BEST Inc. Announces Unaudited Fourth Quarter and Fiscal Year 2020 Financial Results

HANGZHOU, China, March 11, 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 fourth quarter and fiscal year ended December 31, 2020.

Following the Company's previously announced decision to wind down its Store⁺ business by the end of 2020, starting with this announcement for the fourth quarter ended December 31, 2020, Store⁺'s historical financial results for the periods prior to the wind-down will be reflected in the Company's consolidated financial statements as discontinued operations.  

Johnny Chou, Founder, Chairman and Chief Executive Officer of BEST, commented, "In the fourth quarter of 2020, we executed our strategic refocusing plan and turned our business around amid strong industry competition, attesting to our ability to make quick and decisive changes in our strategies and operational practices. We continued to make improvements to all of our business segments and reduced losses, which put us back on the path to strong growth and profitability. Our Express segment under new management focused on strengthening network stability, optimizing product and cost structure, as well as enhancing service quality. In December 2020, despite a net loss for the quarter, net profit for Express turned positive for the first time since the second quarter of 2020. Our Freight segment continued to strengthen its industry leadership, demonstrating 25.1% year-over-year volume growth while returning to profitability. We also took initiatives to improve our Supply Chain Management performance as we focused on higher-margin customers. Our Global business continued its growth momentum by gaining more cross-border and Southeast Asia businesses, achieving over 400% parcel volume growth year-over-year."  

"While the Company suffered major setbacks due to the pandemic in 2020, we have taken decisive actions to steer the Company back to the path of growth and profitability. We firmly believe the worst is behind us and the future is bright. We entered 2021 with optimism and strong momentum, and anticipate strong growth for our business as the year progresses. We are determined to strengthen our market share, optimize cost structure, improve service quality and customer experience, and build out a leading integrated smart supply chain and logistics company to deliver sustainable and powerful future growth," concluded Mr. Chou.

Gloria Fan, BEST's Chief Financial Officer, commented, "We concluded a challenging 2020 with a fourth quarter focusing on strategic initiatives. We took decisive actions to realign our businesses to adapt to the evolving competitive market conditions as well as set a solid foundation for future growth. Our revenue, affected by the challenging pricing environment and reduced by the wind-down of Store⁺ during the quarter, was RMB9.3 billion. As part of our refocusing strategy, we identified and executed additional measures to manage our costs, expenses and liquidity. In the fourth quarter, we generated net operating cash flow of RMB347 million while maintaining a healthy combined balance of cash and cash equivalents, restricted cash and short-term investments of RMB4.5 billion. As we progress into 2021, we will remain focused on improving our capital structure as well as enhancing our balance sheet and cash flow to support the Company's future growth. Based on current market conditions and current operations, we expect the Company's revenue for the full fiscal year of 2021 to be between RMB34 billion and RMB36 billion. This forecast reflects management's current and preliminary expectation, which is subject to change."

FINANCIAL HIGHLIGHTS^[1] 

For the Fourth Quarter Ended December 31, 2020:

Results presented herein exclude Store+-related discontinued operations

• Revenue was RMB9,255.4 million (US$1,418.4 million), a decrease of 8.9% year-over-year ("YoY"). The decrease was primarily due to a decrease in average selling price ("ASP") per parcel in Express business, partially offset by an increase in Express parcel volume.
• Gross Profit was RMB50.1 million (US$7.7 million), a decrease of 91.1% YoY compared to gross profit of RMB561.5 million in the same period of 2019. The decrease was primarily due to a steeper ASP decrease than unit cost reduction in Express business. Gross Margin was 0.5%, a decrease of 5.0 percentage points ("ppts") YoY.
• Net Loss was RMB492.9 million (US$75.5 million), compared to a net income of RMB132.6 million in the same period of 2019. Non-GAAP Net Loss^[2][3] was RMB475.7 million (US$72.9 million), compared to non-GAAP net income of RMB146.8 million in the same period of 2019.
• Diluted EPS^[4] was negative RMB1.26 (US$0.19), compared to RMB0.36 in the same period of 2019. Non-GAAP Diluted EPS(3)(4) was negative RMB1.22 (US$0.19), compared to RMB0.39 in the same period of 2019.
• EBITDA^[5] was negative RMB305.2 million (US$46.8 million), compared to RMB245.9 million in the same period of 2019. Adjusted EBITDA^[3][5] was negative RMB288.0 million (US$44.1 million), compared to RMB259.2 million in the same period of 2019.

For the Fiscal Year Ended December 31, 2020:

Results presented herein exclude Store+-related discontinued operations

• Revenue was RMB29,995.0 million (US$4,596.9 million), a decrease of 7.3% YoY. The decrease was primarily due to a decrease in ASP per parcel in Express business, partially offset by an increase in Express parcel volume.
• Gross Profit was RMB238.1 million (US$36.5 million), a decrease of 85.5% YoY compared to gross profit of RMB1,637.3 million in fiscal year 2019. The decrease was primarily due to a steeper ASP decrease than unit cost reduction in Express and Freight businesses. Gross Margin was 0.8%, a decrease of 4.3 percentage points YoY.
• Net Loss was RMB1,683.1 million (US$257.9 million), compared to a net income of RMB172.7 million in fiscal year 2019. Non-GAAP Net Loss was RMB1,569.3 million (US$240.5 million), compared to non-GAAP net income of RMB253.9 million in fiscal year 2019.
• Diluted EPS was negative RMB4.28 (US$0.66), compared to RMB0.49 in fiscal year 2019. Non-GAAP Diluted EPS was negative RMB3.98 (US$0.61), compared to RMB0.70 in fiscal year 2019.
• EBITDA was negative RMB1,046.1 million (US$160.3 million), compared to RMB652.9 million in fiscal year 2019. Adjusted EBITDA was negative RMB935.1 million (US$143.3 million), compared to RMB730.4 million in fiscal year 2019.

BUSINESS HIGHLIGHTS^[6]

• The Company made significant changes in the fourth quarter of 2020 across its business segments. The initial positive results brought about by these changes affirms the Company's strategic direction targeting a sustainable recovery.
• The Company continues to evaluate strategic options aimed at enhancing its balance sheet and profitability.

BEST Express – The strategic refocusing plan announced in November 2020 focused on optimizing product structure, improving network stability and flexibility, as well as enhancing service quality and customer experience. These initiatives have already resulted in an encouraging recovery, demonstrated by improving parcel unit economics. Despite a net loss for the quarter, it achieved net profit for the month of December. During the quarter, parcel volume increased by 6.0% YoY, representing a market share of 9.5% during the quarter. Gross margin contracted by 7.2 ppts due to a decline in ASP per parcel of 20.4% YoY, partially offset by a decrease in average cost per parcel of 14.3% YoY. In fiscal year 2020, total parcel volume increased by 12.7% YoY to 8.54 billion, representing a market share of 10.2%.

BEST Freight – Freight continued strong post-pandemic recovery and delivered a strong quarter with a higher-than-industry-average growth rate while returning to profitability. The Company continued to emphasize the e-commerce aspect of its freight services, solidify its leadership position and brand recognition, and improve operating efficiency. Freight volume increased by 25.1% YoY in the fourth quarter of 2020. Gross margin was 5.5%, having recovered to pre-COVID level, and improved by 4.5 ppts quarter-over-quarter ("QoQ"), as pricing in the fourth quarter continued to rebound. Average cost per tonne and ASP both decreased by 16.7% YoY. In fiscal year 2020, total Freight volume increased by 20.2% YoY to 8.4 million tonnes.

BEST Supply Chain Management – The total number of orders fulfilled by Cloud OFCs increased by 11.7% YoY to 136.1 million in the fourth quarter of 2020 and the total number of orders fulfilled by franchised Cloud OFCs increased by 15.1% YoY to 67.1 million. The number of franchised OFCs increased by 22.2% YoY to 358 in the fourth quarter of 2020. In fiscal year 2020, the total number of orders fulfilled by Cloud OFCs increased by 21.4% YoY to 433.2 million and the total number of orders fulfilled by franchised Cloud OFCs increased by 35.9% YoY to 214.7 million. In the fourth quarter of 2020, gross margin for Supply Chain Management decreased by 6.3 ppts YoY, primarily due to one-off costs incurred by closing down Store⁺-  related operations, and pricing pressure associated with certain legacy key account customers, which are in the process of being discontinued.

BEST Global – In the fourth quarter of 2020, Global continued to expand cross-border and Southeast Asia business and margin improvement. In the fourth quarter, parcel volume in Thailand increased by 25.0% QoQ to 12.3 million, while parcel volume in Vietnam increased by 35.9% QoQ to 14 million. Global's gross margin expanded by 7.4 ppts YoY. In fiscal year 2020, total parcel volume in Thailand increased by 612.8% YoY to 37.3 million, and total parcel volume in Vietnam increased by 852.0% YoY to 33.8 million.

BEST UCargo – As of December 31, 2020, the number of registered drivers on the UCargo mobile app increased by 70.6% YoY to over 320,000. In the fourth quarter, the total number of transactions on the trucking brokerage platform increased by 19.0% YoY to 255,139. In fiscal year 2020, the total number of transactions on the trucking brokerage platform increased by 19.2% YoY to 738,131.

BEST Capital – As of December 31, 2020, BEST Capital had provided financing solutions to 13,410 trucks in total.

BEST Store⁺ – The Company has completed the wind-down of its Store⁺ business in accordance with the announcement on November 15, 2020.

Key Operational Metrics

FINANCIAL RESULTS

For the Fourth Quarter Ended December 31, 2020:

Results presented herein exclude Store+-related discontinued operations

Revenue

The following table sets forth a breakdown of revenue by business segment for the periods indicated.

• Express Service Revenue decreased by 15.6% YoY to RMB5,822.9 million (US$892.4 million) from RMB6,896.9 million, primarily due to a 20.4% YoY decrease in ASP per parcel, partially offset by a 6.0% YoY increase in parcel volume. The decrease in ASP per parcel is primarily attributable to competitive market dynamics.
• Freight Service Revenue increased by 4.2% YoY to RMB1,620.4 million (US$248.3 million) from RMB1,555.2 million, primarily due to a 25.1% YoY increase in freight volume, partially offset by a 16.7% YoY decrease in ASP per tonne.
• Supply Chain Management Service Revenue decreased by 10.9% YoY to RMB542.3 million (US$83.1 million) from RMB608.6 million, primarily due to pricing pressure associated with certain legacy key account customers, partially offset by a 11.7% YoY increase in the total number of orders fulfilled by Cloud OFCs.
• Global Service Revenue increased by 87.1% YoY to RMB253.4 million (US$38.8 million) from RMB135.4 million, primarily due to strong growth in parcel volumes in Southeast Asia.
• UCargo Service Revenue increased by 5.4% YoY to RMB957.9 million (US$146.8 million) from RMB908.9 million, primarily due to an increased number of total transactions.
• Capital Service Revenue increased by 13.1% YoY to RMB58.5 million (US$9.0 million) from RMB51.7 million.

Cost of Revenue

The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.

Cost of Revenue was RMB9,205.3 million (US$1,410.8 million) or 99.5% of revenue in the fourth quarter of 2020, compared to RMB9,595.2 million or 94.5% of revenue in the same quarter of 2019. The increase of 5.0 ppts in cost of revenue as a percentage of revenue was primarily attributable to a steeper decrease in ASP than unit cost reduction.

• Express Service Average Cost per Parcel decreased by 14.3%, primarily due to improved operating efficiency and economies of scale.
• Freight Service Average Cost per Tonne decreased by 16.7% YoY, primarily due to improved operating efficiency, network optimization and economies of scale.

Gross Profit was RMB50.1 million (US$7.7 million) in the fourth quarter of 2020, compared to gross profit of RMB561.5 million in the same quarter of 2019; Gross Margin was 0.5%, compared to 5.5% in the same quarter of 2019.

Operating Expenses

The following table sets forth a breakdown of operating expenses and adjusted operating expenses by category for the periods indicated.

Selling, General and Administrative Expenses were RMB498.7 million (US$76.4 million) or 5.4% of revenue in the fourth quarter of 2020, compared to RMB400.6 million or 3.9% of revenue in the same quarter of 2019. The increase in selling, general and administrative expenses was primarily attributable to additional accrued provision for certain trade receivables due to the pandemic and losses on disposal of fixed assets due to an upgrade of Express equipment.

Research and Development Expenses were RMB53.8 million (US$8.2 million) or 0.6% of revenue in the fourth quarter of 2020, compared to RMB52.1 million, or 0.5% of revenue in the same quarter of 2019.

Share-based Compensation ("SBC") Expenses included in the cost and expense items above in the fourth quarter of 2020 were RMB26.1 million (US$4.0 million), compared to RMB27.4 million in the same quarter of 2019. In the fourth quarter of 2020, RMB0.5 million (US$0.1 million) was allocated to cost of revenue, RMB0.5 million (US$0.1 million) was allocated to selling expenses, RMB23.3 million (US$3.6 million) was allocated to general and administrative expenses, and RMB1.8 million (US$0.3 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss 

Net Loss in the fourth quarter of 2020 was RMB492.9 million (US$75.5 million), compared to net income of RMB132.6 million in the same period of 2019. 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 fourth quarter of 2020 was RMB475.7 million (US$72.9 million), compared to non-GAAP net income of RMB146.8 million in the same quarter of 2019.

The following table sets forth a breakdown of non-GAAP net loss for the three months ended December 31, 2020 by segment.

Diluted EPS and Non-GAAP Diluted EPS

Diluted EPS in the fourth quarter of 2020 was negative RMB1.26 (US$0.19), based on a weighted average of 385.6 million diluted shares outstanding during the quarter. This is compared to RMB0.36 on a weighted average of 392.8 million diluted shares outstanding in the same period of 2019. 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 fourth quarter of 2020 was negative RMB1.22 (US$0.19), compared to RMB0.39 in the same period of 2019. 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 fourth quarter of 2020 was negative RMB288.0 million (US$44.1 million), compared to RMB259.2 million in same quarter in 2019. Adjusted EBITDA Margin was negative 3.1% in the fourth quarter of 2020, compared to 2.6% in the same quarter in 2019.

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 December 31, 2020 by segment.

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

As of December 31, 2020, cash and cash equivalents, restricted cash and short-term investments were RMB4,464.2 million (US$684.2 million), compared to RMB5,005.5 million as of December 31, 2019.

Net Cash Generated From Operating Activities

Net cash generated from operating activities was RMB346.9 million (US$53.2 million), compared to RMB606.2 million in the same period of 2019. The decrease in net cash generated from operating activities was mainly due to decreasing ASP per parcel for the Express business segment.

Capital Expenditures ("CAPEX")

CAPEX was RMB331.1 million (US$50.7 million), or 3.6% of total revenue in the fourth quarter ended December 31, 2020, compared to CAPEX of RMB387.6 million, or 3.8% of total revenue, in the same period of 2019.

For the Fiscal Year Ended December 31, 2020:

Results presented herein exclude Store+-related discontinued operations

Revenue

The following table sets forth a breakdown of revenue by business segment for the periods indicated.

• Express Service Revenue decreased by 11.0% YoY to RMB19,417.6 million (US$2,975.9 million) from RMB21,822.4 million, primarily due to a 21.0% YoY decrease in ASP per parcel, partially offset by a 12.7% YoY increase in parcel volume. The decrease in ASP per parcel is primarily attributable to competitive market dynamics.
• Freight Service Revenue decreased by 1.3% YoY to RMB5,156.6 million (US$790.3 million) from RMB5,224.4 million, primarily due to a 17.9% YoY decrease in ASP per tonne, partially offset by a 20.2% YoY increase in freight volume.
• Supply Chain Management Service Revenue decreased by 12.9% YoY to RMB1,912.3 million (US$293.1 million) from RMB2,195.8 million, primarily due to pricing pressure associated with certain legacy key account customers, partially offset by a 21.4% YoY increase in the total number of orders fulfilled by Cloud OFCs.
• Global Service Revenue increased by 130.8% YoY to RMB777.7 million (US$119.2 million) from RMB336.9 million, primarily due to strong growth in parcel volumes in Southeast Asia.
• UCargo Service Revenue decreased by 2.1% YoY to RMB2,519.9 million (US$386.2 million) from RMB2,574.1 million.
• Capital Service Revenue increased by 2.8% YoY to RMB211.0 million (US$32.3 million) from RMB205.2 million.

Cost of Revenue

The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.

Cost of Revenue was RMB29,756.9 million (US$4,560.4 million) or 99.2% of revenue in fiscal year 2020, compared to RMB30,721.4 million or 94.9% of revenue in fiscal year 2019. The increase of 4.3 ppts in cost of revenue as a percentage of revenue was primarily attributable to intensified Express market competition and a pricing lag after the PRC government reinstated highway tolls. As a result, the decrease in ASP outpaced reduction in unit cost in Express and Freight businesses.

• Express Service Average Cost per Parcel decreased by 16.9%, primarily due to improved operating efficiency and economies of scale.
• Freight Service Average Cost per Tonne decreased by 14.7% YoY, primarily due to improved operating efficiency, network optimization and economies of scale.

Gross Profit was RMB238.1 million (US$36.5 million) in fiscal year 2020, compared to gross profit of RMB1,637.3 million in fiscal year 2019; Gross Margin was 0.8%, compared to 5.1% in fiscal year 2019.

Operating Expenses

The following table sets forth a breakdown of operating expenses and adjusted operating expenses by category for the periods indicated.

Selling, General and Administrative Expenses were RMB1,740.1 million (US$266.7 million) or 5.8% of revenue in fiscal year 2020, compared to RMB1,365.7 million or 4.2% of revenue in fiscal year 2019. The increase in selling, general and administrative expenses was primarily attributable to increase in staff costs of Southeast Asia business, additional accrued provision for certain trade receivables due to the pandemic and losses on disposal of fixed assets due to an upgrade of Express's equipment.

Research and Development Expenses were RMB191.4 million (US$29.3 million) or 0.6% of revenue in fiscal year 2020, compared to RMB204.2 million, or 0.6% of revenue in fiscal year 2019. The decrease in research and development expenses was primarily attributable to capitalization of certain research and development expenditures to intangible assets.

Share-based Compensation ("SBC") Expenses included in the cost and expense items above in fiscal year 2020 were RMB129.7 million (US$19.9 million), compared to RMB91.7 million in fiscal year 2019. In fiscal year 2020, RMB2.4 million (US$0.4 million) was allocated to cost of revenue, RMB7.7 million (US$1.2 million) was allocated to selling expenses, RMB111.8 million (US$17.1 million) was allocated to general and administrative expenses, and RMB7.8 million (US$1.2 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss 

Net Loss in fiscal year 2020 was RMB1,683.1 million (US$257.9 million), compared to net income of RMB172.7 million in fiscal year 2019. 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 fiscal year 2020 was RMB1,569.3 million (US$240.5 million), compared to non-GAAP net income of RMB253.9 million in fiscal year 2019.

The following table sets forth a breakdown of non-GAAP net loss for fiscal year 2020 by segment.

Diluted EPS and Non-GAAP Diluted EPS

Diluted EPS in fiscal year 2020 was negative RMB4.28 (US$0.66), based on a weighted average of 387.5 million diluted shares outstanding during fiscal year 2020. This is compared to RMB0.49 on a weighted average of 388.5 million diluted shares outstanding in fiscal year 2019. 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 fiscal year 2020 was negative RMB3.98 (US$0.61), compared to RMB0.70 in fiscal year 2019. 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 was negative RMB935.1 million (US$143.3 million) in fiscal year 2020, compared to RMB730.4 million in fiscal year 2019. Adjusted EBITDA Margin was negative 3.1% in fiscal year 2020, compared to 2.3% in fiscal year 2019.

Adjusted EBITDA and Adjusted EBITDA Margin by Segment

The following table sets forth a breakdown of adjusted EBITDA and adjusted EBITDA margin for the in fiscal year 2020 by segment.

Net Cash Generated From Operating Activities

Net cash generated from operating activities in fiscal year 2020 was RMB11.2 million (US$1.7 million), compared to RMB1,131.2 million of net cash generated from operating activities in fiscal year 2019. The decrease in net cash generated from operating activities was mainly due to decreased ASP for the Express and Freight segments.

Capital Expenditures ("CAPEX")

CAPEX was RMB1,587.7 million (US$243.3 million), or 5.3% of total revenue in fiscal year 2020, compared to CAPEX of RMB1,497.7 million, or 4.6% of total revenue in fiscal year 2019.

SHARES OUTSTANDING

As of the date of this press release, the Company had approximately 387.7 million ordinary shares outstanding^[11]. Each American Depositary Share represents one Class A ordinary share.

FINANCIAL GUIDANCE 

Based on current market conditions and current operations, the Company expects its revenue for the full fiscal year of 2021 to be between RMB34 billion and RMB36 billion. This forecast reflects management's current and preliminary expectation, which is subject to change.

MANAGEMENT CHANGE

Mr. Bo Liu, senior vice president and general manager of BEST Store⁺ of the Company, has left the Company in late February 2021.

WEBCAST AND CONFERENCE CALL INFORMATION

The Company will hold a conference call at 9:00 pm U.S. Eastern Time on March 10, 2021 (10:00 am Beijing Time on March 11, 2021), to discuss its financial results and operating performance for the fourth quarter and fiscal year 2020.

Participants may access the call by dialing the following numbers:

A replay of the conference call will be accessible through March 17, 2021 by dialing the following numbers:

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. 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/.  

For investor and media inquiries, please contact:

BEST Inc.
Investor relations team                         
ir@best-inc.com

The Piacente Group, Inc.
Yang Song
Tel: +86-10-6508-0677
E-mail: best@tpg-ir.com

The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail:  best@tpg-ir.com

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 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/profit 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.

 

 

 

 

 

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

The table below sets forth a reconciliation of the Company's net loss to EBITDA, adjusted EBITDA and adjusted EBITDA margin for the periods indicated:

The table below sets forth a reconciliation of the Company's net Income/(loss) to non-GAAP net Income/(loss), non-GAAP net Income/(loss) margin for the periods indicated:

 

The table below sets forth a reconciliation of the Company's Diluted EPS to non-GAAP Diluted EPS for the periods indicated:

 

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