EX-99.1 2 v473553_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Tuniu Announces Unaudited Second Quarter 2017 Financial Results

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, August 17, 2017 -- Tuniu Corporation (NASDAQ:TOUR) ("Tuniu" or the "Company"), a leading online leisure travel company in China, today announced its unaudited financial results for the second quarter ended June 30, 2017.

 

Highlights for the Second Quarter of 2017

 

·Net revenues in the second quarter of 2017 increased by 53.8% year-over-year, compared with Non-GAAP1 net revenues, to RMB460.1 million (US$67.9 million2).
·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).

 

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.

 

 

 

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.

 

 

 

 

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   Adjustment on net basis and timing of revenue recognition   Share-based   Amortization of acquired   Non-GAAP 
   Result   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   Adjustment on net basis and timing of revenue recognition   Share-based   Amortization of acquired   Non-GAAP 
   Result   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   Adjustment on net basis and timing of revenue recognition   Share-based   Amortization of acquired   Non-GAAP 
   Result   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)