TUNIU CORPORATION Net Revenues in Q2 2017 Increased by 53.8% Year-Over-Year
Gross Profit in Q2 2017 Increased by 84.5% Year-Over-Year
NANJING, China, Aug. 16, 2017 /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, 2017.
Highlights for the Second Quarter of 2017
-- Net revenues in the second quarter of 2017 increased by 53.8%
year-over-year, compared with Non-GAAP([1]) net revenues, to RMB460.1
million (US$67.9 million([2])).
-- Revenues from packaged tours in the second quarter of 2017 increased by
57.7% year-over-year, compared with Non-GAAP revenues from packaged
tours, to RMB339.3 million (US$50.1 million).
-- Gross profit in the second quarter of 2017 increased by 84.5%
year-over-year, compared with Non-GAAP gross profit, to RMB240.6 million
(US$35.5 million).
[1] The section below entitled "About Non-GAAP Financial Measures" provides information about the use of Non-GAAP
financial measures in this press release, and the attached "Reconciliations of GAAP and Non-GAAP Results" at the end of
this press release reconciles Non-GAAP financial information with the Company's financial results under GAAP.
[2] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of
US$1.00=RMB6.7793 on June 30, 2017 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and
available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.
Comparison of Revenues
We adopted ASC 606 new revenue standard effective January 1, 2017 by applying the full retrospective method. To increase comparability of operating results and help investors better understand our business performance and operating trends, we have provided the following comparison between revenues, cost of revenues and gross profit for the second quarter of 2017 and the relevant Non-GAAP adjusted data for corresponding period in 2016:
(in thousands
RMB) Quarter Ended Quarter Ended % of change
June 30, 2016 June 30, 2017
--- ------------- -------------
Revenues
--------
Packaged tours 215,105 339,304 57.7%
-------------- ------- ------- ----
Others 87,747 120,784 37.7%
------ ------ ------- ----
Total revenues 302,852 460,088 51.9%
-------------- ------- ------- ----
Net revenues 299,097 460,088 53.8%
------------ ------- ------- ----
Cost of
revenues (168,679) (219,530) 30.1%
--------- -------- -------- ----
Gross profit 130,418 240,558 84.5%
------------ ------- ------- ----
Additional information regarding our Non-GAAP definition and reconciliations of GAAP and Non-GAAP results are provided at the end of this announcement.
Mr. Donald Yu, Tuniu's co-founder, Chairman and Chief Executive Officer, said, "We are pleased to report a strong quarter of performance for the second quarter of 2017. Net revenues increased by 54% year-over-year while gross profit increased by over 84% year-over-year. Tuniu already holds the largest share of the market, yet we are able to continue strengthening our leading position relative to our peers. In 2014, we launched our direct procurement initiative and accumulated years of experience in inventory management and procurement. This expertise will be valuable going forward as we place a greater emphasis on our direct procurement strategy."
Mr. Alex Yan, Tuniu's co-founder, President and Chief Operating Officer, said, "During the quarter, both air ticketing and hotel booking grew organically beyond expectations. Our relationships with suppliers have strengthened and deepened. With the establishment of these relationships, we have been able to synergize these products with our core leisure travel packages, in particular our self-guided tours."
Mr. Conor Yang, Tuniu's Chief Financial Officer, said, "During the quarter, we were able to continue narrowing our losses. Our operating expenses decreased both on an absolute basis and as a percentage of revenue. As we realize the benefits of economies of scale in areas such as branding and technology, we will work on further improvements to our profitability."
Second Quarter 2017 Results
Net revenues were RMB460.1 million (US$67.9 million) in the second quarter of 2017, representing a year-over-year increase of 53.8%, compared with Non-GAAP net revenues, from the corresponding period in 2016.
-- Revenues from packaged tours, substantially all of which are recognized
on a net basis, were RMB339.3 million (US$50.1 million) in the second
quarter of 2017, representing a year-over-year increase of 57.7%,
compared with Non-GAAP revenues from packaged tours, from the
corresponding period in 2016. The increase was primarily due to the
growth of organized tours and self-guided tours.
-- Other revenues, were RMB120.8 million (US$17.8 million) in the second
quarter of 2017, representing a year-over-year increase of 37.7%,
compared with Non-GAAP other revenues, from the corresponding period in
2016. The increase was due to a rise in revenue generated from financial
services and commission fees received from other travel-related
products, such as transportation ticketing and accommodation
reservation.
Cost of revenues was RMB219.5 million (US$32.4 million) in the second quarter of 2017, representing a year-over-year increase of 30.1%, compared with Non-GAAP cost of revenues, from the corresponding period in 2016. As a percentage of net revenues, cost of revenues was 47.7% in the second quarter of 2017, compared to 56.4% as a percentage of Non-GAAP net revenues in the corresponding period in 2016.
Gross profit was RMB240.6 million (US$35.5 million) in the second quarter of 2017, representing a year-over-year increase of 84.5%, compared with Non-GAAP gross profit, from the corresponding period in 2016. The increase in gross profit and gross margin was primarily due to improved economies of scale, increased operational efficiency and optimized supply chain management.
Operating expenses were RMB529.2 million (US$78.1 million) in the second quarter of 2017, representing a year-over-year decrease of 41.1% from the corresponding period in 2016. Share-based compensation expenses and amortization of acquired intangible assets, which were allocated to operating expenses, were RMB57.9 million (US$8.5 million) in the second quarter of 2017. Non-GAAP operating expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets, were RMB471.2 million (US$69.5 million) in the second quarter of 2017, representing a year-over-year decrease of 44.1%.
-- Research and product development expenses were RMB146.6 million (US$21.6
million) in the second quarter of 2017, representing a year-over-year
increase of 3.8%. Non-GAAP research and product development expenses,
which excluded share-based compensation expenses and amortization of
acquired intangible assets of RMB2.2 million (US$0.3 million), were
RMB144.4 million (US$21.3 million) in the second quarter of 2017,
representing an increase of 3.5% from the corresponding period in 2016.
Research and product development expenses as a percentage of net
revenues were 31.9% in the second quarter of 2017, decreasing from 47.2%
as a percentage of Non-GAAP net revenues in the corresponding period in
2016. The decrease was primarily due to the increase in efficiency
resulting from economies of scale and implementation of new systems.
-- Sales and marketing expenses were RMB221.9 million (US$32.7 million) in
the second quarter of 2017, representing a year-over-year decrease of
64.3%. Non-GAAP sales and marketing expenses, which excluded share-based
compensation expenses and amortization of acquired intangible assets of
RMB34.6 million (US$5.1 million), were RMB187.3 million (US$27.6
million) in the second quarter of 2017, representing a year-over-year
decrease of 68.2% from the corresponding period in 2016. Sales and
marketing expenses as a percentage of net revenues were 48.2% in the
second quarter of 2017, decreasing from 207.6% as a percentage of
Non-GAAP net revenues in the corresponding period in 2016. The decrease
was primarily due to the decline in brand promotion spending and
preference for marketing channels with higher ROI.
-- General and administrative expenses were RMB166.1 million (US$24.5
million) in the second quarter of 2017, representing a year-over-year
increase of 17.4%. Non-GAAP general and administrative expenses, which
excluded share-based compensation expenses and amortization of acquired
intangible assets of RMB21.2 million (US$3.1 million), were RMB144.9
million (US$21.4 million) for the second quarter of 2017, representing a
year-over-year increase of 21.4% from the corresponding period in 2016.
The increase was primarily due to an increase in expenses associated
with the Company's business and product category expansion. General and
administrative expenses as a percentage of net revenues were 36.1% in
the second quarter of 2017, decreasing from 47.3% as a percentage of
Non-GAAP net revenues in the corresponding period in 2016. The decrease
was primarily due to the increase in efficiency resulting from economies
of scale and optimization of administrative personnel.
Loss from operations was RMB288.6 million (US$42.6 million) in the second quarter of 2017, compared to a loss from operations of RMB769.9 million in the second quarter of 2016. Non-GAAP loss from operations, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB230.4 million (US$34.0 million) in the second quarter of 2017.
Net loss was RMB270.8 million (US$39.9 million) in the second quarter of 2017, compared to a net loss of RMB756.9 million in the second quarter of 2016. Non-GAAP net loss, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB212.6 million (US$31.4 million) in the second quarter of 2017.
Net loss attributable to ordinary shareholders was RMB270.6 million (US$39.9 million) in the second quarter of 2017, compared to a net loss attributable to ordinary shareholders of RMB754.2 million in the second quarter of 2016. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB212.4 million (US$31.3 million) in the second quarter of 2017.
As of June 30, 2017, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB4.5 billion (US$666.1 million).
Business Outlook
For the third quarter of 2017, Tuniu expects to generate RMB761.5 million to RMB787.7 million of net revenues, which represents 45% to 50% growth year-over-year compared with Non-GAAP net revenues in the corresponding period in 2016. 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 9:00 pm U.S. Eastern Time, on August 16, 2017, (9:00 am, Beijing/Hong Kong Time, on August 17, 2017) to discuss the second quarter 2017 financial results.
To participate in the conference call, please dial the following numbers:
US: +1-888-346-8982
Hong Kong: 800-905945
China: 4001-201203
International: +1-412-902-4272
Conference ID: Tuniu Corporation 2Q 2017
Earnings Call
A telephone replay will be available one hour after the end of the conference through August 23, 2017. The dial-in details are as follows:
US: +1-877-344-7529
International: +1-412-317-0088
Replay Access Code: 10111406
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 has over 1,800,000 stock keeping units (SKUs) of packaged tours, covering over 400 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. 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; 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 net revenue, cost of revenues, research and product development expenses, sales and marketing expenses, general and administrative expenses, operating expenses, loss from operations, net loss, net loss attributable to noncontrolling interests, net loss attributable to ordinary shareholders, net loss per ordinary share attributable to ordinary shareholders-basic and diluted and net loss per ADS, which excludes adjustment on net basis and timing of revenue recognition as in 2017, share-based compensation expenses and amortization 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 and amortization of acquired intangible assets is that share-based compensation expenses and amortization 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
Maria Xin
Vice President
Tuniu Corporation
Phone: +86-25-8685-3178
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, 2016 June 30, 2017 June 30, 2017
RMB RMB US$
--- --- ---
ASSETS
Current assets
Cash and cash equivalents 1,085,236 1,072,126 158,147
Restricted cash 124,561 120,404 17,761
Short-term investments 3,603,497 3,323,063 490,178
Accounts receivable, net 235,673 329,851 48,656
Amounts due from related parties 390,330 299,140 44,125
Prepayments and other current assets 1,632,329 1,005,555 148,327
Yield enhancement products and accrued 449,528 390,648 57,624
interest
Total current assets 7,521,154 6,540,787 964,818
--------- --------- -------
Non-current assets
Long term investment 58,764 73,764 10,881
Property and equipment, net 177,817 153,266 22,608
Intangible assets 592,267 534,272 78,809
Goodwill 147,639 147,639 21,778
Yield enhancement products over one year 562,643 383,000 56,496
and accrued interest
Other non-current assets 46,468 99,653 14,700
Long-term amounts due from related parties 64,902 - -
Total non-current assets 1,650,500 1,391,594 205,272
--------- --------- -------
Total assets 9,171,654 7,932,381 1,170,090
--------- --------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 1,022,704 1,170,809 172,704
Amounts due to related parties 32,526 77,786 11,474
Salary and welfare payable 192,455 171,152 25,246
Taxes payable 11,619 17,602 2,596
Advances from customers 1,806,493 1,412,644 208,376
Accrued expenses and other current liabilities 589,288 441,911 65,188
Amounts due to the individual investors of 871,914 682,245 100,636
yield enhancement products
Total current liabilities 4,526,999 3,974,149 586,220
--------- --------- -------
Non-current liabilities 54,928 52,049 7,678
------ ------ -----
Total liabilities 4,581,927 4,026,198 593,898
--------- --------- -------
Mezzanine equity
Redeemable noncontrolling interests 90,072 93,364 13,772
Shareholders' equity
Ordinary shares 242 242 36
Less: Treasury stock (19,708) (129,102) (19,044)
Additional paid-in capital 8,855,991 8,900,417 1,312,881
Accumulated other comprehensive income 400,925 333,299 49,164
Accumulated deficit (4,738,593) (5,294,666) (781,005)
---------- ---------- --------
Total Tuniu's shareholders' equity 4,498,857 3,810,190 562,032
Noncontrolling interests 798 2,629 388
--- ----- ---
Total Shareholders' equity 4,499,655 3,812,819 562,420
--------- --------- -------
Total liabilities and shareholders' equity 9,171,654 7,932,381 1,170,090
========= ========= =========
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, 2016 March 31, 2017 June 30, 2017 June 30, 2017
RMB RMB RMB US$
--- --- --- ---
Revenues
Packaged tours 2,346,341 355,948 339,304 50,050
Others 91,273 100,093 120,784 17,817
------ ------- ------- ------
Total revenues 2,437,614 456,041 460,088 67,867
Less: Business and related taxes (3,755) - - -
------ --- --- ---
Net revenues 2,433,859 456,041 460,088 67,867
Cost of revenues (2,305,606) (204,737) (219,530) (32,382)
---------- -------- -------- -------
Gross profit 128,253 251,304 240,558 35,485
------- ------- ------- ------
Operating expenses
Research and product development (141,259) (159,403) (146,598) (21,624)
Sales and marketing (620,871) (253,756) (221,888) (32,730)
General and administrative (141,463) (151,333) (166,098) (24,501)
Other operating income 5,451 5,223 5,421 800
Total operating expenses (898,142) (559,269) (529,163) (78,055)
-------- -------- -------- -------
Loss from operations (769,889) (307,965) (288,605) (42,570)
Other income/(expenses)
Interest income 20,942 22,954 23,006 3,394
Foreign exchange related gains/(losses), (8,285) (1,370) (923) (136)
net
Other (loss)/ income, net 193 429 (229) (34)
--- --- ---- ---
Loss before income tax expense (757,039) (285,952) (266,751) (39,346)
Income taxes (expense) /benefit 145 (1,406) (4,067) (600)
--- ------ ------ ----
Net loss (756,894) (287,358) (270,818) (39,946)
Less: Net loss attributable to noncontrolling (2,672) (751) (1,853) (273)
interests
Less: Net loss attributable to redeemable - 275 226 33
noncontrolling interests
Net loss attributable to Tuniu (754,222) (286,882) (269,191) (39,706)
Corporation
Accretion on redeemable noncontrolling - (1,356) (1,435) (212)
interest
Net loss attributable to ordinary (754,222) (288,238) (270,626) (39,918)
shareholders
Net loss (756,894) (287,358) (270,818) (39,946)
Other comprehensive loss:
Foreign currency translation adjustment, 119,928 (19,190) (48,436) (7,145)
net of nil tax
Comprehensive loss (636,966) (306,548) (319,254) (47,091)
======== ======== ======== =======
Loss per share
Net loss per ordinary share attributable to (1.99) (0.76) (0.72) (0.11)
ordinary shareholders - basic and diluted
Net loss per ADS - basic and diluted* (5.97) (2.28) (2.16) (0.33)
Weighted average number of ordinary 378,120,850 378,164,347 374,426,600 374,426,600
shares used in computing basic and diluted
loss per share
Share-based compensation expenses included are as follows?
Cost of revenues 182 321 296 44
Research and product development 1,289 1,783 1,752 258
Sales and marketing 328 477 427 63
General and administrative 21,532 23,139 20,407 3,010
Total 23,331 25,720 22,882 3,375
====== ====== ====== =====
*Each ADS represents three of the Company's ordinary shares.
Tuniu Corporation
Comparison with Non-GAAP data of corresponding periods
(All amounts in thousands, except per share information)
To increase comparability of operating results and help investors better understand our business performance and operating trends, we
have provided the following comparison of certain financial information for the second quarter of 2017 with relevant Non-GAAP adjusted
data for corresponding periods in 2016.
Quarter Ended Quarter Ended Quarter Ended Quarter Ended
June 30, 2016 March 31, 2017 June 30, 2017 June 30, 2017
RMB RMB RMB US$
--- --- --- ---
Net revenues 299,097 456,041 460,088 67,867
Gross profit 130,418 251,304 240,558 35,485
Operating expenses (842,288) (559,269) (529,163) (78,055)
Loss from operations (711,870) (307,965) (288,605) (42,570)
Net loss (698,875) (287,358) (270,818) (39,946)
Net loss attributable to ordinary shareholders (696,210) (288,238) (270,626) (39,918)
Net loss per ordinary share attributable to (1.84) (0.76) (0.72) (0.11)
ordinary shareholders - basic and diluted
Reconciliations of GAAP and Non-GAAP Results
(All amounts in thousands, except per share information)
Quarter Ended June 30,2017
--------------------------
GAAP Result Adjustment on net basis and timing of Share-based Amortization of acquired Non-GAAP
-----------
revenue recognition as in 2017 Compensation intangible assets Result
------------------------------ ------------ ----------------- ------
Net revenue 460,088 - - - 460,088
Cost of revenues (219,530) - 296 - (219,234)
Research and product development (146,598) - 1,752 399 (144,447)
Sales and marketing (221,888) - 427 34,163 (187,298)
General and administrative (166,098) - 20,407 793 (144,898)
Other operating income 5,421 - - 5,421
Total operating expenses (529,163) - 22,586 35,355 (471,222)
======== === ====== ====== ========
Loss from operations (288,605) - 22,882 35,355 (230,368)
Net loss (270,818) - 22,882 35,355 (212,581)
Net loss attributable to ordinary shareholders (270,626) - 22,882 35,355 (212,389)
Net loss per ordinary share attributable to (0.72) (0.57)
ordinary shareholders - basic and diluted
Net loss per ADS - basic and diluted (2.16) (1.71)
Quarter Ended March 31, 2017
----------------------------
GAAP Result Adjustment on net basis and timing of Share-based Amortization of acquired Non-GAAP
-----------
revenue recognition as in 2017 Compensation intangible assets Result
------------------------------ ------------ ----------------- ------
Net revenue 456,041 - - - 456,041
Cost of revenues (204,737) - 321 - (204,416)
Research and product development (159,403) - 1,783 399 (157,221)
Sales and marketing (253,756) - 477 34,163 (219,116)
General and administrative (151,333) - 23,139 827 (127,367)
Other operating income 5,223 - - - 5,223
Total operating expenses (559,269) - 25,399 35,389 (498,481)
======== === ====== ====== ========
Loss from operations (307,965) - 25,720 35,389 (246,856)
Net loss (287,358) - 25,720 35,389 (226,249)
Net loss attributable to ordinary shareholders (288,238) - 25,720 35,389 (227,129)
Net loss per ordinary share attributable to (0.76) (0.60)
ordinary shareholders - basic and diluted
Net loss per ADS - basic and diluted (2.28) (1.80)
Quarter Ended June 30, 2016
---------------------------
GAAP Result Adjustment on net basis and timing of Share-based Amortization of acquired Non-GAAP
-----------
revenue recognition as in 2017 Compensation intangible assets Result
------------------------------ ------------ ----------------- ------
Net revenue 2,433,859 (2,134,762) - - 299,097
Cost of revenues (2,305,606) 2,136,745 182 - (168,679)
Research and product development (141,259) - 1,289 399 (139,571)
Sales and marketing (620,871) (2,425) 328 34,110 (588,858)
General and administrative (141,463) - 21,532 621 (119,310)
Other operating income 5,451 - - - 5,451
Total operating expenses (898,142) (2,425) 23,149 35,130 (842,288)
======== ====== ====== ====== ========
Loss from operations (769,889) (442) 23,331 35,130 (711,870)
Net loss (756,894) (442) 23,331 35,130 (698,875)
Net loss attributable to noncontrolling interests (2,672) 7 - - (2,665)
Net loss attributable to ordinary shareholders (754,222) (449) 23,331 35,130 (696,210)
Net loss per ordinary share attributable to (1.99) (1.84)
ordinary shareholders - basic and diluted
Net loss per ADS - basic and diluted (5.97) (5.52)
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