omniture

Tuniu Announces Unaudited Second Quarter 2017 Financial Results

2017-08-17 06:00 3430

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 17, 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

June 30, 2016

Quarter Ended

June 30, 2017

% of change

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
interest

449,528


390,648


57,624

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
and accrued interest

562,643


383,000


56,496

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
yield enhancement products

871,914


682,245


100,636

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),
net

(8,285)


(1,370)


(923)


(136)

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
interests

(2,672)


(751)


(1,853)


(273)

Less: Net loss attributable to redeemable
noncontrolling interests

-


275


226


33

Net loss attributable to Tuniu
Corporation

(754,222)


(286,882)


(269,191)


(39,706)

Accretion on redeemable noncontrolling
interest

-


(1,356)


(1,435)


(212)

Net loss attributable to ordinary
shareholders

(754,222)


(288,238)


(270,626)


(39,918)









Net loss

(756,894)


(287,358)


(270,818)


(39,946)

Other comprehensive loss:








Foreign currency translation adjustment,
net of nil tax

119,928


(19,190)


(48,436)


(7,145)

Comprehensive loss

(636,966)


(306,548)


(319,254)


(47,091)









Loss per share








Net loss per ordinary share attributable to
ordinary shareholders - basic and diluted

(1.99)


(0.76)


(0.72)


(0.11)

Net loss per ADS - basic and diluted*

(5.97)


(2.28)


(2.16)


(0.33)

Weighted average number of ordinary
shares used in computing basic and diluted
loss per share

378,120,850


378,164,347


374,426,600


374,426,600









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
ordinary shareholders - basic and diluted

(1.84)


(0.76)


(0.72)


(0.11)

 

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
ordinary shareholders - basic and diluted

(0.72)








(0.57)

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
ordinary shareholders - basic and diluted

(0.76)








(0.60)

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
ordinary shareholders - basic and diluted

(1.99)








(1.84)

Net loss per ADS - basic and diluted

(5.97)








(5.52)

 

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Source: Tuniu
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