Tuniu Announces Unaudited Third Quarter 2019 Financial Results

NANJING, China, Nov. 19, 2019 /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 third quarter ended September 30, 2019.

Highlights for the Third Quarter of 2019

  • Revenues from packaged tours in the third quarter of 2019 increased by 18.1% year-over-year to RMB747.1 million (US$104.5 million[1])
  • Non-GAAP[2] net income was RMB39.0 million (US$5.5 million) in the third quarter of 2019.

Mr. Donald Dunde Yu, Tuniu's founder, Chairman and Chief Executive Officer, said, "We continue to revolve our strategies around the development of our S2B2C ecosystem. As consumer demand for higher-quality products shifts upwards in accordance with increasing purchasing power, it is crucial for Tuniu to increase our standards. Our emphasis on the continual improvement of our product, our service and our technology will be key to increasing user satisfaction rating, which in turn means higher repurchase rate and pricing power for Tuniu. We will leverage our established networks, consisting of both online and offline channels, to distribute Tuniu's high-quality products, namely Niu Tour and Tuniu Selection, to customers across China. By providing superior experiences to our customers, Tuniu will be able to stimulate repurchase rate and propel our growth into a stable upward trajectory."

Ms. Maria Yi Xin, Tuniu's Chief Financial Officer, said, "During the quarter, growth of packaged tour revenues recovered to double digits. For the third consecutive year, we were able to achieve non-GAAP profitability during our peak season in the third quarter. Our direct-procurement products and local tour operators continue to make increasingly significant financial contribution. Furthermore, Tuniu's commitment to automation has resulted in notable improvements to efficiency and expense control. Going forward, we expect the company to make meaningful steps toward unlocking more value for our customers and shareholders."

[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange
     rate of US$1.00=RMB7.1477 on September 30, 2019 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.

[2] 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.

Third Quarter 2019 Results

Net revenues were RMB852.5 million (US$119.3 million) in the third quarter of 2019, representing a year-over-year increase of 11.7% from the corresponding period in 2018.

  • Revenues from packaged tours were RMB747.1 million (US$104.5 million) in the third quarter of 2019, representing a year-over-year increase of 18.1% from the corresponding period in 2018. The increase was primarily due to the growth of organized tours.
  • Other revenues were RMB105.4 million (US$14.7 million) in the third quarter of 2019, representing a year-over-year decrease of 19.2% from the corresponding period in 2018. The decrease was primarily due to the decline in revenues generated from financial services and service fees received from insurance companies.

Cost of revenues was RMB472.0 million (US$66.0 million) in the third quarter of 2019, representing a year-over-year increase of 27.0% from the corresponding period in 2018. As a percentage of net revenues, cost of revenues was 55.4% in the third quarter of 2019 compared to 48.7% in the corresponding period in 2018.

Gross profit was RMB380.5 million (US$53.2 million) in the third quarter of 2019, representing a year-over-year decrease of 2.8% from the corresponding period in 2018.

Operating expenses were RMB437.3 million (US$61.2 million) in the third quarter of 2019, representing a year-over-year increase of 10.7% from the corresponding period in 2018. Share-based compensation expenses and amortization of acquired intangible assets, which were allocated to operating expenses, were RMB51.6 million (US$7.2 million) in the third quarter of 2019. Non-GAAP operating expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets, were RMB385.7 million (US$54.0 million) in the third quarter of 2019, representing a year-over-year increase of 13.2%.

  • Research and product development expenses were RMB64.3 million (US$9.0 million) in the third quarter of 2019, representing a year-over-year decrease of 17.8%. Non-GAAP research and product development expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB2.6 million (US$0.4 million), were RMB61.7 million (US$8.6 million) in the third quarter of 2019, representing a year-over-year decrease of 16.7% from the corresponding period in 2018. The decrease was primarily due to the improvement in efficiency resulting from the increased level of automation applied in research and product development activities, and optimization of research and product development personnel.
  • Sales and marketing expenses were RMB240.0 million (US$33.6 million) in the third quarter of 2019, representing a year-over-year increase of 14.5%. Non-GAAP sales and marketing expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB35.0 million (US$4.9 million), were RMB204.9 million (US$28.7 million) in the third quarter of 2019, representing a year-over-year increase of 17.2% from the corresponding period in 2018. The increase was primarily due to the expansion of our offline retail stores.
  • General and administrative expenses were RMB138.5 million (US$19.4 million) in the third quarter of 2019, representing a year-over-year increase of 12.6%. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB14.0 million (US$2.0 million), were RMB124.5 million (US$17.4 million) in the third quarter of 2019, representing a year-over-year increase of 15.9% from the corresponding period in 2018. The increase was primarily due to an increase in general and administrative personnel related expenses.

Loss from operations was RMB56.9 million (US$8.0 million) in the third quarter of 2019, compared to a loss from operations of RMB3.6 million in the third quarter of 2018. Non-GAAP loss from operations, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB5.2 million (US$0.7 million) in the third quarter of 2019.

Net loss was RMB12.6 million (US$1.8 million) in the third quarter of 2019, compared to a net income of RMB28.0 million in the third quarter of 2018. Non-GAAP net income, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB39.0 million (US$5.5 million) in the third quarter of 2019.

Net loss attributable to ordinary shareholders was RMB13.5 million (US$1.9 million) in the third quarter of 2019, compared to a net income attributable to ordinary shareholders of RMB31.0 million in the third quarter of 2018. Non-GAAP net income attributable to ordinary shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB38.2 million (US5.3 million) in the third quarter of 2019.

As of September 30, 2019, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB2.2 billion (US$305.7 million). 

Business Outlook

For the fourth quarter of 2019, Tuniu expects to generate RMB438.2 million to RMB461.8 million of net revenues, which represents 2% to 7% decrease 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 November 19, 2019, (9:00 pm, Beijing/Hong Kong Time, on November 19, 2019) to discuss the third quarter 2019 financial results.

To participate in the conference call, please dial the following numbers:

US:        

+1-888-346-8982

Hong Kong: 

+852-301-84992

Mainland China: 

4001-201203

International: 

+1-412-902-4272

Conference ID: Tuniu 3Q 2019 Earnings Call

A telephone replay will be available one hour after the end of the conference through November 26, 2019. The dial-in details are as follows:

US:        

+1-877-344-7529

International: 

+1-412-317-0088

Replay Access Code: 10136878

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 covers  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, including over 3,000 professional customer service representatives, 24/7 call centers, approximately 500 offline retail stores and 34 self-operated local tour operators. 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, 2018 


 September 30, 2019 


 September 30, 2019 


 RMB 


 RMB 


 US$ 







ASSETS






Current assets






Cash and cash equivalents

560,356


411,124


57,518

Restricted cash 

270,670


260,232


36,408

Short-term investments

859,211


1,513,781


211,786

Accounts receivable, net

347,547


520,260


72,787

Amounts due from related parties

696,520


118,037


16,514

Prepayments and other current assets  

1,673,584


1,444,967


202,159

Total current assets

4,407,888


4,268,401


597,172







Non-current assets






Long-term investments

1,302,506


1,376,010


192,511

Property and equipment, net

187,360


223,656


31,291

Intangible assets, net

317,885


218,514


30,571

Land use right, net

100,836


99,290


13,891

Operating lease right-of-use assets, net*

-


162,662


22,757

Goodwill

159,409


184,569


25,822

Other non-current assets

81,039


86,993


12,171

Long-term amounts due from related parties

-


523,269


73,208

Total non-current assets

2,149,035


2,874,963


402,222

Total assets

6,556,923


7,143,364


999,394







LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities






Short-term borrowings

49,312


144,260


20,183

Accounts and notes payable 

1,305,610


1,811,032


253,373

Amounts due to related parties

77,159


58,067


8,124

Salary and welfare payable

104,480


91,871


12,853

Taxes payable

23,316


6,665


932

Advances from customers

1,058,946


960,065


134,318

Operating lease liabilities, current*

-


83,834


11,729

Accrued expenses and other current liabilities

483,832


698,149


97,675

Total current liabilities

3,102,655


3,853,943


539,187







Non-current liabilities






Operating lease liabilities, non-current*

-


81,331


11,379

Deferred tax liabilities

19,855


20,047


2,805

Long-term borrowings

4,492


10,486


1,467

Other non-current liabilities

16,069


12,709


1,778

Total non-current liabilities

40,416


124,573


17,429

Total liabilities

3,143,071


3,978,516


556,616







Mezzanine equity






Redeemable noncontrolling interests

69,319


73,270


10,251







Shareholders' equity






Ordinary shares

249


249


35

Less: Treasury stock

(304,535)


(311,217)


(43,541)

Additional paid-in capital

9,061,979


9,108,243


1,274,290

Accumulated other comprehensive income

284,079


298,723


41,793

Accumulated deficit

(5,691,409)


(6,020,377)


(842,282)

Total Tuniu's shareholders' equity

3,350,363


3,075,621


430,295

Noncontrolling interests

(5,830)


15,957


2,232

Total Shareholders' equity

3,344,533


3,091,578


432,527

Total liabilities and shareholders' equity

6,556,923


7,143,364


999,394







*On 1 January 2019, the Company adopted ASC 842, Leases and used the optional transition method to initially apply this
new lease standard at the adoption date. Right-of-use assets and lease liabilities were recognized on the Company's consolidated
financial statements.

 

 

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 


 September 30,
2018 


 June 30,
2019 


 September 30,
2019 


 September 30,
2019 


 RMB 


 RMB 


 RMB 


 US$ 









Revenues








    Packaged tours

632,723


429,482


747,122


104,526

    Others

130,408


90,848


105,395


14,745

Net revenues

763,131


520,330


852,517


119,271

Cost of revenues

(371,622)


(287,330)


(472,040)


(66,041)

Gross profit

391,509


233,000


380,477


53,230









Operating expenses








    Research and product development

(78,270)


(80,197)


(64,310)


(8,997)

    Sales and marketing

(209,563)


(224,582)


(239,973)


(33,573)

    General and administrative

(122,936)


(134,389)


(138,456)


(19,371)

    Other operating income

15,656


6,925


5,406


756

Total operating expenses

(395,113)


(432,243)


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