NANJING, China, Nov. 27, 2017 /PRNewswire/ — Tuniu Corporation (NASDAQ: TOUR) (“Tuniu” or the “Company”), a leading online leisure travel company in China, today announced its unaudited financial results for the third quarter ended September 30, 2017.

Highlights for the Third Quarter of 2017

  • Net revenues in the third quarter of 2017 was RMB806.1 million (US$121.2 million[1]), an increase of 53.5% year-over-year when compared with Non-GAAP[2] net revenues in the third quarter of 2016.
  • Gross profit in the third quarter of 2017 was RMB440.9 million (US$66.3 million), an increase of 73.5% year-over-year when compared with Non-GAAP gross profit in the third quarter of 2016.
  • Non-GAAP net income in the third quarter of 2017 was RMB39.7 million (US$6.0 million), compared with a Non-GAAP net loss of RMB496.7 million in the third quarter of 2016.

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 third quarter of 2017 and the relevant Non-GAAP adjusted data for corresponding period in 2016:

(in thousands RMB)

Quarter Ended

September 30, 2016

Quarter Ended

September 30, 2017

% of change

Revenues

Packaged tours

394,789

604,047

53.0%

Others

130,360

202,038

55.0%

Net revenues

525,149

806,085

53.5%

Cost of revenues

(271,087)

(365,206)

34.7%

Gross profit

254,062

440,879

73.5%

 

[1] The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US$1.00=RMB6.6533 on September 29, 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.

[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 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.

Additional information regarding our Non-GAAP definition and reconciliations of GAAP and Non-GAAP results are provided at the end of this announcement.

Mr. Donald Dunde Yu, Tuniu’s co-founder, Chairman and Chief Executive Officer, said, “We are delighted to report solid results for the third quarter of 2017. Net revenues increased by 53.5% year-over-year during the third quarter while gross profit increased by 73.5% year-over-year. Tuniu continues to make exceptional progress with our core strategies of expanding our offline sales presence, implementing our own local tour operators and improving our technology infrastructure. These strategies are developing into our core competitive advantage, differentiating Tuniu from its industry peers as well as strengthening our leading position in China’s attractive online leisure travel industry.”

Ms. Maria Yi Xin, Tuniu’s Chief Financial Officer, said, “The strategies that we have implemented in the past years are starting to benefit our operations and financials. As a result, for the first time since our listing, we have reached non-GAAP profitability, a positive step towards achieving long-term profitability. As we continue to execute our core strategies and optimize our operations, Tuniu will expand while maximizing value for our customers and shareholders.”

Third Quarter 2017 Results

Net revenues were RMB806.1 million (US$121.2 million) in the third quarter of 2017, representing a year-over-year increase of 53.5%, compared with Non-GAAP net revenues, from the corresponding period in 2016.

  • Revenues from packaged tours, which are mainly recognized on a net basis, were RMB604.0 million (US$90.8 million) in the third quarter of 2017, representing a year-over-year increase of 53.0%, 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 RMB202.0 million (US$30.4 million) in the third quarter of 2017, representing a year-over-year increase of 55.0%, compared with Non-GAAP other revenues, from the corresponding period in 2016. The increase was due to a rise in revenues generated from financial services and commission fees received from certain travel-related products.

Cost of revenues was RMB365.2 million (US$54.9 million) in the third quarter of 2017, representing a year-over-year increase of 34.7%, compared with Non-GAAP cost of revenues, from the corresponding period in 2016. As a percentage of net revenues, cost of revenues was 45.3% in the third quarter of 2017, compared to 51.6% as a percentage of Non-GAAP net revenues in the corresponding period in 2016.

Gross profit was RMB440.9 million (US$66.3 million) in the third quarter of 2017, representing a year-over-year increase of 73.5%, 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 RMB506.9 million (US$76.2 million) in the third quarter of 2017, representing a year-over-year decrease of 38.9% from the corresponding period in 2016. Share-based compensation expenses and amortization of acquired intangible assets, which were allocated to operating expenses, were RMB66.4 million (US$10.0 million) in the third quarter of 2017. Non-GAAP operating expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets, were RMB440.5 million (US$66.2 million) in the third quarter of 2017, representing a year-over-year decrease of 43.2%.

  • Research and product development expenses were RMB124.0 million (US$18.6 million) in the third quarter of 2017, representing a year-over-year decrease of 26.2%. Non-GAAP research and product development expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB2.4 million (US$0.4 million), were RMB121.6 million (US$18.3 million) in the third quarter of 2017, representing a decrease of 26.9% from the corresponding period in 2016. Research and product development expenses as a percentage of net revenues were 15.4% in the third quarter of 2017, decreasing from 32.0% 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 operation systems, and optimization of research and product development personnel.
  • Sales and marketing expenses were RMB224.8 million (US$33.8 million) in the third quarter of 2017, representing a year-over-year decrease of 54.8%. Non-GAAP sales and marketing expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB34.7 million (US$5.2 million), were RMB190.1 million (US$28.6 million) in the third quarter of 2017, representing a year-over-year decrease of 59.2% from the corresponding period in 2016. Sales and marketing expenses as a percentage of net revenues were 27.9% in the third quarter of 2017, decreasing from 94.6% as a percentage of Non-GAAP net revenues in the corresponding period in 2016. The decrease was primarily due to the decline in brand promotions and preference for marketing channels with higher ROI.
  • General and administrative expenses were RMB165.9 million (US$24.9 million) in the third quarter of 2017, representing a year-over-year decrease of 1.3%. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB29.3 million (US$4.4 million), were RMB136.5 million (US$20.5 million) for the third quarter of 2017, representing a year-over-year decrease of 7.6% from the corresponding period in 2016. General and administrative expenses as a percentage of net revenues were 20.6% in the third quarter of 2017, decreasing from 32.0% 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 RMB66.0 million (US$9.9 million) in the third quarter of 2017, compared to a loss from operations of RMB584.1 million in the third quarter of 2016. Non-GAAP income from operations, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB0.6 million (US$0.1 million) in the third quarter of 2017.

Net loss was RMB27.0 million (US$4.1 million) in the third quarter of 2017, compared to a net loss of RMB559.0 million in the third quarter of 2016. Non-GAAP net income, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB39.7 million (US$6.0 million) in the third quarter of 2017.

Net loss attributable to ordinary shareholders was RMB29.3 million (US$4.4 million) in the third quarter of 2017, compared to a net loss attributable to ordinary shareholders of RMB556.2 million in the third quarter of 2016. Non-GAAP net income attributable to ordinary shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB37.4 million (US$5.6 million) in the third quarter of 2017.

As of September 30, 2017, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB4.4 billion (US$658.7 million).

Business Outlook

For the fourth quarter of 2017, Tuniu expects to generate RMB450.4 million to RMB466.5 million of net revenues, which represents 40% to 45% 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 8:00 am U.S. Eastern Time, on November 27, 2017, (9:00 pm, Beijing/Hong Kong Time, on November 27, 2017) to discuss the third 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 3Q 2017 Earnings Call

A telephone replay will be available one hour after the end of the conference through December 4, 2017. The dial-in details are as follows:

US:         +1-877-344-7529

International: +1-412-317-0088

Replay Access Code: 10114447

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 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

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, 2016 

 September 30, 2017 

 September 30, 2017 

 RMB 

 RMB 

 US$ 

ASSETS

Current assets

Cash and cash equivalents

1,085,236

847,984

127,453

Restricted cash 

124,561

90,553

13,610

Short-term investments

3,603,497

3,443,984

517,635

Accounts receivable, net

235,673

443,072

66,594

Amounts due from related parties

390,330

219,103

32,931

Prepayments and other current assets  

1,632,329

1,352,965

203,352

Yield enhancement products and accrued interest

449,528

301,688

45,344

Total current assets

7,521,154

6,699,349

1,006,919

Non-current assets

Long term investment

58,764

97,764

14,694

Property and equipment, net

177,817

147,852

22,222

Intangible assets

592,267

497,718

74,808

Goodwill

147,639

147,639

22,190

Yield enhancement products over one year and
accrued interest

562,643

204,608

30,753

Other non-current assets

46,468

152,729

22,955

Long-term amounts due from related parties

64,902

Total non-current assets

1,650,500

1,248,310

187,622

Total assets

9,171,654

7,947,659

1,194,541

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

Accounts payable 

1,022,704

1,473,376

221,450

Amounts due to related parties

32,526

109,305

16,429

Salary and welfare payable

192,455

166,681

25,052

Taxes payable

11,619

29,228

4,393

Advances from customers

1,806,493

1,341,284

201,597

Accrued expenses and other current liabilities

589,288

417,723

62,782

Amounts due to the individual investors of yield
enhancement products

871,914

496,058

74,558

Total current liabilities

4,526,999

4,033,655

606,261

Non-current liabilities

54,928

42,810

6,434

Total liabilities

4,581,927

4,076,465

612,695

Mezzanine equity

Redeemable noncontrolling interests

90,072

95,054

14,287

Shareholders’ equity

Ordinary shares

242

248

37

Less: Treasury stock

(19,708)

(185,419)

(27,869)

Additional paid-in capital

8,855,991

8,983,711

1,350,264

Accumulated other comprehensive income

400,925

297,156

44,663

Accumulated deficit

(4,738,593)

(5,322,794)

(800,023)

Total Tuniu’s shareholders’ equity

4,498,857

3,772,902

567,072

Noncontrolling interests

798

3,238

487

Total Shareholders’ equity

4,499,655

3,776,140

567,559

Total liabilities and shareholders’ equity

9,171,654

7,947,659

1,194,541

 

 

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, 2016 

 June 30, 2017 

 September 30, 2017 

 September 30, 2017 

 RMB 

 RMB 

 RMB 

 US$ 

Revenues

Packaged tours

3,936,978

339,304

604,047

90,789

Others

135,734

120,784

202,038

30,367

Net revenues

4,072,712

460,088

806,085

121,156

Cost of revenues

(3,827,529)

(219,530)

(365,206)

(54,891)

Gross profit

245,183

240,558

440,879

66,265

Operating expenses

Research and product development

(168,033)

(146,598)

(123,974)

(18,633)

Sales and marketing

(496,841)

(221,888)

(224,808)

(33,789)

General and administrative

(167,997)

(166,098)

(165,874)

(24,931)

Other operating income

3,618

5,421

7,757

1,166

Total operating expenses

(829,253)

(529,163)

(506,899)

(76,187)

Loss from operations

(584,070)

(288,605)

(66,020)

(9,922)

Other income/(expenses)

Interest income

26,675

23,006

39,864

5,992

Foreign exchange related gains/(losses), net

414

(923)

1,908

287

Other loss, net

(430)

(229)

(174)

(26)

Loss before income tax expense

(557,411)

(266,751)

(24,422)

(3,669)

Income taxes expense

(1,612)

(4,067)

(2,583)

(388)

Net loss

(559,023)

(270,818)

(27,005)

(4,057)

Less:Net income/(loss) attributable to
noncontrolling interests

(2,797)

(1,853)

609

92

Less: Net income attributable to redeemable
noncontrolling interests

226

514

77

Net loss attributable to Tuniu Corporation

(556,226)

(269,191)

(28,128)

(4,226)

Accretion on redeemable noncontrolling interest

(1,435)

(1,177)

(177)

Net loss attributable to ordinary shareholders

(556,226)

(270,626)

(29,305)

(4,403)

Net loss

(559,023)

(270,818)

(27,005)

(4,057)

Other comprehensive loss:

Foreign currency translation adjustment, net of nil
tax

29,500

(48,436)

(36,143)

(5,432)

Comprehensive loss

(529,523)

(319,254)

(63,148)

(9,489)

Loss per share

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

(1.47)

(0.72)

(0.08)

(0.01)

Net loss per ADS – basic and diluted*

(4.41)

(2.16)

(0.24)

(0.03)

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

378,412,340

374,426,600

372,335,675

372,335,675

Share-based compensation expenses included are as follows:

Cost of revenues

195

296

228

34

Research and product development

1,387

1,752

2,005

301

Sales and marketing

320

427

545

82

General and administrative

19,607

20,407

28,451

4,276

Total

21,509

22,882

31,229

4,693

*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 third quarter of 2017 with relevant Non-GAAP adjusted data for corresponding periods
in 2016.

 Quarter Ended 

 Quarter Ended 

 Quarter Ended 

 Quarter Ended 

 September 30, 2016 

 June 30, 2017 

 September 30, 2017 

 September 30, 2017 

 RMB 

 RMB 

 RMB 

 US$ 

Net revenues

525,149

460,088

806,085

121,156

Gross profit

254,062

240,558

440,879

66,265

Operating expenses

(775,826)

(529,163)

(506,899)

(76,187)

Loss from operations

(521,764)

(288,605)

(66,020)

(9,922)

Net loss

(496,717)

(270,818)

(27,005)

(4,057)

Net loss attributable to ordinary shareholders

(494,443)

(270,626)

(29,305)

(4,403)

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

(1.31)

(0.72)

(0.08)

(0.01)

 

 

Reconciliations  of GAAP and Non-GAAP Results

(All amounts in thousands, except per share information)

Quarter Ended September 30, 2017

 GAAP Result 

 Adjustment on net basis and timing of 

 Share-based 

Amortization of acquired 

 Non-GAAP 

 revenue recognition as in 2017 

 Compensation 

  intangible assets 

 Result 

Net revenue

806,085

806,085

Cost of revenues

(365,206)

228

(364,978)

Research and product development

(123,974)

2,005

399

(121,570)

Sales and marketing

(224,808)

545

34,163

(190,100)

General and administrative

(165,874)

28,451

876

(136,547)

Other operating income

7,757

7,757

Total operating expenses

(506,899)

31,001

35,438

(440,460)

Income/(loss) from operations

(66,020)

31,229

35,438

647

Net income/(loss) 

(27,005)

31,229

35,438

39,662

Net income/(loss) attributable to
ordinary shareholders

(29,305)

31,229

35,438

37,362

Net income/(loss) per ordinary share*

-Basic

(0.08)

0.10

-Diluted

(0.08)

0.10

Net income/(loss) per ADS

-Basic

(0.24)

0.30

-Diluted

(0.24)

0.30

Weighted average number of ordinary shares

-Basic

372,335,675

372,335,675

-Diluted

372,335,675

380,259,980

Quarter Ended June 30, 2017

 GAAP Result 

 Adjustment on net basis and timing of 

 Share-based 

Amortization of acquired 

 Non-GAAP 

 revenue recognition as in 2017 

 Compensation 

  intangible assets 

 Result 

Net revenue

460,088

460,088

Cost of revenues

(219,530)

296

(219,234)

Research and product development

(146,598)

1,752

399

(144,447)

Sales and marketing

(221,888)

427

34,163

(187,298)

General and administrative

(166,098)

20,407

793

(144,898)

Other operating income

5,421

5,421

Total operating expenses

(529,163)

22,586

35,355

(471,222)

Loss from operations

(288,605)

22,882

35,355

(230,368)

Net loss

(270,818)

22,882

35,355

(212,581)

Net loss attributable to ordinary
shareholders

(270,626)

22,882

35,355

(212,389)

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

(0.72)

(0.57)

Net loss per ADS – basic and diluted

(2.16)

(1.71)

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

374,426,600

374,426,600

Quarter Ended September 30, 2016

 GAAP Result 

 Adjustment on net basis and timing of 

 Share-based 

Amortization of acquired 

 Non-GAAP 

 revenue recognition as in 2017 

 Compensation 

  intangible assets 

 Result 

Net revenue

4,072,712

(3,547,563)

525,149

Cost of revenues

(3,827,529)

3,556,247

195

(271,087)

Research and product development

(168,033)

1,387

399

(166,247)

Sales and marketing

(496,841)

(3,055)

320

34,113

(465,463)

General and administrative

(167,997)

19,607

656

(147,734)

Other operating income

3,618

3,618

Total operating expenses

(829,253)

(3,055)

21,314

35,168

(775,826)

Loss from operations

(584,070)

5,629

21,509

35,168

(521,764)

Net loss 

(559,023)

5,629

21,509

35,168

(496,717)

Net loss attributable to
noncontrolling interests

(2,797)

523

(2,274)

Net loss attributable to ordinary
shareholders

(556,226)

5,106

21,509

35,168

(494,443)

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

(1.47)

(1.31)

Net loss per ADS – basic and diluted

(4.41)

(3.93)

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

378,412,340

378,412,340

*Basic net income/(loss) per share is calculated by dividing net income/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the
periods. Diluted net income/(loss) per share is calculated by dividing net income/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares and dilutive
potential ordinary shares outstanding during the periods, including the dilutive effect of share-based awards as determined under the treasury stock method.

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SOURCE Tuniu