BEST Inc. Announces Unaudited First Quarter 2023 Financial Results

The Company Plans to Reach Group Profitability by the End of 2023

HANGZHOU, China, May 30, 2023 /PRNewswire/ — BEST Inc. (NYSE: BEST) (“BEST” or the “Company”), a leading integrated smart supply chain solutions and logistics services provider in China and Southeast Asia, today announced its unaudited financial results for the first quarter ended March 31, 2023.

Johnny Chou, Founder, Chairman and CEO of BEST, commented, “We delivered exceptionally strong financial improvements in the first quarter of 2023 despite the traditionally slow first quarter and lingering impact from COVID. We significantly improved our bottom line by narrowing our net loss by 32.2% year over year, with BEST Supply Chain Management delivering profitability for the quarter and BEST Freight turning profitable in February and March.

“We have seen a strong recovering trend in consumer consumption post-COVID pandemic and demand for Freight services is increasing. In addition, many enterprises are developing into multiple sales channels to expand their market coverage and the demand for integrated logistics service partners with higher-level service capabilities is escalating. Our dedication to service quality, digital transformation, and customer satisfaction in the past quarters have made us more resilient and placed BEST in a strong position to quickly respond to the increasing market demand.

“During the first quarter, BEST Freight’s recovery accelerated with total Freight volume growing by 5.1% year over year. This uptick has continued in April with volume further increased by 20.3% year over year and this growth momentum is expected to continue throughout 2023. BEST Supply Chain Management maintained robust growth as well. In the first quarter, its revenue increased by 7.7% year over year and its gross margin expanded to 8.2%.

“As economy in the Southeast Asia recovered rapidly, the volume of its e-commerce business also surged and boosted the growth of cross-border activities. With our adjusted business strategy and realigned organization, BEST Global has significantly enhanced its service capabilities and became more resilient to take on this growing market opportunity. In the first quarter, BEST Global’s cross-border volume increased by 60% quarter over quarter and its parcel volume started the fast recovering trend.   

“Moving through 2023, we are confident that our commitment to operational excellence, combined with the synergistic opportunities across our core business lines will improve BEST’s overall competitive position and drive sustainable growth and profitability,” concluded Mr. Chou.

Gloria Fan, BEST’s Chief Financial Officer, added, “With effective cost controls and operating efficiency improvements, our Group’s gross margin has improved by 3.8 percentage points and net loss narrowed by 32.2% year over year for the first quarter of 2023. In addition, both BEST Freight and BEST Supply Chain Management generated positive cash flow from their operations during the quarter. We had a solid balance of cash and cash equivalents, restricted cash, and short-term investments of RMB3.2 billion at the end of the first quarter. Through our continued focus on service quality, digital transformation and synergies among our business lines, we expect to achieve Group profitability by the end of 2023.”

FINANCIAL HIGHLIGHTS[1]

For the First Quarter Ended March 31, 2023:[2]

  • Revenue was RMB1,715.3 million (US$249.8 million), compared to RMB1,802.6 million in the first quarter of 2022. The decrease was primarily due to lower Global volume, which caused by the lingering impact of the COVID and reduced volume from some major e-commerce platforms.
  • Gross loss was RMB8.5 million (US$1.2 million), compared to gross loss of RMB76.8 million in the first quarter of 2022. The improvement was primarily due to improved operating efficiency, the majority of which was attributable to BEST Freight and Supply Chain Management. Gross Loss Margin was 0.5%, compared to 4.3% in the first quarter of 2022.
  • Net Loss from continuing operations was RMB257.6 million (US$37.5 million), compared to RMB379.9 million in the first quarter of 2022. Non-GAAP Net Loss from continuing operations[3][4] was RMB245.5 million (US$35.8 million), compared to RMB359.2 million in the first quarter of 2022.
  • Diluted loss per ADS[5] from continuing operations was negative RMB12.38 (US$1.8) upon implementation of our ADS ratio change on April 4, 2023, compared to negative RMB18.4 in the first quarter of 2022 .Non-GAAP diluted loss per ADS[3][4] from continuing operations was negative RMB11.77(US$1.71), compared to negative RMB17.34 in the first quarter of 2022.
  • EBITDA[6] from continuing operations was negative RMB218.9 million (US$31.9 million), compared to negative RMB315.3 million in the first quarter of 2022. Adjusted EBITDA[3][5] from continuing operations was negative RMB206.8 million (US$30.1 million), compared to negative RMB294.6 million in the first quarter of 2022.

BUSINESS HIGHLIGHTS[7]

BEST Freight – Despite the first quarter seasonality and the lingering effects of COVID, BEST Freight showed swift recovery. BEST Freight’s volume for the quarter increased by 5.1% year over year. Its gross loss and net loss narrowed by 96.4% and 53.6%, respectively, both year over year. BEST Freight’s e-commerce volume contributed 21.5% of its total volume.

Looking ahead, BEST Freight will continue to develop digital transformation to improve its operating efficiency, leverage BEST Supply Chain Management customer base to capitalize on additional opportunities and develop the fulfillment franchise to further increase BEST Freight’s service network. 

BEST Supply Chain Management – During the first quarter of 2023, the Company continued to grow its distribution capabilities (“Cloud OFCs”) while expanding our service coverage into auto-parts and pharmaceutical markets. As a result, its revenue and distribution volume increased by 7.7% and 18.2% year over year, respectively. BEST Supply Chain Management’s gross margin for the first quarter of 2023 was 8.2%, improving by 3.9 ppts year over year with a net profit of RMB 0.4 million.

As BEST Supply Chain Management remains the center of our synergistic logistics ecosystem, we have been focusing heavily on the digital transformation to improve our operating efficiency and enhance system interconnectivity with our customers. This differentiates our market offerings and brings us additional competitive advantages. At the same time, we will continue to develop and accelerate BEST Supply Chain Management’s franchised fulfillment capabilities to further expand the network and improve its service capabilities.

BEST Global – Post COVID, economy of the Southeast Asia recovered rapidly and the volume of its e-commerce business surged. The growth of cross-border activities between China and the Southeast Asia also accelerated. The volume of BEST Global’s cross-border business increased in Q1 by approximately 60% quarter over quarter and its coverage for small- and medium-sized enterprises in Southeast Asia increased by approximately 15% year over year. With our adjusted business strategies and realigned organization, BEST Global has significantly enhanced its service capabilities and started recovering its parcel volume.  We expect BEST Global to continue its fast recovery and growth throughout 2023. 

Others – The Company continued to wind down its Capital business line and expects to complete the wind-down by the end of 2023.

Key Operational Metrics


Three Months Ended

% Change YOY


March 31,

2021


March 31,

2022


March 31,

2023


2022 vs

2021


2023 vs

2022






Freight Volume (Tonne in ‘000)

1,945

1,683

1,769


(13.5 %)

5.1 %

Supply Chain Management

Distribution Volume (Tonne in

‘000)

270

330

390


22.2 %

18.2 %

Global Parcel Volume in
Southeast Asia (in ‘000)

30,841


38,390


27,053


24.5 %


(29.5 %)

FINANCIAL RESULTS[8]

For the First Quarter Ended March 31, 2023:

Revenue

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

Table 1 – Breakdown of Revenue by Business Segment



Three Months Ended



March 31, 2022


March 31, 2023



(In ‘000, except for %)

RMB

% of

Revenue


RMB

US$

% of

Revenue


% Change

YOY

Freight

1,092,814

60.6 %


1,051,873

153,165

61.3 %


(3.7 %)

Supply Chain

Management

408,962

22.7 %


440,254

64,106

25.7 %


7.7 %

Global

268,709

14.9 %


197,028

28,689

11.5 %


(26.7 %)

Others[9]

32,100

1.8 %


26,107

3,801

1.5 %


(18.7 %)

Total Revenue

1,802,585

100.0 %


1,715,262

249,761

100.0 %


(4.8 %)

  • Freight Service Revenue was RMB1,051.9 million (US$153.2 million) for the first quarter of 2023, compared to RMB1,092.8 million in the same period of last year; Freight service revenue decreased by 3.7% year over year primarily resulting from the wind-down of UCargo business units.
  • Supply Chain Management Service Revenue increased by 7.7% year over year to RMB440.3 million (US$64.1 million) for the first quarter of 2023, up from RMB409 million in the same period of last year, primarily attributable to an expanded customer base and increased volume from existing customers.
  • Global Service Revenue decreased by 26.7% year over year to RMB197 million (US$28.7 million) for the first quarter of 2023 from RMB268.7 million in the same period of last year, primarily due to the impact of COVID and reduced volume from some major e-commerce platforms.

Cost of Revenue

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

Table 2 – Breakdown of Cost of Revenue by Business Segment



Three Months Ended


% of

Revenue

Change

YOY


March 31, 2022


March 31, 2023


(In ‘000, except for %)

RMB

% of

Revenue


RMB

US$

% of

Revenue


Freight

(1,170,314)

107.1 %


(1,054,635)

(153,567)

100.3 %


(6.8ppt)

Supply Chain

Management

(391,207)

95.7 %


(404,350)

(58,878)

91.8 %


(3.9ppt)

Global

(285,678)

106.3 %


(249,204)

(36,287)

126.5 %


20.2ppt

Others

(32,225)

100.4 %


(15,538)

(2,263)

59.5 %


(40.9ppt)

Total Cost of Revenue

(1,879,424)

104.3 %


(1,723,727)

(250,994)

100.5 %


(3.8ppt)

  • Cost of Revenue for Freight was RMB1,054.6 million (US$153.6 million), or 100.3% of revenue in the first quarter of 2023. The 6.8 ppts decrease year over year in cost of revenue as a percentage of revenue was mainly due to higher volume and improved efficiency.
  • Cost of Revenue for Supply Chain Management was RMB404.4 million (US$58.9million), or 91.8% of revenue in the first quarter of 2023. The 3.9 ppts decrease year over year in cost of revenue as a percentage of revenue was primarily due to improved operating efficiency and customer structure optimization.
  • Cost of Revenue for Global was RMB249.2 million (US$36.3 million), or 126.5% of revenue in the first quarter of 2023. The 20.2 ppts increase year over year in cost of revenue as a percentage of revenue was primarily due to lower parcel volume.
  • Cost of Revenue for Others was RMB15.5 million (US$2.3 million), or 59.5% of revenue in the first quarter of 2023,representing a 40.9 ppts decrease year over year basis.

Gross loss was RMB8.5 million (US$1.2 million) in the first quarter of 2023, compared to gross loss of RMB76.8 million in the first quarter of 2022. Gross Margin was negative 0.5%, compared to negative 4.3% in the first quarter of 2022. 

Operating Expenses

Selling, General and Administrative Expenses were RMB247.7 million (US$36.1 million) or 14.4% of revenue in the first quarter of 2023, compared to RMB255.0 million, or 14.1% of revenue in the first quarter of 2022. There was a one-off charge of RMB36.9 million in the first quarter of 2023. Excluding this one-off charge, SG&A expenses decreased by 17.3% year over year due to reduced employee headcount.

Research and Development Expenses were RMB28.7 million (US$4.2 million), or 1.7% of revenue in the first quarter of 2023, compared to RMB33.2 million, or 1.8% of revenue in the first quarter of 2022, primarily due to reduced employee headcount. 

Share-based Compensation (“SBC”) Expenses included in the cost and expense items above were RMB12.1 million (US$1.8 million) in the first quarter of 2023, compared to RMB20.7 million in the first quarter of 2022. In the first quarter of 2023, RMB0.04 million (US$0.01 million) was allocated to cost of revenue, RMB0.5 million (US$0.08 million) was allocated to selling expenses, RMB10.5 million (US$1.5 million) was allocated to general and administrative expenses, and RMB1.1 million (US$0.2 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss from continuing operations

Net Loss from continuing operations in the first quarter of 2023 was RMB257.6 million (US$37.5 million), compared to RMB379.9 million in the first quarter of 2022. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions, Non-GAAP Net Loss from continuing operations in the first quarter of 2023 was RMB245.5million (US$35.8 million), compared to RMB359.2 million in the first quarter of 2022.

Diluted loss per ADS and Non-GAAP diluted loss per ADS from continuing operations

Diluted loss per ADS from continuing operations in the first quarter of 2023 was negative RMB12.38 (US$1.8) upon implementation of our ADS ratio change on April 4, 2023, compared to negative RMB18.4 in the same period of 2022. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment, non-GAAP diluted loss per ADS from continuing operations in the first quarter of 2023 was negative RMB11.77(US$1.71), compared to negative RMB17.34 in the first quarter of 2022. A reconciliation of non-GAAP diluted loss per ADS to diluted loss per ADS is included at the end of this results announcement.

Adjusted EBITDA and Adjusted EBITDA Margin from continuing operations

Adjusted EBITDA from continuing operations in the first quarter of 2023 was negative RMB206.8 million (US$30.1 million), compared to negative RMB294.6 million in the same period of 2022. Adjusted EBITDA Margin from continuing operations in the first quarter of 2023 was negative 12.1%, compared to negative 16.3% in the same period of 2022.

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

As of March 31, 2023, cash and cash equivalents, restricted cash and short-term investments were RMB3,171.8 million (US$461.9 million), compared to RMB5,261.1 million as of March 31, 2022. In 2022, the Company bought back approximately US$200 million (RMB1.4 billion) aggregate principal amount of its existing Convertible Senior Notes due 2024.

Net Cash Used In Continuing Operating Activities

Net cash used in continuing operating activities in the first quarter of 2023 was RMB163.2 million (US$23.8 million), compared to RMB304.1 million of net cash used in continuing operating activities in the same period of 2022. The decrease in net cash used in operating activities was mainly due to the decreased net loss in the first quarter of 2023. 

SHARES OUTSTANDING

As of May 18, 2023, the Company had approximately 396.8 million ordinary shares outstanding[10]. Each American Depositary Share represents twenty (20) Class A ordinary shares.

As previously announced, effective from April 4, 2023, the Company has changed the ratio of its American Depositary Shares to its Class A ordinary shares, par value US$0.01 per share, from the original ADS ratio of one (1) ADS to five (5) Class A ordinary share, to a new ADS ratio of one (1) ADS to twenty (20) Class A ordinary shares.

FINANCIAL GUIDANCE

The Company confirms its guidance for total revenue between RMB9.0 billion and RMB9.5 billion for the full year of 2023.

This forecast reflects the Company’s current and preliminary view based on its current business situation and market conditions, which are subject to change.

WEBCAST AND CONFERENCE CALL INFORMATION

The Company will hold a conference call at 9:00 pm U.S. Eastern Time on May 30, 2023 (9:00 am Beijing Time on May 31, 2023), to discuss its financial results and operating performance for the first quarter of 2023.

Participants may access the call by dialing the following numbers:

United States

: +1-888-317-6003

Hong Kong

: 800-963976 or +852-5808-1995

Mainland China

: 4001-206115

International

: +1-412-317-6061

Participant Elite Entry Number

: 5937235

A replay of the conference call will be accessible through June 15, 2023 by dialing the following numbers:

United States

: +1-877-344-7529

International

: +1-412-317-0088

Replay Access Code

: 2605618

Please visit the Company’s investor relations website to view the earnings release prior to the conference call. A live and archived webcast of the conference call and a corporate presentation will be available at the same site.

ABOUT BEST INC.

BEST Inc. (NYSE: BEST) is a leading integrated smart supply chain solutions and logistics services provider in China and Southeast Asia. Through its proprietary technology platform and extensive networks, BEST offers a comprehensive set of logistics and value-added services, including freight delivery, supply chain management, and global logistics services. BEST’s mission is to empower business and enrich life by leveraging technology and business model innovation to create a smarter, more efficient supply chain. For more information, please visit: http://www.best-inc.com/en/.   

SAFE HARBOR STATEMENT

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as BEST’s strategic and operational plans, contain forward-looking statements. BEST may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about BEST’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: BEST’s goals and strategies; BEST’s future business development, results of operations and financial condition; BEST’s ability to maintain and enhance its ecosystem; BEST’s ability to compete effectively; BEST’s ability to continue to innovate, meet evolving market trends, adapt to changing customer demands and maintain its culture of innovation; fluctuations in general economic and business conditions in China and other countries in which BEST operates, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in BEST’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and BEST does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

USE OF NON-GAAP FINANCIAL MEASURES

In evaluating its business, BEST considers and uses non-GAAP measures, such as non-GAAP net loss/income, non-GAAP net loss/profit margin, adjusted EBITDA, adjusted EBITDA margin, EBITDA, and non-GAAP Diluted earnings/loss per ADS, as supplemental measures in the evaluation of the Company’s operating results and in the Company’s financial and operational decision-making. The Company believes these non-GAAP financial measures that help identify underlying trends in the Company’s business that could otherwise be distorted by the effect of the expenses and gains that the Company includes in loss from operations and net loss. The Company believes that these non-GAAP financial measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures” in the results announcement.

The non-GAAP financial measures are provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors’ overall understanding of the Company’s current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S. GAAP results. In addition, the Company’s calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Summary of Unaudited Condensed Consolidated Income Statements

(In Thousands)



Three Months Ended March 31,


2022

2023


RMB

RMB

US$

Revenue




Freight

1,092,814

1,051,873

153,165

Supply Chain Management

408,962

440,254

64,106

Global

268,709

197,028

28,689

Others

32,100

26,107

3,801

Total Revenue

1,802,585

1,715,262

249,761

Cost of Revenue




Freight

(1,170,314)

(1,054,635)

(153,567)

Supply Chain Management

(391,207)

(404,350)

(58,878)

Global

(285,678)

(249,204)

(36,287)

Others

(32,225)

(15,538)

(2,263)

Total Cost of Revenue

(1,879,424)

(1,723,727)

(250,994)

Gross Loss

(76,839)

(8,465)

(1,233)

Selling Expenses

(54,926)

(53,817)

(7,836)

General and Administrative

    Expenses

(200,054)

(193,890)

(28,233)

Research and

Development Expenses

(33,175)

(28,697)

(4,179)

Other operating

    income/(expense), net

2,640

(1,366)

(199)

Loss from Operations

(362,354)

(286,235)

(41,679)

Interest Income

15,618

21,678

3,157

Interest Expense

(26,422)

(17,621)

(2,566)

Foreign Exchange Gain

4,845

14,724

2,144

Other Income

16,109

5,224

761

Other Expense

(27,476)

(651)

(95)

Gain on change in fair value of

    derivative

5,392

785

Loss before Income Tax

    and Share of Net Loss of

    Equity Investees

(379,680)

(257,489)

(37,493)

Income Tax Expense

(219)

(138)

(20)

Loss before Share of Net

    loss of Equity Investees

(379,899)

(257,627)

(37,513)

Share of Net Loss of Equity

    Investees

Net Loss from continuing

    operations

(379,899)

(257,627)

(37,513)

Net gain/(loss) from

    discontinued operations

(284)

Net Loss

(380,183)

(257,627)

(37,513)

Net loss attributable to non-

    controlling interests

(20,878)

(13,428)

(1,955)

Net Loss attributable to

    BEST Inc.

(359,305)

(244,199)

(35,558)

Summary of Unaudited Condensed Consolidated Balance Sheets

(in thousands)



As of December 31, 2022


As of March 31, 2023


RMB


RMB

US$

Assets





Current Assets





Cash and Cash Equivalents

533,481


1,210,856

176,314

Restricted Cash

399,337


399,832

58,220

Accounts and Notes Receivables

691,324


693,003

100,909

Inventories

16,480


12,408

1,807

Prepayments and Other Current

     Assets

777,842


697,671

101,589

Short–term Investments

725,043


69,190

10,075

Amounts Due from Related Parties

76,368


64,692

9,420

Lease Rental Receivables

43,067


33,485

4,876

Total Current Assets

3,262,942


3,181,137

463,209

Non–current Assets





Property and Equipment, Net

784,732


753,971

109,787

Intangible Assets, Net

75,553


80,591

11,735

Long–term Investments

156,859


186,859

27,209

Goodwill

54,135


54,135

7,883

Non–current Deposits

50,767


47,426

6,906

Other Non–current Assets

75,666


78,803

11,475

Restricted Cash

1,545,605


1,491,945

217,244

Lease Rental Receivables

40,188


37,917

5,521

Operating Lease Right-of-use

     Assets

1,743,798


1,590,694

231,623

Total non–current Assets

4,527,303


4,322,341

629,382

Total Assets

7,790,245


7,503,478

1,092,591

Liabilities and Shareholders’

     Equity





Current Liabilities





Long-term borrowings-current

79,148


48,044

6,996

Convertible Senior Notes held by

     related parties

522,744


516,049

75,143

Convertible Senior Notes held by

     third parties

77


76

11

Short–term Bank Loans

183,270


334,131

48,653

Accounts and Notes Payable

1,430,004


1,497,933

218,116

Income Tax Payable

1,563


1,646

240

Customer Advances and Deposits

     and Deferred Revenue

277,737


278,800

40,596

Accrued Expenses and Other

     Liabilities

1,145,654


1,099,530

160,104

Financing Lease Liabilities

11,873


1,379

201

Operating Lease Liabilities

544,262


541,998

78,921

Amounts Due to Related Parties

1,315


720

105

Total Current Liabilities

4,197,647


4,320,306

629,085

Summary of Unaudited Condensed Consolidated Balance Sheets (Cont’d)

(In Thousands)



As of December 31, 2022


As of March 31, 2023


RMB


RMB

US$

Non-current Liabilities





Convertible senior notes held by
     related parties

522,744


516,049

75,143

Long-term borrowings

381


20

3

Operating Lease Liabilities

1,292,057


1,160,544

168,988

Financing Lease Liabilities

26,024


1,102

160

Other Non–current Liabilities

18,752


38,046

5,540

Long-term Bank Loans

928,894


918,870

133,798

Total Non–current Liabilities

2,788,852


2,634,631

383,632

Total Liabilities

6,986,499


6,954,937

1,012,717

Mezzanine Equity:





Convertible Non-controlling Interests

191,865


191,865

27,938

Total mezzanine equity

191,865


191,865

27,938

Shareholders’ Equity





Ordinary Shares

25,988


25,988

3,784

Treasury Shares


(4,283)

(624)

Additional Paid–In Capital

19,481,417


19,493,515

2,838,476

Accumulated Deficit

(18,934,860)


(19,179,059)

(2,792,687)

Accumulated Other

     Comprehensive Income

124,464


118,583

17,267

BEST Inc. Shareholders’ Equity

697,009


454,744

66,216

Non-controlling Interests

(85,128)


(98,068)

(14,280)

Total Shareholders’ Equity

611,881


356,676

51,936

Total Liabilities, Mezzanine Equity

     and Shareholders’ Equity

7,790,245


7,503,478

1,092,591

Summary of Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)



Three Months Ended March 31,


2022


2023


RMB


RMB

US$

Net cash used in continuing operating

     activities

(304,096)


(163,187)

(23,762)

Net cash used in operating

     activities

(304,096)


(163,187)

(23,762)

Net cash (used in)/generated from

     continuing
investing activities

(879,542)


683,000

99,453

Net cash (used in)/generated from

     investing activities

(879,542)


683,000

99,453

Net cash (used in)/generated from

     continuing financing
activities

(145,284)


117,619

17,127

Net cash (used in)/generated from

     financing activities

(145,284)


117,619

17,127

Exchange Rate Effect on Cash and

     Cash Equivalents, and Restricted

     Cash

(23,555)


(13,222)

(1,925)

Net (decrease)/increase in Cash and

     Cash Equivalents, and Restricted

     Cash

(1,352,477)


624,210

90,892

Cash and Cash Equivalents, and

     Restricted Cash at Beginning of
 

     Period

5,316,148


2,478,423

360,886

Cash and Cash Equivalents, and

     Restricted Cash at End of
 Period

3,963,671


3,102,633

451,778

Cash and Cash Equivalents, and

     Restricted Cash from continuing

     operations at End of
 Period

3,963,671


3,102,633

451,778

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


For the Company’s continuing operations, the table below sets forth a reconciliation of the

Company’s net (loss)/income to EBITDA, adjusted EBITDA and adjusted EBITDA margin for

the periods indicated:
 


Table 4 – Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin



Three Months Ended March 31, 2023

(In RMB’000)

Freight

Supply Chain

Global

Others

Unallocated[11]

Total

Net Loss

(80,238)

376

(111,867)

(20,362)

(45,536)

(257,627)

Add







Depreciation &

Amortization

19,316

8,648

9,232

509

4,952

42,657

Interest Expense

17,621

17,621

Income Tax

Expense

(11)

149

138

Subtract







Interest Income

(21,678)

(21,678)

EBITDA

(60,922)

9,024

(102,646)

(19,704)

(44,641)

(218,889)

Add







 Share-based

Compensation

Expenses

1,852

788

650

20

8,783

12,093

Adjusted EBITDA

(59,070)

9,812

(101,996)

(19,684)

(35,858)

(206,796)

Adjusted EBITDA

     Margin

(5.62 %)

2.23 %

(51.77 %)

(75.40 %)

(12.06 %)




Three Months Ended March 31, 2022

(In RMB’000)

Freight

Supply Chain

Global

Others

Unallocated[12]

Total

Net Loss

(173,111)

(20,768)

(70,976)

(57,376)

(57,668)

(379,899)

Add







Depreciation &

Amortization

20,257

10,484

5,110

13,317

4,391

53,559

Interest Expense

26,422

26,422

Income Tax

Expense

12

18

189

219

Subtract







Interest Income

(15,618)

(15,618)

EBITDA

(152,854)

(10,272)

(65,848)

(43,870)

(42,473)

(315,317)

Add







 Share-based

Compensation

Expenses

2,953

1,822

2,428

143

13,337

20,683

Adjusted EBITDA

(149,901)

(8,450)

(63,420)

(43,727)

(29,136)

(294,634)

Adjusted EBITDA

     Margin

(13.7 %)

(2.1 %)

(23.6 %)

(136.2 %)

(16.3 %)

For the Company’s continuing operations, the table below sets forth a reconciliation of the

Company’s net (loss)/income to non-GAAP net Income/(loss), non-GAAP net Income/(loss)

margin for the periods indicated:
 


Table 5 – Reconciliation of Non-GAAP Net (Loss)/Income and Non-GAAP Net (Loss)/Income Margin



Three Months  Ended March 31, 2023

(In RMB’000)

Freight

Supply Chain

Global

Others

Unallocated[13]

Total

Net Loss

(80,238)

376

(111,867)

(20,362)

(45,536)

(257,627)

Add







 Share-based

Compensation

Expenses

1,852

788

650

20

8,783

12,093

Non-GAAP Net

     Loss

(78,386)

1,164

(111,217)

(20,342)

(36,753)

(245,534)

Non-GAAP Net

     Loss Margin

(7.45 %)

0.26 %

(56.45 %)

(77.92 %)

(14.31 %)




Three Months  Ended March 31, 2022

(In RMB’000)

Freight

Supply Chain

Global

Others

Unallocated[14]

Total

Net Loss

(173,111)

(20,768)

(70,976)

(57,376)

(57,668)

(379,899)

Add







 Share-based

Compensation

Expenses

2,953

1,822

2,428

143

13,337

20,683

Non-GAAP Net

     Loss

(170,158)

(18,946)

(68,548)

(57,233)

(44,331)

(359,216)

Non-GAAP Net

     Loss Margin

(15.6 %)

(4.6 %)

(25.5 %)

(178.3 %)

(19.9 %)

For the Company’s continuing operations, the table below sets forth a reconciliation of the

Company’s diluted loss per ADS to Non-GAAP diluted loss per ADS for the periods indicated:
 


Table 6 – Reconciliation of diluted loss per ADS and Non-GAAP diluted loss per ADS



Three Months Ended March 31,


2023

(In ‘000)

RMB

US$

Net Loss Attributable to Ordinary Shareholders

(244,199)

(35,558)

Add



Share-based Compensation Expenses

12,093

1,761

Non-GAAP Net Loss Attributable to Ordinary

     Shareholders

(232,106)

(33,797)

Weighted Average Diluted Ordinary Shares 

     Outstanding During the Quarter



Diluted

394,377,251

394,377,251

Diluted (Non-GAAP)

394,377,251

394,377,251

Diluted loss per ordinary share

(0.62)

(0.09)

Add



Non-GAAP adjustment to net loss per     
ordinary share

0.03

Non-GAAP diluted loss per ordinary share

(0.59)

(0.09)




Diluted loss per ADS

(12.38)

(1.80)

Add



Non-GAAP adjustment to net loss per ADS

0.61

0.09

Non-GAAP diluted loss per ADS

(11.77)

(1.71)

[1] All numbers presented have been rounded to the nearest integer, tenth, or hundredth, and year-over-year comparisons are based on figures before rounding.

[2] In December 2021, BEST sold its China express business, the principal terms of which were previously announced. As a result, China express business has been deconsolidated from the Company and its historical financial results are reflected in the Company’s consolidated financial statements as discontinued operations accordingly. The financial information and non-GAAP financial information disclosed in this press release is presented on a continuing operations basis, unless otherwise specifically stated.

[3] Non-GAAP net income/loss represents net income/loss excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, and fair value change of equity investments (if any).

[4] See the sections entitled “Use of Non-GAAP Financial Measures” and “Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures” for more information about the non-GAAP measures referred to within this results announcement.

[5] Diluted earnings/loss per ADS, is calculated by dividing net income/loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares expressed in ADS outstanding during the period.

[6] EBITDA represents net loss excluding depreciation, amortization, interest expense and income tax expense and minus interest income. Adjusted EBITDA represents EBITDA excluding share-based compensation expenses and fair value change of equity investments (if any).

[7] All numbers presented have been rounded to the nearest integer, tenth, or hundredth, and year-over-year comparisons are based on figures before rounding.

[8] All numbers represented the financial results from continuing operations, unless otherwise stated.

[9] Others” Segment primarily represents Capital business units

[10] The total number of shares outstanding excludes shares reserved for future issuances upon exercise or vesting of awards granted under the Company’s share incentive plans.

[11] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

[12] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

[13] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

[14] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

SOURCE BEST Inc.


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