935)

0.5%


(61,159)

(9,492)

0.9%


0.4ppts

    Adjusted for SBC Expenses

(2,135)

0.0%


(2,056)

(319)

0.0%


0.0ppts

Adjusted Research and

   Development
 Expenses

(42,800)

0.5%


(59,103)

(9,173)

0.9%


0.4ppts

Total Operating Expenses

(498,398)

6.2%


(484,583)

(75,206)

7.1%


0.9ppts

   Adjusted for SBC 

   Expenses

(32,280)

0.4%


(29,040)

(4,507)

0.4%


0.0ppts

Adjusted Total Operating 

  
Expenses

(466,118)

5.8%


(455,543)

(70,699)

6.7%


0.9ppts

Selling, General and Administrative («SG&A») Expenses were RMB423.4 million (US$65.7 million) or 6.2% of revenue in the third quarter of 2021, compared to RMB453.5million or 5.7% of revenue in the same quarter of 2020.

Research and Development («R&D») Expenses were RMB61.2 million (US$9.5 million) or 0.9% of revenue in the third quarter of 2021, compared to RMB44.9 million, or 0.5% of revenue in the same quarter of 2020. The increase in research and development expenses was due to increased employee compensation and benefits.

Share-based Compensation («SBC») Expenses included in the cost and expense items above in the third quarter of 2021 were RMB29.4 million (US$4.6 million), compared to RMB32.9 million in the same quarter of 2020. In the third quarter of 2021, RMB0.3 million (US$0.05 million) was allocated to cost of revenue, RMB1.9 million (US$0.3 million) was allocated to selling expenses, RMB25.1 million (US$3.9 million) was allocated to general and administrative expenses, and RMB2.1 million (US$0.3 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss 

Net Loss in the third quarter of 2021 was RMB654.9 million (US$101.6 million), compared to a net loss of RMB565.9 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 third quarter of 2021 was RMB684.2 million (US$106.2 million), compared to non-GAAP net loss of RMB541.9 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 September 30, 2021 by segment.

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


Three Months Ended September 30, 2021

(In RMB’000)

Express

Freight

Supply Chain

Global

Others

Unallocated[8]

Total

Non-GAAP Net Income/(Loss)

(471,332)

(157,155)

(24,909)

(66,801)

(84,104)

120,150

(684,151)


 

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

Diluted EPS and Non-GAAP Diluted EPS

Diluted EPS in the third quarter of 2021 was negative RMB1.65 (US$0.26), based on a weighted average of 388.5 million diluted shares outstanding during the quarter. This is compared to negative RMB1.45 on a weighted average of 385.4 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 third quarter of 2021 was negative RMB1.73 (US$0.27), compared to negative RMB1.39 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 third quarter of 2021 was negative RMB481.1million (US$74.7 million), compared to negative RMB369.5 million in same quarter of 2020. Adjusted EBITDA Margin was negative 7.1% in the third quarter of 2021, compared to negative 4.6% 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 September 30, 2021 by segment.

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


Three Months Ended September 30, 2021



(In RMB’000)

Express

Freight

Supply Chain

Global

Others

Unallocated[9]

Total


Adjusted EBITDA

(348,474)

(140,422)

(15,984)

(61,820)

(78,491)

164,055

(481,136)


Adjusted EBITDA Margin

(8.7%)

(10.3%)

(4.0%)

(20.7%)

(10.2%)

(7.1%)


 

[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 September 30, 2021, cash and cash equivalents, restricted cash and short-term investments were RMB3,378.3 million (US$524.3 million), compared to RMB3,413.3 million as of June 30, 2021. The decrease in cash and cash equivalents, restricted cash and short-term investments was primarily due to net cash used in operations.

Net Cash Used in Operating Activities

Net cash used in continuing operating activities was RMB1,157.2 million (US$179.6 million), compared to net cash generated from continuing operating activities of RMB140.9 million in the same period of 2020, mainly due to decreased ASP for Express and Freight business segments.

Capital Expenditures («CAPEX»)

CAPEX was RMB116.9 million (US$18.1million), or 1.7% of total revenue in the third quarter ended September 30, 2021, compared to CAPEX of RMB484.3 million, or 6.1% of total revenue, in the same period of 2020.

SHARES OUTSTANDING

As of the date of this press release, the Company had approximately 388.7 million ordinary shares outstanding[10]. Each American Depositary Share represents one Class A ordinary share.

[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.

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.

WEBCAST AND CONFERENCE CALL INFORMATION

The Company will hold a conference call at 8:00 pm U.S. Eastern Time on November 16, 2021 (9:00 am Beijing Time on November 17, 2021), to discuss its financial results and operating performance for the third 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:

4267111

A replay of the conference call will be accessible through November 23, 2021 by dialing the following numbers:

United States:

+1-877-344-7529

International:

+1-412-317-0088

Replay Access Code:

10161418

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 September 30,

Nine Months Ended September 30,


2020

2021

2020

2021


RMB

RMB

US$

RMB

RMB

US$

Revenue







Express

5,090,682

3,988,291

618,973

13,631,990

11,982,738

1,859,692

Freight

1,492,965

1,358,305

210,806

3,551,074

3,931,359

610,137

Supply Chain Management

452,691

400,551

62,165

1,369,991

1,327,767

206,066

Global

216,017

298,267

46,290

524,305

863,291

133,981

Others

723,784

766,969

119,032

1,662,310

2,578,565

400,187

Total Revenue

7,976,139

6,812,383

1,057,266

20,739,670

20,683,720

3,210,063

Cost of Revenue







Express

(5,205,390)

(4,384,494)

(680,463)

(13,570,902)

(12,854,832)

(1,995,039)

Freight

(1,473,252)

(1,431,988)

(222,241)

(3,532,534)

(3,971,496)

(616,367)

Supply Chain Management

(432,945)

(385,443)

(59,820)

(1,297,689)

(1,245,479)

(193,295)

Global

(239,653)

(318,420)

(49,418)

(602,511)

(912,119)

(141,559)

Others

(683,361)

(797,136)

(123,714)

(1,547,948)

(2,542,866)

(394,647)

Total Cost of Revenue

(8,034,601)

(7,317,481)

(1,135,656)

(20,551,584)

(21,526,792)

(3,340,907)

Gross (Loss)/ Profit

(58,462)

(505,098)

(78,390)

188,086

(843,072)

(130,844)

Selling Expenses

(120,783)

(119,255)

(18,508)

(352,935)

(340,702)

(52,876)

General and Administrative

   Expenses

(332,680)

(304,169)

(47,206)

(888,483)

(957,807)

(148,649)

Research and Development

   Expenses

(44,935)

(61,159)

(9,492)

(137,629)

(175,798)

(27,283)

Total Operating Expenses

(498,398)

(484,583)

(75,206)

(1,379,047)

(1,474,307)

(228,808)

Loss from Operations

(556,860)

(989,681)

(153,596)

(1,190,961)

(2,317,379)

(359,652)

Interest Income

18,106

11,188

1,736

58,106

44,736

6,943

Interest Expense

(46,583)

(48,731)

(7,563)

(121,134)

(142,903)

(22,178)

Foreign Exchange

   (Loss)/Gain

(7,577)

1,081

168

(7,335)

653

101

Other Income

40,211

391,630

60,780

109,430

738,181

114,564

Other Expense

(6,187)

(19,280)

(2,992)

(22,269)

(47,355)

(7,349)

Loss before Income Tax

   and Share of Net Loss

   of Equity Investees

(558,890)

(653,793)

(101,467)

(1,174,163)

(1,724,067)

(267,571)

Income Tax Expense

(6,997)

(1,051)

(163)

(15,856)

(2,698)

(419)

Loss before Share of Net

   loss of Equity Investees

(565,887)

(654,844)

(101,630)

(1,190,019)

(1,726,765)

(267,990)

Share of Net Loss of Equity

   Investees

(40)

(16)

(2)

(114)

(58)

(9)

Net Loss from continuing

   operations

(565,927)

(654,860)

(101,632)

(1,190,133)

(1,726,823)

(267,999)

Net (loss)/income from

   discontinued operations

(73,582)

4,025

624

(231,027)

(8,804)

(1,365)

Net Loss

(639,509)

(650,835)

(101,008)

(1,421,160)

(1,735,627)

(269,364)

Net Loss from continuing

   operations attributable to

   non-controlling interests

(5,959)

(12,623)

(1,959)

(20,390)

(23,552)

(3,655)

Net Loss attributable to

   Best Inc.

(633,550)

(638,212)

(99,049)

(1,400,770)

(1,712,075)

(265,709)

 

 

Summary of Unaudited Condensed Consolidated Balance Sheets

(In Thousands)



As of December 31, 2020


As of September 30, 2021


RMB


RMB

US$

Assets





Current Assets





Cash and Cash Equivalents

1,383,317


966,026

149,925

Restricted Cash

2,102,426


1,902,703

295,295

Accounts and Notes Receivables

983,601


903,947

140,290

Inventories

44,133


33,963

5,271

Prepayments and Other Current

Assets

3,304,670


3,246,803

503,896

Short–term Investments

268,647


3,233

502

Amounts Due from Related Parties

274,395


146,798

22,783

Lease Rental Receivables

497,127


378,811

58,791

Assets held for sale

509,395


496,811

77,104

Total Current Assets

9,367,711


8,079,095

1,253,857

Non–current Assets





Property and Equipment, Net

4,079,235


4,314,550

669,608

Intangible Assets, Net

12,198


10,217

1,586

Long–term Investments

221,426


174,171

27,031

Goodwill

295,758


295,758

45,901

Non–current Deposits

129,645


130,987

20,329

Other Non–current Assets

543,949


249,748

38,760

Restricted Cash

709,848


506,317

78,579

Lease Rental Receivables

647,678


311,006

48,267

Operating Lease Right-of-use Assets

3,863,375


3,726,884

578,403

Total non–current Assets

10,503,112


9,719,638

1,508,464

Total Assets

19,870,823


17,798,733

2,762,321

Liabilities and Shareholders’ Equity





Current Liabilities 





Securitization Debt

95,149


168,312

26,122

Secured Borrowings


171,658

26,641

Convertible Senior Notes held by

related parties


642,825

99,765

Convertible Senior Notes held by third

parties


642,825

99,765

Short–term Bank Loans

3,082,537


1,728,990

268,335

Accounts and Notes Payable

4,144,948


3,840,533

596,041

Income Tax Payable

14,550


1,029

160

Customer Advances and Deposits and

   Deferred Revenue

1,526,051


1,402,773

217,707

Accrued Expenses and Other

Liabilities

2,507,917


2,908,613

451,410

Financing Lease Liabilities

1,581


1,374

213

Operating Lease Liabilities

1,032,461


1,079,335

167,510

Amounts Due to Related Parties

35,623


619,616

96,163

Liabilities held for sale

193,432


205,754

31,933

Total Current Liabilities

12,634,249


13,413,637

2,081,765

 

 

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

(In Thousands)



As of December 31, 2020


As of September 30, 2021


RMB


RMB

US$

Non-current Liabilities





Convertible Senior Notes held by

   related parties

1,617,846


971,042

150,703

Secured Borrowings


109,466

16,989

Convertible Senior Notes held by third

   parties

642,121


Operating Lease Liabilities

2,995,173


2,850,987

442,466

Financing Lease Liabilities

2,698


1,695

263

Other Non–current Liabilities

175,584


121,353

18,834

Long-term Bank Loans

78,548


75,918

11,782

Total Non–current Liabilities

5,511,970


4,130,461

641,037

Total Liabilities

18,146,219


17,544,098

2,722,802

Mezzanine Equity:





Convertible Non-controlling Interests


184,421

28,622

Total mezzanine equity


184,421

28,622

Shareholders’ Equity





Ordinary Shares

25,988


25,988

4,033

Treasury Shares

(211,352)


(126,190)

(19,584)

Additional Paid–In Capital

19,487,232


19,490,101

3,024,816

Statutory Reserves

8,038


5,103

792

Accumulated Deficit

(17,710,964)


 (19,420,104)[11]

(3,013,953)

Accumulated Other

   Comprehensive Income

151,677


135,637

21,051

BEST Inc. Shareholders’ Equity

1,750,619


110,535

17,155

Non-controlling Interests

(26,015)


(40,321)

(6,258)

Total Shareholders’ Equity

1,724,604


70,214

10,897

Total Liabilities, Mezzanine Equity

   and Shareholders’
 Equity

19,870,823


17,798,733

2,762,321

 

[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 RMB9,926,297

 

Summary of Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands) 



 

Three Months Ended September 30,

 

Nine Months Ended September 30,


2020

2021

2020

2021


RMB

RMB

US$

RMB

RMB

US$

Net cash generated from/(used in)

   continuing operating activities

140,915

(1,157,227)

(179,599)

(335,749)

(1,848,381)

(286,864)

Net cash used in discontinued

   operating activities

(25,564)

(1,019)

(158)

(119,807)

(59,408)

(9,220)

Net cash generated from/(used in)

   operating activities

115,351

(1,158,246)

(179,757)

(455,556)

(1,907,789)

(296,084)

Net cash (used in)/generated from

   continuing investing activities

(540,706)

1,054,911

163,720

(709,472)

1,403,281

217,786

Net cash generated from/(used in) 

   discontinued Investing activities

1,047

646

(217)

(34)

Net cash (used in) /generated

   from investing activities

(539,659)

1,054,911

163,720

(708,826)

1,403,064

217,752

Net cash generated from/(used in) 

   continuing financing activities

421,217

59,389

9,217

1,933,283

(18,525)

(2,875)

Net cash used in discontinued

   financing activities

(50,000)

(195,000)

(280,000)

(43,455)

Net cash generated from /(used

   in) financing activities

371,217

59,389

9,217

1,738,283

(298,525)

(46,330)

Exchange Rate Effect on Cash,

   Cash Equivalents, and Restricted

   Cash

(106,521)

3,895

604

(81,332)

(26,520)

(4,116)

Net (decrease)/increase in Cash

   and Cash Equivalents, and

   Restricted Cash

(159,612)

(40,051)

(6,216)

492,569

(829,770)

(128,778)

Cash and Cash Equivalents, and

   Restricted Cash at Beginning of
 

   Period

4,609,396

3,419,402

530,683

3,957,215

4,209,121

653,245

Cash and Cash Equivalents, and

   Restricted Cash at End of

  
 Period

4,449,784

3,379,351

524,467

4,449,784

3,379,351

524,467

Less: Cash and Cash Equivalents,

   and Restricted Cash held for

   sales at end of the Period

1,404

4,305

668

1,404

4,305

668

Cash and Cash Equivalents, and

   Restricted Cash from

   continuing operations at End of
 

   Period

4,448,380

3,375,046

523,799

4,448,380

3,375,046

523,799

 

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 September 30, 2021

(In RMB’000)

Express

Freight

Supply Chain

Global

Others

Unallocated[12]

Total

Net (Loss)/Profit

(473,788)

(160,060)

(27,069)

(68,869)

(84,829)

159,755

(654,860)

Add:








Depreciation &

Amortization

122,858

16,733

9,055

4,981

4,431

6,363

164,421

Interest Expense

48,731

48,731

Income Tax

(Benefit)/Expense

(130)

1,182

(1)

1,051

Subtract:








Interest Income

(11,188)

(11,188)

EBITDA

(350,930)

(143,327)

(18,144)

(63,888)

(79,216)

203,660

(451,845)

Add:








   Share-based

  
Compensation

   Expenses

2,456

2,905

2,160

2,068

725

19,038

29,352

Subtract:








Gain from

appreciation of

investments

(58,643)

(58,643)

Adjusted EBITDA

(348,474)

(140,422)

(15,984)

(61,820)

(78,491)

164,055

(481,136)

Adjusted EBITDA

Margin

(8.7%)

(10.3%)

(4.0%)

(20.7%)

(10.2%)

(7.1%)


 

 


Three Months Ended September 30, 2020

(In RMB’000)

Express

Freight

Supply Chain

Global

Others

Unallocated[13]

Total

Net Loss

(291,365)

(56,027)

(39,729)

(66,984)

(35,077)

(76,745)

(565,927)

Add:








Depreciation &

Amortization

98,294

16,357

10,120

4,320

1,773

7,005

137,869

Interest Expense

46,583

46,583

Income Tax

Expense/(Benefit)

1,616

(273)

5,654

6,997

Subtract:








Interest Income

(18,106)

(18,106)

EBITDA

(191,455)

(39,670)

(29,609)

(62,937)

(27,650)

(41,263)

(392,584)

Add:








   Share-based

  
Compensation

   Expenses

3,712

2,702

2,948

2,238

935

20,374

32,909

Subtract:








Gain from

appreciation of

investments

(9,838)

(9,838)

Adjusted EBITDA

(187,743)

(36,968)

(26,661)

(60,699)

(26,715)

(30,727)

(369,513)

Adjusted EBITDA

Margin

(3.7%)

(2.5%)

(5.9%)

(28.1%)

(3.7%)

(4.6%)


 

[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 September 30, 2021

(In RMB’000)

Express

Freight

Supply Chain

Global

Others

Unallocated[14]

Total

Net (Loss)/Profit

(473,788)

(160,060)

(27,069)

(68,869)

(84,829)

159,755

(654,860)

Add:








   Share-based

  
Compensation

   Expenses

2,456

2,905

2,160

2,068

725

19,038

29,352

Subtract:








Gain from

appreciation of

investments

(58,643)

(58,643)

Non-GAAP Net

(Loss)/Profit

(471,332)

(157,155)

(24,909)

(66,801)

(84,104)

120,150

(684,151)

Non-GAAP Net

(Loss)/Profit

Margin

(11.8%)

(11.6%)

(6.2%)

(22.4%)

(11.0%)

(10.0%)


 


Three Months Ended September 30, 2020

(In RMB’000)

Express

Freight

Supply Chain

Global

Others

Unallocated[15]

Total

Net Profit/(Loss)

(291,365)

(56,027)

(39,729)

(66,984)

(35,077)

(76,745)

(565,927)

Add:








   Share-based

   
Compensation

   Expenses

3,712

2,702

2,948

2,238

935

20,374

32,909

   Amortization of

  
Intangible Assets

  
Resulting from

  
Business

916

916

Subtract:








Gain from

appreciation of

investments

(9,838)

(9,838)

Non-GAAP Net

Profit/(Loss)

(287,653)

(53,325)

(36,781)

(63,830)

(34,142)

(66,209)

(541,940)

Non-GAAP Net

Profit/(Loss)

Margin

(5.7%)

(3.6%)

(8.1%)

(29.5%)

(4.7%)

(6.8%)


 

[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 September 30,


Nine Months Ended September 30,


2021

2021

(In ‘000)

RMB

US$


RMB

US$

Net Loss Attributable to Ordinary

   Shareholders

(642,237)

(99,673)


(1,703,271)

(264,344)

Add:






Share-based Compensation

   Expenses

29,352

4,556


90,052

13,976

Subtract:






Gain from appreciation of

   investments

(58,643)

(9,101)


(64,205)

(9,964)

Non-GAAP Net Loss Attributable to

   Ordinary Shareholders for

   Computing Non-GAAP Diluted

   EPS

(671,528)

(104,218)


(1,677,424)

(260,332)

Weighted Average Diluted Shares

   Outstanding During the Period






Diluted

388,538,709

388,538,709


387,814,480

387,814,480

Diluted (Non-GAAP)

388,538,709

388,538,709


387,814,480

387,814,480

Diluted EPS

(1.65)

(0.26)


(4.39)

(0.68)

Add:






Non-GAAP adjustment to net

   loss per share

(0.08)

(0.01)


0.06

0.01

Non-GAAP Diluted EPS

(1.73)

(0.27)


(4.33)

(0.67)

 

 

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