BEST Inc. Announces Unaudited Third Quarter 2022 Financial Results


HANGZHOU, China, Nov. 17, 2022 /PRNewswire/ — BEST Inc. (NYSE: BEST) ("BEST" or the "Company"), a leading integrated smart supply chain solutions and logistics services provider in China and Southeast Asia ("SEA"), today announced its unaudited financial results for the third quarter ended September 30, 2022.

Johnny Chou, Founder, Chairman and CEO of BEST, commented, "Ongoing COVID-19 pandemic-related restrictions continued to impact the macro environment in China and SEA, weighing heavily on the logistics industry. Amid the challenging landscape, we delivered good progress in our core business lines. BEST Freight’s growth momentum picked up, showing volume increase both quarter over quarter and year over year. BEST Supply Chain Management ("SCM") delivered strong top line and bottom line results compared with the same quarter last year.

"In the third quarter of 2022, total Freight volume increased by 4.1% year over year.  Its revenue increased by 9.7% and gross loss narrowed by 58.3% compared with the second quarter of 2022.  BEST SCM achieved year-over-year revenue growth of 15.2% and its gross margin reached 7.2%, up 3.5 percentage points from the same quarter last year, narrowing SCM’s net loss by 64.3%.

"Southeast Asia market remained challenging in the third quarter. While continuing to improve service quality and efficiency, we focused on expanding small and medium enterprise customer coverage to reduce customer concentration. We also continued to synergize with SCM and Freight in developing cross-border and supply chain business in the region.  Despite the challenging environment, we remain bullish on long-term growth opportunities in SEA markets.

"Our efforts in cost reduction and service quality improvement across our business lines have helped us weather the storm. The measures we have taken make our ecosystem stronger and more resilient. Moving forward, we are confident that BEST’s strength in technology, domestic and global supply chain management as well as logistics capabilities will allow us to capture growth opportunities and create long-term value,"  concluded Mr. Chou.

Gloria Fan, BEST’s Chief Financial Officer, added, "Despite the headwinds, our third quarter performance was encouraging. Our total revenue for the quarter, excluding UCargo and Capital, decreased slightly by 2.3% year over year but we significantly narrowed our non-GAAP net loss by 16.0%, excluding the one-off gain recognized on selling assets in the third quarter of 2021. We maintained a healthy balance sheet with cash and cash equivalents, restricted cash, and short-term investments of RMB3.3 billion after repurchasing an aggregate principal amount of RMB746.5 million of existing Convertible Senior Notes.  Our net cash position was RMB1.1 billion at the end of the quarter. We believe we are well positioned for sustainable growth and profitability as we drive long-term value for our customers through our Freight, integrated Supply Chain Management and Global logistics solutions."

FINANCIAL HIGHLIGHTS ([1]) 

For the Third Quarter Ended September 30, 2022:([2])

  • Revenue was RMB2,029.1 million (US$285.3 million), compared with RMB2,824.1 million in the third quarter of 2021. The decrease was primarily due to the winding-down of the BEST UCargo business line and lower Global parcel volume. Revenue generated from UCargo was approximately RMB0.4 million (US$0.06 million), compared with RMB729.9 million in the same quarter of 2021.
  • Gross Loss was RMB39.0 million (US$5.5 million), compared with RMB108.9 million in the third quarter of 2021. The decrease in gross loss was primarily due to improved gross margin from BEST Freight and BEST Supply Chain business lines. Gross Loss Margin was 1.9% for the third quarter of 2022, compared with a Gross Loss Margin of 3.9% in the same period of 2021.
  • Net Loss from continuing operations was RMB378.9 million (US$53.3 million), compared with RMB191.6 million in the third quarter of 2021. Non-GAAP Net Loss from continuing operations([3])([4]) was RMB363.0 million (US$51.0 million), compared with RMB223.4 million in the third quarter of 2021. Excluding the one-off gain of RMB208.9 million recognized on selling assets in the third quarter of 2021, non-GAAP net loss has narrowed by RMB69.3 million year over year.
  • Diluted loss per ADS([5]) from continuing operations was RMB4.40 (US$0.62), compared with a loss of RMB2.30 in the third quarter of 2021. Non-GAAP diluted loss per ADS(3)(4) from continuing operations was RMB4.20 (US$0.59), compared with a loss of RMB2.71 in the third quarter of 2021.
  • EBITDA([6]) from continuing operations was negative RMB335.9 million (US$47.2 million), compared with negative RMB116.7 million in the third quarter of 2021. Adjusted EBITDA(6) from continuing operations was negative RMB320.0 million (US$45.0 million), compared with negative RMB148.4 million in the third quarter of 2021.

BUSINESS HIGHLIGHTS([7]) 

BEST Freight – In the third quarter of 2022, Freight’s volume increased by 4.1% year over year, while its revenue increased by 9.7% to RMB1,325.8 million compared with the second quarter of 2022.  The Company remained focused on developing its e-commerce related business, which contributed 21.1% of total volume in the third quarter of 2022, representing an increase of 0.7% year over year. Freight’s net loss decreased by 36.8% or RMB81.0 million compared with the same quarter of 2021 as we continued to reduce expenses and improve operating efficiency. 

BEST UCargo’s operations and financial results are now consolidated with BEST Freight. 

BEST Supply Chain Management – In the third quarter of 2022, BEST SCM continued to terminate low margin legacy accounts and penetrate new markets with better unit economics. Its distribution volume increased by 84.5% but total number of orders fulfilled by Cloud OFCs decreased by 14.8% year over year.   The total revenue for SCM in the third quarter of 2022 increased by 15.2% to RMB461.5 million year over year, and gross margin improved by 3.5 percentage points to 7.2%, narrowing SCM’s net loss by RMB17.4 million, or 64.3%. 

BEST Global – The market in SEA remained challenging in the third quarter of 2022. Along with the relaxed COVID-19 pandemic control measures in the region, there was a noticeable shift in consumer consumption activities from online to offline, which negatively impacted the e-commerce logistics industry. Meanwhile, some major e-commerce platforms increased reliance on their own logistics capabilities and gradually reduced their reliance on third-party logistics service providers.  As a result, Global’s parcel volume decreased by 27.1% year over year to 27.0 million in the third quarter of 2022.  However, parcel volumes in Vietnam and Singapore increased by 34.4% and 23.5%, and their revenues increased by 42.3% and 45.2%, respectively.

Others

As part of its Strategic Refocusing Program, the Company continued to wind down the Capital business line in the third quarter of 2022 and expects the wind down to be substantially completed by the end of 2022.

Key Operational Metrics

Three Months Ended

% Change YOY

September 30,
2020

September 30,
2021

September 30,

2022

2021 vs
2020

2022 vs
2021

Freight Volume (Tonne in ‘000)

2,464

2,427

2,527

-1.5 %

4.1 %

Supply Chain Management
Orders Fulfilled (in ‘000)

102,171

103,638

88,288

1.4 %

-14.8 %

Global Parcel Volume in SEA
 (in ‘000)

20,754

37,082

27,044

78.7 %

-27.1 %

FINANCIAL RESULTS ([8]) 

For the Third Quarter Ended September 30, 2022:

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, 2021

September 30, 2022

(In ‘000, except for %)

RMB

% of
Revenue

RMB

US$

% of
Revenue

% Change
YOY

Total Freight

2,088,228

73.9 %

1,325,833

186,383

65.3 %

(36.5 %)

  -Freight

1,358,305

48.1 %

1,325,401

186,322

65.3 %

(2.4 %)

  -Legacy UCargo

729,923

25.8 %

432

61

0.0 %

(99.9 %)

Supply Chain
Management

400,551

14.2 %

461,527

64,880

22.7 %

15.2 %

Global

298,267

10.6 %

211,347

29,711

10.4 %

(29.1 %)

Others([9])

37,046

1.3 %

30,417

4,276

1.6 %

(17.9 %)

Total Revenue

2,824,092

100.0 %

2,029,124

285,250

100.0 %

(28.1 %)

 

  • Freight Service Revenue was RMB1,325.8 million (US$186.4 million) for the third quarter of 2022, compared with RMB2,088.2 million in the same period last year, of which, RMB0.4 million and RMB729.9 million were from the legacy UCargo business line, respectively. Freight service revenue, excluding the legacy UCargo business, decreased by 2.4% year over year, primarily due to a 6.1% decrease in average selling price per tonne.
  • Supply Chain Management Service Revenue increased by 15.2% year over year to RMB461.5 million (US$64.9 million) for the third quarter of 2022 from RMB400.6 million in the same period of 2021, primarily due to newly signed customers with high unit economics following our customer structure optimization strategy, as well as improved service capability.
  • Global Service Revenue decreased by 29.1% year over year to RMB211.3 million (US$29.7 million) for the third quarter of 2022 from RMB298.3 million in the same period of 2021, primarily due to decreased parcel volume in Thailand and Malaysia. E-commerce businesses in SEA were impacted by the shift in consumer consumption activities from online to offline and some major e-commerce platforms reduced their reliance on services. However, we continued focusing on expanding our franchisee network and improving service quality, and as a result, revenues in Vietnam and Singapore achieved year-over-year increases of 42.3% and 45.2%, respectively.

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, 2021

September 30, 2022

(In ‘000, except for %)

RMB

% of
Revenue

RMB

US$

% of
Revenue

Freight

(2,197,843)

105.2 %

(1,365,074)

(191,899)

103.0 %

(2.2 %)

Supply Chain
Management

(385,443)

96.2 %

(428,190)

(60,194)

92.8 %

(3.4 %)

Global

(318,420)

106.8 %

(255,341)

(35,895)

120.8 %

14.0 %

Others

(31,281)

84.4 %

(19,469)

(2,737)

64.0 %

(20.4 %)

Total Cost of Revenue

(2,932,987)

103.9 %

(2,068,074)

(290,725)

101.9 %

(2.0%

 

  • Cost of Revenue for Freight was RMB1,365.1 million (US$191.9 million), or 103.0% of revenue, in the third quarter of 2022. The 2.2% year-over-year decrease in cost of revenue as a percentage of revenue was mainly due to improved operational efficiency and effective cost control measures.
  • Cost of Revenue for Supply Chain Management was RMB428.2 million (US$60.2 million), or 92.8% of revenue, in the third quarter of 2022. The 3.4% year-over-year decrease in cost of revenue as a percentage of revenue was primarily due to effective cost control measures and customer structure optimization.
  • Cost of Revenue for Global was RMB255.3 million (US$35.9 million), or 120.8% of revenue, in the third quarter of 2022. The 14.0% year-over-year increase in cost of revenue as a percentage of revenue was primarily due to lower parcel volume. 
  • Cost of Revenue for Others was RMB19.5 million (US$2.7 million), or 64.0% of revenue, in the third quarter of 2022, representing a 20.4% year-over-year decrease.

Gross loss was RMB39.0 million (US$5.5 million) in the third quarter of 2022, compared with a gross loss of RMB108.9 million in the third quarter of 2021; Gross Margin was negative 1.9%, compared with negative 3.9% in the third quarter of 2021.

Operating Expenses

Selling, General and Administrative ("SG&A") Expenses were RMB275.2 million (US$38.7 million), or 13.6% of revenue in the third quarter of 2022, compared with RMB274.8 million, or 9.7% of revenue in the same quarter of 2021.

Research and Development Expenses were RMB39.6 million (US$5.6 million), or 2.0% of revenue in the third quarter of 2022, compared with RMB42.3 million, or 1.5% of revenue in the third quarter of 2021, primarily due to reduced headcounts.

Share-based Compensation ("SBC") Expenses included in the cost and expense items above were RMB15.9 million (US$2.2 million) in the third quarter of 2022, compared with RMB26.9 million in the same period of 2021. Of the total SBC expenses, RMB0.09 million (US$0.01 million) was allocated to cost of revenue, RMB0.7 million (US$0.1 million) was allocated to selling expenses, RMB13.9 million (US$2.0 million) was allocated to general and administrative expenses, and RMB1.2 million (US$0.2 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss from continuing operations

Net Loss from continuing operations in the third quarter of 2022 was RMB378.9 million (US$53.3 million), compared with RMB191.6 million in the same period of 2021. Excluding SBC expenses and gain from appreciation of investment, Non-GAAP Net Loss from continuing operations in the third quarter of 2022 was RMB363.0 million (US$51.0 million), compared with RMB223.4 million in the third quarter of 2021.

Diluted loss per ADS and Non-GAAP diluted loss per ADS from continuing operations

Diluted loss per ADS from continuing operations in the third quarter of 2022 was RMB4.40 (US$0.62), compared with a loss of RMB2.30 in the same period of 2021. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment, Non-GAAP diluted loss per ADS from continuing operations in the third quarter of 2022 was RMB4.20 (US$0.59), compared with a loss of RMB2.71 in the third quarter of 2021. A reconciliation of non-GAAP diluted loss per ADS to diluted loss per ADS is included at the end of this results announcement.

Adjusted EBITDA and Adjusted EBITDA Margin from continuing operations

Adjusted EBITDA from continuing operations in the third quarter of 2022 was negative RMB320.0 million (US$45.0 million), compared with negative RMB148.4 million in the same period of 2021. Adjusted EBITDA Margin from continuing operations in the third quarter of 2022 was negative 15.8%, compared with negative 5.3% in the same period of 2021.

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

As of September 30, 2022, cash and cash equivalents, restricted cash and short-term investments were RMB3.3 billion (US$468.4 million), compared with RMB2.9 billion as of September 30, 2021. In September 2022, the Company bought back an aggregate principal amount of US$105.1 million (RMB746.5 million) of its existing 1.75% Convertible Senior Notes due 2024.

Capital Expenditures ("CAPEX")

CAPEX was RMB48.1 million (US$6.8 million) or 2.4% of total revenue in the third quarter of 2022, compared with CAPEX of RMB11.8 million, or 0.4% of total revenue, in the same period of 2021. 

SHARES OUTSTANDING

As of November 8, 2022, the Company had approximately 393.0 million ordinary shares outstanding([10]). Each American Depositary Share represents five (5) Class A ordinary shares.

FINANCIAL GUIDANCE

Due to the uncertainties relating to the macro environment, the Company is not providing any financial guidance or revenue outlook at this time. BEST is driving each of its business units toward a speedy recovery as the COVID-19 pandemic related restrictions ease.

WEBCAST AND CONFERENCE CALL INFORMATION

The Company will hold a conference call at 8:00 pm U.S. Eastern Time on November 16, 2022 (9:00 am Beijing Time on November 17, 2022), to discuss its financial results and operating performance for the third quarter of 2022.

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           : 4725664

A replay of the conference call will be accessible through November 23, 2022 by dialing the following numbers:

United States                                       : +1-877-344-7529
International                                         : +1-412-317-0088
Replay Access Code                            : 8040204

Please visit the Company’s investor relations website 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 and SEA. Through its proprietary technology platform and extensive networks, BEST offers a comprehensive set of logistics and value-added services, including freight delivery, supply chain management and global logistics 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, and non-GAAP Diluted earnings/loss per ADS, 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,

2021

2022

2021

2022

RMB

RMB

US$

RMB

RMB

US$

Revenue

Freight

2,088,228

1,325,833

186,383

6,390,417

3,627,082

509,887

-Freight

1,358,305

1,325,401

186,322

3,931,359

3,607,081

507,075

-Legacy UCargo

729,923

432

61

2,459,058

20,001

2,812

Supply Chain Management

400,551

461,527

64,880

1,327,767

1,321,473

185,770

Global

298,267

211,347

29,711

863,291

721,227

101,388

Others

37,046

30,417

4,276

119,507

92,895

13,059

Total Revenue

2,824,092

2,029,124

285,250

8,700,982

5,762,677

810,104

Cost of Revenue

Freight

(2,197,843)

(1,365,074)

(191,899)

(6,435,898)

(3,837,911)

(539,525)

Supply Chain Management

(385,443)

(428,190)

(60,194)

(1,245,479)

(1,233,307)

(173,376)

Global

(318,420)

(255,341)

(35,895)

(912,119)

(817,573)

(114,933)

Others

(31,281)

(19,469)

(2,737)

(78,464)

(78,967)

(11,101)

Total Cost of Revenue

(2,932,987)

(2,068,074)

(290,725)

(8,671,960)

(5,967,758)

(838,934)

Gross Loss/(Profit)

(108,895)

(38,950)

(5,476)

29,022

(205,081)

(28,830)

Selling Expenses

(67,327)

(62,241)

(8,750)

(187,198)

(183,297)

(25,767)

General and Administrative
   Expenses

(207,505)

(212,921)

(29,932)

(599,726)

(680,607)

(95,678)

Research and Development
   Expenses

(42,259)

(39,632)

(5,571)

(129,910)

(114,934)

(16,157)

Other operating income/(loss), net

7,688

(14,185)

(1,994)

148,230

105,430

14,821

Loss from Operations

(418,298)

(367,929)

(51,723)

(739,582)

(1,078,489)

(151,612)

Interest Income

7,562

19,981

2,809

31,923

61,153

8,597

Interest Expense

(39,924)

(20,569)

(2,892)

(113,441)

(72,729)

(10,224)

Foreign Exchange Gain/(loss)

1,081

(98,628)

(13,865)

370

(201,048)

(28,263)

Other Income

268,106

2,657

374

314,366

23,765

3,341

Other Expense

(9,107)

(464)

(65)

(20,596)

19,578

2,752

Gain on changes in the fair value of
   derivative assets/liabilities

86,108

12,105

149,196

20,974

Loss before Income Tax and
   Share of Net Loss of Equity
   Investees

(190,580)

(378,844)

(53,257)

(526,960)

(1,098,574)

(154,435)

Income Tax Expense

(1,051)

(93)

(13)

(2,698)

(405)

(57)

Loss before Share of Net loss
   of Equity Investees

(191,631)

(378,937)

(53,270)

(529,658)

(1,098,979)

(154,492)

Share of Net Loss of Equity Investees

(16)

(58)

Net Loss from continuing operations

(191,647)

(378,937)

(53,270)

(529,716)

(1,098,979)

(154,492)

Net loss from discontinued operations

(459,188)

(8,904)

(1,252)

(1,205,911)

(6,677)

(939)

Net Loss

(650,835)

(387,841)

(54,522)

(1,735,627)

(1,105,656)

(155,431)

Net Loss from continuing
   operations attributable to non-
   controlling interests

(12,623)

(33,248)

(4,674)

(23,552)

(83,382)

(11,722)

Net Loss attributable to BEST
   Inc.

(638,212)

(354,593)

(49,848)

(1,712,075)

(1,022,274)

(143,709)

 

 

 

Summary of Unaudited Condensed Consolidated Balance Sheets

(In Thousands)

As of December 31,2021

As of September 30, 2022

RMB

RMB

US$

Assets

Current Assets

Cash and Cash Equivalents

3,571,745

767,359

107,874

Restricted Cash

675,159

251,152

35,306

Accounts and Notes Receivables

827,631

821,680

115,510

Inventories

25,622

20,820

2,927

Prepayments and Other Current
   Assets

1,172,472

922,893

129,738

Short‑term Investments

147,359

836,802

117,636

Amounts Due from Related Parties

125,198

59,575

8,375

Lease Rental Receivables

298,364

74,127

10,421

Total Current Assets

6,843,550

3,754,408

527,786

Non‑current Assets

Property and Equipment, Net

762,642

757,470

106,483

Intangible Assets, Net

55,684

70,233

9,873

Long‑term Investments

219,171

189,171

26,593

Goodwill

54,135

54,135

7,610

Non‑current Deposits

92,866

41,473

5,830

Other Non‑current Assets

111,640

75,626

10,631

Restricted Cash

1,069,244

1,476,649

207,584

Lease Rental Receivables

235,429

71,534

10,056

Operating Lease Right-of-use
   Assets

1,899,522

1,709,283

240,287

Total non‑current Assets

4,500,333

4,445,574

624,949

Total Assets

11,343,883

8,199,982

1,152,735

Liabilities and Shareholders’
   Equity

Current Liabilities

Long-term borrowings-current

287,814

110,539

15,539

Convertible Senior Notes held by
   related parties

633,475

1,065,224

149,747

Convertible Senior Notes held by
   third parties

633,475

78

11

Short‑term Bank Loans

530,495

126,288

17,753

Accounts and Notes Payable

1,353,150

1,533,502

215,576

Income Tax Payable

587

1,543

217

Customer Advances and Deposits
   and Deferred Revenue

298,353

260,099

36,564

Accrued Expenses and Other
   Liabilities

1,591,639

1,143,195

160,708

Financing Lease Liabilities

1,851

1,872

263

Operating Lease Liabilities

518,248

501,296

70,471

Amounts Due to Related Parties

2,763

12,443

1,749

Total Current Liabilities

5,851,850

4,756,079

668,599

 

 

 

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

(In Thousands)

As of December 31, 2021

As of September 30, 2022

RMB

RMB

US$

Non-current Liabilities

Convertible senior notes held by

related parties

955,097

Long-term borrowings

67,080

15,828

2,225

Operating Lease Liabilities

1,456,843

1,273,950

179,089

Financing Lease Liabilities

2,121

1,428

201

Other Non‑current Liabilities

24,261

27,913

3,924

Long-term Bank Loans

769,767

944,808

132,819

Total Non‑current Liabilities

3,275,169

2,263,927

318,258

Total Liabilities

9,127,019

7,020,006

986,857

Mezzanine Equity:

Convertible Non-controlling Interests

191,865

191,865

26,972

Total mezzanine equity

191,865

191,865

26,972

Shareholders’ Equity

Ordinary Shares

25,988

25,988

3,653

Treasury Shares

(113,031)

Additional Paid‑In Capital

19,522,173

19,465,841

2,736,465

Statutory reserves

167

Accumulated Deficit

(17,471,716)

(18,550,280)

(2,607,757)

Accumulated Other
   Comprehensive Income

107,379

118,635

16,677

BEST Inc. Shareholders’ Equity

2,070,960

1,060,184

149,038

Non-controlling Interests

(45,961)

(72,073)

(10,132)

Total Shareholders’ Equity

2,024,999

988,111

138,906

Total Liabilities, Mezzanine Equity
   and Shareholders’ Equity

11,343,883

8,199,982

1,152,735

 

 

 

Summary of Unaudited Condensed Consolidated Statements of Cash Flows

 (In Thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2022

2021

2022

RMB

RMB

US$

RMB

RMB

US$

Net cash used in continuing
   operating activities

(236,492)

(250,375)

(35,197)

(382,503)

(809,772)

(113,836)

Net cash used in discontinued
   operating activities

(921,754)

(7,917)

(1,113)

(1,525,286)

(66,174)

(9,303)

Net cash used in operating
   activities

(1,158,246)

(258,292)

(36,310)

(1,907,789)

(875,946)

(123,139)

Net cash generated from/(used
   in) continuing
investing
   a
ctivities

1,159,859

891,756

125,361

1,753,752

(88,780)

(12,480)

Net cash used in discontinued
   Investing activities

(104,948)

(350,688)

Net cash generated
   from
/(used in)  investing
   activities

1,054,911

891,756

125,361

1,403,064

(88,780)

(12,480)

Net cash (used in)/generated
   from
continuing financing   
activities

353,528

(982,052)

(138,055)

508,734

(1,948,848)

(273,965)

Net cash used in discontinued
   financing
activities

(294,139)

(807,259)

Net cash used in financing
   activities

59,389

(982,052)

(138,055)

(298,525)

(1,948,848)

(273,965)

Exchange Rate Effect on Cash   
   and Cash Equivalents, and
   Restricted Cash

3,895

44,482

6,253

(26,520)

92,586

13,016

Net decrease in Cash and
   Cash Equivalents, and
   Restricted Cash

(40,051)

(304,106)

(42,751)

(829,770)

(2,820,988)

(396,568)

Cash and Cash Equivalents,
   and Restricted Cash at
   Beginning of
 Period

3,419,402

2,799,266

393,515

4,209,121

5,316,148

747,332

Cash and Cash Equivalents,
   and Restricted Cash at End
   of
 Period

3,379,351

2,495,160

350,764

3,379,351

2,495,160

350,764

Less: Cash and Cash
   Equivalents, and Restricted
   Cash held for sales at end of
   the Period

511,696

511,696

Cash and Cash Equivalents,
   and Restricted Cash from
   continuing operations at
   End of
 Period

2,867,655

2,495,160

350,764

2,867,655

2,495,160

350,764

 

 

 

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

For the Company’s continuing operations, 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 3 – Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

Three Months Ended September 30, 2022

(In RMB’000)

Freight

Supply Chain

Global

Others

Unallocated([11])

Total

Net Loss

(138,749)

(9,664)

(110,426)

(48,601)

(71,497)

(378,937)

Add

Depreciation &
Amortization

19,417

8,397

6,531

1,976

6,025

42,346

Interest Expense

20,569

20,569

Income Tax Expense

(22)

115

93

Subtract

Interest Income

(19,981)

(19,981)

EBITDA

(119,332)

(1,289)

(103,895)

(46,510)

64,884

(335,910)

Add

 Share-based

Compensation
Expenses

2,511

1,314

1,354

23

10,694

15,896

Adjusted EBITDA

(116,821)

25

(102,541)

(46,487)

(54,190)

(320,014)

Adjusted EBITDA
   Margin

-8.8 %

0.0 %

-48.5 %

-152.8 %

-15.8 %

Three Months Ended September 30, 2021

(In RMB’000)

Freight

Supply Chain

Global

Others

Unallocated

Total

Net Income/(Loss)

(219,708)

(27,069)

(68,869)

(25,181)

149,180

(191,647)

Add

Depreciation &
Amortization

20,767

9,055

4,981

397

6,363

41,563

Interest Expense

39,924

39,924

Income Tax Expense

(130)

1,182

(1)

1,051

Subtract

Interest Income

(7,562)

(7,562)

EBITDA

(198,941)

(18,144)

(63,888)

(23,602)

187,904

(116,671)

Add

 Share-based

Compensation Expenses

 

3,459

2,160

2,068

171

19,038

26,896

Subtract

  Gain from
appreciation of
investments

(58,643)

(58,643)

Adjusted EBITDA

(195,482)

(15,984)

(61,820)

(23,431)

148,299

148,418

Adjusted EBITDA
   Margin

-9.4 %

-4.0 %

-20.7 %

-63.2 %

-5.3 %

 

 

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

Table 4 – Reconciliation of Non-GAAP Net (Loss)/Income and Non-GAAP Net (Loss)/Income Margin

Three Months Ended September 30, 2022

(In RMB’000)

Freight

Supply Chain

Global

Others

Unallocated

Total

Net Loss

(138,749)

(9,664)

(110,426)

(48,601)

(71,497)

(378,937)

Add

 Share-based

Compensation
Expenses

2,511

1,314

1,354

23

10,694

15,896

Non-GAAP Net
   Loss

(136,238)

(8,350)

(109,072)

(48,578)

(60,803)

(363,041)

Non-GAAP Net
   Loss/Margin

-10.3 %

-1.8 %

-51.6 %

-159.7 %

-17.9 %

Three Months Ended September 30, 2021

(In RMB’000)

Freight

Supply Chain

Global

Others

Unallocated

Total

Net Income/(Loss)

(219,708)

(27,069)

(68,869)

(25,181)

149,180

(191,647)

Add

 Share-based

Compensation
Expenses

3,459

2,160

2,068

171

19,038

26,896

Subtract

  Gain from
appreciation of
investments

(58,643)

(58,643)

Non-GAAP Net
   (Loss)
/Income

(216,249)

(24,909)

(66,801)

(25,010)

109,575

(223,394)

Non-GAAP Net
   (Loss)
/Income 
   Margin

-10.4 %

-6.2 %

-22.4 %

-67.5 %

-7.9 %

 

 

 

For the Company’s continuing operations, the table below sets forth a reconciliation of the Company’s diluted loss per ADS to Non-GAAP diluted loss per ADS for the periods indicated:

         Table 5 – Reconciliation of diluted loss per ADS and Non-GAAP diluted loss per ADS

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2022

(In ‘000)

RMB

US$

RMB

US$

Net Loss Attributable to Ordinary Shareholders

(345,689)

(48,596)

(1,015,597)

(142,770)

Add

Share-based Compensation Expenses

15,896

2,234

56,518

7,945

Non-GAAP Net Loss Attributable to Ordinary
   Shareholders

(329,793)

(46,362)

(959,079)

(134,825)

Weighted Average Diluted Ordinary Shares 
   Outstanding During the Quarter

Diluted

392,842,492

392,842,492

388,632,377

388,632,377

Diluted (Non-GAAP)

392,842,492

392,842,492

388,632,377

388,632,377

Diluted loss per ordinary share

(0.88)

(0.12)

(2.61)

(0.37)

Add

Non-GAAP adjustment to net loss per
   ordinary share

0.04

0.00

0.14

0.02

Non-GAAP diluted loss per ordinary share

(0.84)

(0.12)

(2.47)

(0.35)

Diluted loss per ADS

(4.40)

(0.62)

(13.07)

(1.84)

Add

Non-GAAP adjustment to net loss per ADS

0.20

0.03

0.73

0.11

Non-GAAP diluted loss per ADS

(4.20)

(0.59)

(12.34)

(1.73)

 

 

([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]) In December 2021, BEST sold its China express business, the principal terms of which were previously announced. As a result, China express business has been deconsolidated from the Company and its historical financial results are reflected in the Company’s consolidated financial statements as discontinued operations accordingly. The financial information and non-GAAP financial information disclosed in this press release is presented on a continuing operations basis, unless otherwise specifically stated.

([3]) 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).

([4]) 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.

([5]) Diluted earnings/loss per ADS, 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 expressed in ADS outstanding during the period.

([6]) EBITDA represents net income/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).

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

([8]) All numbers represented the financial results from continuing operations, unless otherwise stated.               

([9]) "Others" Segment primarily represents Capital business units. Results from UCargo’s legacy contracts with external customers are now reported under "Freight" segment and prior period segment information were retrospectively revised to conform to current period presentation.         

([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.

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

 

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