EX-99.1 2 tv495002_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Tuniu Announces Unaudited First Quarter 2018 Financial Results

Non-GAAP1 Net Loss in Q1 2018 Decreased by 89.5% Year-Over-Year

Added 51 Offline Retail Stores and 7 Local Tour Operators2

 

 

NANJING, China, May 24, 2018 -- Tuniu Corporation (NASDAQ:TOUR) ("Tuniu" or the "Company"), a leading online leisure travel company in China, today announced its unaudited financial results for the first quarter ended March 31, 2018.

 

Highlights for the First Quarter of 2018

 

·Revenues from package tours in the first quarter of 2018 increased by 13.1% year-over-year to RMB402.7 million (US$64.2 million3).
·Operating expenses in the first quarter of 2018 decreased by 31.4% year-over-year to RMB383.8 million (US$61.2 million).
·Non-GAAP net loss was RMB23.8 million (US$3.8 million) in the first quarter of 2018, compared to a Non-GAAP net loss of RMB226.2 million in the first quarter of 2017.
·As of April 30, 2018, Tuniu added 51 new offline retail stores during the year.
·As of April 30, 2018, Tuniu had 21 local tour operators in total, including 7 newly launched local tour operators in China4 during April.

 

Mr. Donald Dunde Yu, Tuniu’s co-founder, Chairman and Chief Executive Officer, said, “As the leading online leisure travel company in China, we have developed a comprehensive sales network that allows us to efficiently acquire customers through various channels at different departure cities. With a solid foundation established through our sales network, our next step is to replicate the expansion model to our service network at destinations. As China’s consumption power continues its upward trend, Chinese travelers are demanding better services and experiences. We believe that many of these demands are still unmet and there continues to be an opportunity for Tuniu to provide products and services consistent with current demands through its service network.”

 

Ms. Maria Yi Xin, Tuniu’s Chief Financial Officer, said, “During the first quarter, we were able to continue reducing our net loss. The development of our sales network served a vital role in the reduction of our sales and marketing expenses. Tuniu’s new retail model continues to gain traction as customers acquired through our offline retail stores contributed more than 10% of our packaged tour GMV for the first time during this quarter. With our blended user acquisition cost declining from the expansion of our sales network, and bargaining power increasing from the development of our service network, Tuniu’s operational efficiency will continue to scale in the future.”

 

 

 

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 table captioned “Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this press release reconciles Non-GAAP financial information with the Company's financial results under GAAP.

 

2 The section below entitled “Highlights for the First Quarter of 2018” provides additional information about some key financial figures and operating data.

 

3 The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.2726 on March 30, 2018 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/default.htm.

 

4 The 7 newly opened local tour operators are located in Huhehot, Taiyuan, Chengde, Hulunbuir, Harbin, Dalian and Urumqi in China.

 

 

 

First Quarter 2018 Results

 

Net revenues were RMB480.5 million (US$76.6 million) in the first quarter of 2018, representing a year-over-year increase of 5.4% from the corresponding period in 2017.

 

·Revenues from packaged tours, which are mainly recognized on a net basis, were RMB402.7 million (US$64.2 million) in the first quarter of 2018, representing a year-over-year increase of 13.1% from the corresponding period in 2017. The increase was primarily due to the growth of organized tours and self-guided tours.

 

·Other revenues were RMB77.9 million (US$12.4 million) in the first quarter of 2018, representing a year-over-year decrease of 22.2% from the corresponding period in 2017. The decrease was primarily due to the decline in revenues generated from financial services, commission fees received from air ticketing and service fees received from insurance companies.

 

Cost of revenues was RMB217.9 million (US$34.7 million) in the first quarter of 2018, representing a year-over-year increase of 6.4% from the corresponding period in 2017. As a percentage of net revenues, cost of revenues was 45.3% in the first quarter of 2018 compared to 44.9% in the corresponding period in 2017.

 

Gross profit was RMB262.6 million (US$41.9 million) in the first quarter of 2018, representing a year-over-year increase of 4.5% from the corresponding period in 2017. The increase was primarily due to the increase in efficiency resulting from economies of scale.

 

Operating expenses were RMB383.8 million (US$61.2 million) in the first quarter of 2018, representing a year-over-year decrease of 31.4% from the corresponding period in 2017. Share-based compensation expenses and amortization of acquired intangible assets, which were allocated to operating expenses, were RMB47.5 million (US$7.6 million) in the first quarter of 2018. Non-GAAP operating expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets, were RMB336.3 million (US$53.6 million) in the first quarter of 2018, representing a year-over-year decrease of 32.5%.

 

·Research and product development expenses were RMB84.1 million (US$13.4 million) in the first quarter of 2018, representing a year-over-year decrease of 47.3%. Non-GAAP research and product development expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB1.7 million (US$0.3 million), were RMB82.4 million (US$13.1 million) in the first quarter of 2018, representing a year-over-year decrease of 47.6% from the corresponding period in 2017. Research and product development expenses as a percentage of net revenues were 17.5% in the first quarter of 2018, decreasing from 35.0% in the corresponding period in 2017. The decrease was primarily due to the increase in efficiency resulting from economies of scale and refined management, and optimization of research and product development personnel.

 

 

 

 

·Sales and marketing expenses were RMB185.8 million (US$29.6 million) in the first quarter of 2018, representing a year-over-year decrease of 26.8%. Non-GAAP sales and marketing expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB34.3 million (US$5.5 million), were RMB151.5 million (US$24.1 million) in the first quarter of 2018, representing a year-over-year decrease of 30.9% from the corresponding period in 2017. Sales and marketing expenses as a percentage of net revenues were 38.7% in the first quarter of 2018, decreasing from 55.6% in the corresponding period in 2017. The decrease was primarily due to the optimization of promotional expense structure and preference for marketing channels with higher ROI.

 

·General and administrative expenses were RMB114.6 million (US$18.3 million) in the first quarter of 2018, representing a year-over-year decrease of 24.3%. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB11.5 million (US$1.8 million), were RMB103.1 million (US$16.4 million) in the first quarter of 2018, representing a year-over-year decrease of 19.0% from the corresponding period in 2017. General and administrative expenses as a percentage of net revenues were 23.9% in the first quarter of 2018, decreasing from 33.2% in the corresponding period in 2017. The decrease was primarily due to the increase in efficiency resulting from economies of scale and decline in personnel related fees.

 

Loss from operations was RMB121.1 million (US$19.3 million) in the first quarter of 2018, compared to a loss from operations of RMB308.0 million in the first quarter of 2017. Non-GAAP loss from operations, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB73.4 million (US$11.7 million) in the first quarter of 2018.

 

Net loss was RMB71.6 million (US$11.4 million) in the first quarter of 2018, compared to a net loss of RMB287.4 million in the first quarter of 2017. Non-GAAP net loss, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB23.8 million (US$3.8 million) in the first quarter of 2018.

 

Net loss attributable to ordinary shareholders was RMB74.7 million (US$11.9 million) in the first quarter of 2018, compared to a net loss attributable to ordinary shareholders of RMB288.2 million in the first quarter of 2017. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB26.9 million (US$4.3 million) in the first quarter of 2018.

 

As of March 31, 2018, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB3.1 billion (US$500.3 million).

 

 

 

 

Business Outlook

 

For the second quarter of 2018, Tuniu expects to generate RMB519.9 million to RMB538.3 million of net revenues, which represents 13% to 17% growth year-over-year. 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 8:00 am U.S. Eastern Time, on May 24, 2018, (8:00 pm, Beijing/Hong Kong Time, on May 24, 2018) to discuss the first quarter 2018 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 1Q 2018 Earnings Call

 

A telephone replay will be available one hour after the end of the conference through May 31, 2018. The dial-in details are as follows:

 

US: +1-877-344-7529
International:  +1-412-317-0088

Replay Access Code: 10120454

 

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 2,000,000 stock keeping units (SKUs) of packaged tours, covering over 420 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 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 ordinary shareholders, net loss per ordinary share attributable to ordinary shareholders-basic and diluted and net loss per ADS, which excludes 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

 

Mary Chen

 

Investor Relations Director

 

Tuniu Corporation

 

Phone: +86-25-6960-9988

 

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, 2017   March 31, 2018   March 31, 2018 
   RMB   RMB   US$ 
             
ASSETS               
Current assets               
Cash and cash equivalents   484,101    612,269    97,610 
Restricted cash   91,810    145,904    23,261 
Short-term investments   3,084,634    2,379,946    379,419 
Accounts receivable, net   286,627    327,759    52,252 
Amounts due from related parties   171,331    114,310    18,224 
Prepayments and other current assets   939,463    990,806    157,958 
Yield enhancement products and accrued interest   31,337    6,708    1,069 
Total current assets   5,089,303    4,577,702    729,793 
                
Non-current assets               
Long term investments   484,991    993,319    158,358 
Property and equipment, net   148,278    148,919    23,741 
Intangible assets, net   460,634    426,076    67,927 
Goodwill   147,639    147,639    23,537 
Yield enhancement products over one year and accrued interest   170,505    106,569    16,990 
Other non-current assets   156,455    166,558    26,553 
Total non-current assets   1,568,502    1,989,080    317,106 
Total assets   6,657,805    6,566,782    1,046,899 
                
LIABILITIES AND SHAREHOLDERS' EQUITY               
Current liabilities               
Accounts payable   852,500    1,161,487    185,168 
Amounts due to related parties   86,923    83,541    13,318 
Salary and welfare payable   187,561    99,822    15,914 
Taxes payable   32,036    18,101    2,886 
Advances from customers   1,210,615    1,033,293    164,731 
Accrued expenses and other current liabilities   373,690    399,541    63,695 
Amounts due to the individual investors of yield enhancement products   177,971    141,012    22,481 
Total current liabilities   2,921,296    2,936,797    468,193 
                
Non-current liabilities   42,481    40,842    6,511 
Total liabilities   2,963,777    2,977,639    474,704 
                
Mezzanine equity               
Redeemable noncontrolling interests   96,719    98,528    15,708 
                
Shareholders' equity               
Ordinary shares   248    248    40 
Less: Treasury stock   (185,419)   (203,717)   (32,477)
Additional paid-in capital   9,013,793    9,025,354    1,438,854 
Accumulated other comprehensive income   272,386    243,934    38,889 
Accumulated deficit   (5,505,897)   (5,579,701)   (889,536)
Total Tuniu's shareholders' equity   3,595,111    3,486,118    555,770 
Noncontrolling interests   2,198    4,497    717 
Total Shareholders' equity   3,597,309    3,490,615    556,487 
Total liabilities and shareholders' equity   6,657,805    6,566,782    1,046,899 

 

 

 

 

 

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 
   March 31, 2017   December 31, 2017   March 31, 2018   March 31, 2018 
   RMB   RMB   RMB   US$ 
                 
Revenues                    
Packaged tours   355,948    290,054    402,679    64,197 
Others   100,093    179,832    77,854    12,412 
Net revenues   456,041    469,886    480,533    76,609 
Cost of revenues   (204,737)   (234,733)   (217,907)   (34,740)
Gross profit   251,304    235,153    262,626    41,869 
                     
Operating expenses                    
Research and product development   (159,403)   (111,151)   (84,054)   (13,400)
Sales and marketing   (253,756)   (193,696)   (185,831)   (29,626)
General and administrative   (151,333)   (154,490)   (114,609)   (18,271)
Other operating income   5,223    3,348    735    117 
Total operating expenses   (559,269)   (455,989)   (383,759)   (61,180)
Loss from operations   (307,965)   (220,836)   (121,133)   (19,311)
Other income/(expenses)                    
Interest income   22,954    44,426    39,474    6,293 
Foreign exchange gains/(losses), net   (1,370)   (2,009)   5,977    953 
Other income/(loss), net   429    (147)   7,945    1,267 
Loss before income tax expense   (285,952)   (178,566)   (67,737)   (10,798)
Income tax expense   (1,406)   (7,569)   (3,828)   (610)
Net loss   (287,358)   (186,135)   (71,565)   (11,408)
Net income/(loss) attributable to noncontrolling interests   (751)   (2,939)   1,299    207 
Net income/(loss) attributable to redeemable noncontrolling interests   275    (93)   940    150 
Net loss attributable to Tuniu Corporation   (286,882)   (183,103)   (73,804)   (11,765)
Accretion on redeemable noncontrolling interest   (1,356)   (1,757)   (869)   (139)
Net loss attributable to ordinary shareholders   (288,238)   (184,860)   (74,673)   (11,904)
                     
Net loss   (287,358)   (186,135)   (71,565)   (11,408)
Other comprehensive income loss:                    
Foreign currency translation adjustment, net of nil tax   (19,190)   (24,770)   (28,452)   (4,536)
Comprehensive loss   (306,548)   (210,905)   (100,017)   (15,944)
                     
Loss per share                    
Net loss per ordinary share attributable to ordinary shareholders - basic and diluted   (0.76)   (0.48)   (0.19)   (0.03)
Net loss per ADS - basic and diluted*   (2.28)   (1.44)   (0.57)   (0.09)
Weighted average number of ordinary shares used in computing basic and diluted loss per share   378,164,347    387,993,534    388,843,912    388,843,912 
                     
Share-based compensation expenses included are as follows:                    
Cost of revenues   321    230    227    36 
Research and product development   1,784    1,324    1,260    201 
Sales and marketing   477    201    185    29 
General and administrative   23,139    17,089    10,709    1,707 
Total   25,721    18,844    12,381    1,973 

 

*Each ADS represents three of the Company's ordinary shares.

 

 

 

 

Reconciliations  of GAAP and Non-GAAP Results

(All amounts in thousands, except per share information)

               

 

   Quarter Ended March 31, 2018 
      Share-based   Amortization of acquired   Non-GAAP 
   GAAP Result   Compensation   intangible assets   Result 
                 
Cost of revenues   (217,907)   227    -    (217,680)
                     
Research and product development   (84,054)   1,260    399    (82,395)
Sales and marketing   (185,831)   185    34,163    (151,483)
General and administrative   (114,609)   10,709    781    (103,119)
Other operating income   735    -    -    735 
Total operating expenses   (383,759)   12,154    35,343    (336,262)
                     
Loss from operations   (121,133)   12,381    35,343    (73,409)
                     
Net loss   (71,565)   12,381    35,343    (23,841)
                     
Net loss attributable to ordinary shareholders   (74,673)   12,381    35,343    (26,949)
                     
Net loss per ordinary share attributable to ordinary shareholders - basic and diluted (RMB)   (0.19)             (0.07)
Net loss per ADS - basic and diluted (RMB)   (0.57)             (0.21)
Weighted average number of ordinary shares used in computing basic and diluted loss per share   388,843,912              388,843,912 
                     

 

   Quarter Ended December 31, 2017 
       Share-based   Amortization of acquired   Non-GAAP 
   GAAP Result   Compensation   intangible assets   Result 
                 
Cost of revenues   (234,733)   230    -    (234,503)
                     
Research and product development   (111,151)   1,324    399    (109,428)
Sales and marketing   (193,696)   201    34,163    (159,332)
General and administrative   (154,490)   17,089    777    (136,624)
Other operating income   3,348    -    -    3,348 
Total operating expenses   (455,989)   18,614    35,339    (402,036)
                     
Loss from operations   (220,836)   18,844    35,339    (166,653)
                     
Net loss   (186,135)   18,844    35,339    (131,952)
                     
Net loss attributable to ordinary shareholders   (184,860)   18,844    35,339    (130,677)
                     
Net loss per ordinary share attributable to ordinary shareholders - basic and diluted (RMB)   (0.48)             (0.34)
Net loss per ADS - basic and diluted (RMB)   (1.44)             (1.02)
Weighted average number of ordinary shares used in computing basic and diluted loss per share   387,993,534              387,993,534 
                     

 

   Quarter Ended March 31, 2017 
       Share-based   Amortization of acquired   Non-GAAP 
   GAAP Result   Compensation   intangible assets   Result 
                 
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 (RMB)   (0.76)             (0.60)
Net loss per ADS - basic and diluted (RMB)   (2.28)             (1.80)
Weighted average number of ordinary shares used in computing basic and diluted loss per share   378,164,347              378,164,347