111, Inc. Announces First Quarter 2024 Unaudited Financial Results
- Turned to Quarterly Operational Profitability for the First Time
- Operating Expenses as a Percentage of Revenues Decreased 120 Basis Points YoY to 5.8%
- Achieved Positive Operating Cash Flow
First Quarter 2024 Highlights
-
Net revenues were
RMB3.5 billion (US$488.7 million ) and Gross segment profit(1) wasRMB 208.5 million (US$ 28.9 million ). Due to the sudden surge in medicine demand during the peak of the Covid-19 pandemic in Q1 2023, net revenue and gross segment profit had a 4.6% and 11.7% decrease respectively. -
Total operating expenses were
RMB204.8 million (US$28.4 million ), an improvement of 20.6% compared toRMB257.9 million in the same quarter of last year. As a percentage of net revenues, total operating expenses decreased by 120 basis points to 5.8% from 7.0% in the same quarter of last year, which reflected continuous improvement in our operation efficiency. -
Income from operations was
RMB3.7 million (US$0.5 million ), compared to loss from operations wasRMB21.7 million in the same quarter of last year. Thismarks 111 's inaugural operational income on a quarterly basis. -
Non-GAAP income from operations
(2) was
RMB8.9 million (US$1.2 million ), representing an increase of 259.2% compared toRMB2.5 million in the same quarter of last year. As a percentage of net revenues, non-GAAP income from operations accounted for 0.3% in the quarter, an increase of 20 basis points from 0.1% in the same quarter of last year.
(1) Gross segment profit represents net revenues less cost of goods sold. |
(2) Non-GAAP income from operations represents income from operations excluding share-based compensation expenses. |
Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive Officer of 111, commented, "We are delighted to start the year with a major milestone in the first quarter of 2024 as our continuous operational enhancements empowered us to turn to operational profitability for the first time. Notably, income from operations reached
"Furthermore, our investments in technology empowerment effectively drove up operational efficiency and customer engagement. We also made novel supply chain advancement that will unlock new growth opportunities, highlighted by our launch of a new delivery and transit model for streamlining logistics and saving fulfilment costs. Our pioneering role in digital commerce transformation and commitment to innovative excellence has also been recognized as we obtained significant accolades and a new patent from government agencies and professional institutions."
"Looking ahead, we will remain dedicated to delivering one-stop shopping experiences supported by the most comprehensive and cost-effective product portfolio. With our internal 100% digital operating system at our core, we've attained unmatched operational efficiency within the industry. We are well positioned to empower both upstream and downstream customers to improve efficiency for the entire industry and reshape the traditional value chain. Our focus on strengthened partnership with pharmaceutical companies, strategic investments in operational efficiency, as well as relentless commitment to digitalization and AI innovation will enable us to capture greater market share and growth for higher revenue and profit levels. We are confident that these initiatives will solidify our leadership in the market, and we look forward to continuously generating value to our shareholders, customers, and stakeholders in the quarters ahead."
First Quarter 2024 Financial Results
Net revenues were RMB3.5 billion (
(In thousands RMB) |
For the three months ended |
||||
|
2023 |
|
2024 |
|
YoY |
B2B Net Revenue |
|
|
|
|
|
Product |
3,562,682 |
|
3,431,172 |
|
-3.7 % |
Service |
21,141 |
|
20,837 |
|
-1.4 % |
|
|
|
|
|
|
Sub-Total |
3,583,823 |
|
3,452,009 |
|
-3.7 % |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Products Sold(3) |
3,372,828 |
|
3,261,103 |
|
-3.3 % |
|
|
|
|
|
|
Segment Profit |
210,995 |
|
190,906 |
|
-9.5 % |
Segment Profit % |
5.9 % |
|
5.5 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands RMB) |
For the three months ended |
||||
|
2023 |
|
2024 |
|
YoY |
B2C Net Revenue |
|
|
|
|
|
Product |
106,608 |
|
72,206 |
|
-32.3 % |
Service |
6,330 |
|
4,214 |
|
-33.4 % |
|
|
|
|
|
|
Sub-Total |
112,938 |
|
76,420 |
|
-32.3 % |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Products Sold |
87,720 |
|
58,793 |
|
-33.0 % |
|
|
|
|
|
|
Segment Profit |
25,218 |
|
17,627 |
|
-30.1 % |
Segment Profit % |
22.3 % |
|
23.1 % |
|
|
(3) For segment reporting purposes, purchase rebates are allocated to the B2B segment and B2C segments primarily based on the amount of cost of products sold for each segment. Cost of products sold does not include other direct costs related to cost of product sales such as shipping and handling expense, payroll and benefits of logistic staff, logistic centers rental expenses and depreciation expenses, which are recorded in the fulfillment expenses. Cost of service revenue is recorded in the operating expense. |
Operating costs and expenses were RMB3.5 billion (
-
Cost of products sold was RMB3.3 billion (
US$459.8 million ), representing a decrease of 4.1% from RMB3.5 billion in the same quarter of last year. -
Fulfillment expenses were RMB88.5 million (
US$12.3 million ), representing a decrease of 13.8% from RMB102.7 million in the same quarter of last year. Fulfillment expenses accounted for 2.5% of net revenues this quarter as compared to 2.8% in the same quarter of last year. -
Selling and marketing expenses were RMB80.4 million (
US$11.1 million ), representing a decrease of 10.0% from RMB89.2 million in the same quarter of last year. Excluding the share-based compensation expenses ofRMB1.9 million for the quarter andRMB1.1 million for the same quarter last year, respectively, selling and marketing expenses as a percentage of net revenues, accounted for 2.2% in the quarter as compared to 2.4% in the same quarter of last year. -
General and administrative expenses were RMB19.1 million (
US$2.6 million ), representing a decrease of 53.8% from RMB41.3 million in the same quarter of last year. Excluding the share-based compensation expenses ofRMB2.1 million for the quarter andRMB19.0 million for the same quarter last year, respectively, general and administrative expenses as a percentage of net revenues, accounted for 0.5% in the quarter as compared to 0.6% in the same quarter of last year. -
Technology expenses were RMB18.3 million (
US$2.5 million ), representing a decrease of 27.7% from RMB25.3 million in the same quarter of last year. Excluding the share-based compensation expenses ofRMB1.2 million for the quarter andRMB4.1 million for the same quarter last year, respectively, Technology expenses as a percentage of net revenues, accounted for 0.5% in the quarter as compared to 0.6% in the same quarter of last year.
Income from operations was RMB3.7 million (
Non-GAAP income from operations was RMB8.9 million (
Net loss was RMB2.7 million (
Non-GAAP net income
(4) was RMB2.5 million (
Net loss attributable to ordinary shareholders was RMB13.8 million (
Non-GAAP net loss attributable to ordinary shareholders
(5) was
(4) Non-GAAP net income represents net income excluding share-based compensation expenses, net of tax. Considering the impact of accretion of redeemable non-controlling interest for the first quarter 2024, non-GAAP net income is used as a more meaningful measurement of the operation performance of the Company. |
(5) Non-GAAP net loss attributable to ordinary shareholders represents net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. |
As of
Conference Call
111's management team will host an earnings conference call at
Details for the conference call are as follows:
Event Title:
Registration Link: https://s1.c-conf.com/diamondpass/10038645-oelc5s.html
All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique Registration ID, which can be used to join the conference call.
Please dial in 15 minutes before the call is scheduled to begin and provide the Direct Event passcode and unique Registration ID you have received upon registering to join the call.
A telephone replay of the call will be available after the conclusion of the conference call until
International: +61 7 3107 6325
Conference ID: 10038645
A live and archived webcast of the conference call will be available on the website at https://edge.media-server.com/mmc/p/83ojreww.
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses non-GAAP income from operations, non-GAAP net income, non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS, as supplemental measures to review and assess its operating performance. The Company defines non-GAAP income from operations as income (loss) from operations excluding share-based compensation expenses. The Company defines non-GAAP net income as net loss excluding share-based compensation expenses, net of tax. The Company defines non-GAAP net loss attributable to ordinary shareholders as net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. The Company defines non-GAAP loss per ADS as net loss attributable to ordinary shareholders per ADS excluding share-based compensation expenses, net of tax per ADS. 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
The Company believes that non-GAAP income from operations, non-GAAP net income, non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that it includes in income (loss) from operations and net loss. Share-based compensation expenses is a non-cash expense that varies from period to period. As a result, management excludes the items from its internal operating forecasts and models. Management believes that the adjustments for share-based compensation expenses provide investors with a reasonable basis to measure the company's core operating performance, in a more meaningful comparison with the performance of other companies. The Company believes that non-GAAP income from operations, non-GAAP net income, non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS provide useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the management in their financial and operational decision-making.
The non-GAAP financial measures are not defined under
The Company compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable
Reconciliation of the non-GAAP financial measures to the most comparable
Exchange Rate Information Statement
This announcement contains translations of certain RMB amounts into
Forward-Looking Statements
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the
About
For more information on 111, please visit: http://ir.111.com.cn/.
For more information, please contact:
Investor Relations
Email: ir@111.com.cn
Media Relations
Email: press@111.com.cn
Phone: +86-021-2053 6666 (
|
|||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(In thousands, except for share and per share data) |
|||||||
|
|
|
|
|
|
||
|
As of |
|
As of |
||||
|
|
|
|
||||
|
RMB |
|
|
RMB |
|
US$ |
|
ASSETS |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
603,523 |
|
|
584,391 |
|
80,937 |
|
Restricted Cash |
20,025 |
|
|
22,938 |
|
3,177 |
|
Short-term investments |
50,143 |
|
|
20,000 |
|
2,770 |
|
Accounts receivable, net |
536,823 |
|
|
468,962 |
|
64,950 |
|
Notes Receivable |
77,598 |
|
|
66,056 |
|
9,149 |
|
Inventories |
1,419,396 |
|
|
1,432,778 |
|
198,437 |
|
Prepayments and other current assets |
225,823 |
|
|
190,385 |
|
26,368 |
|
Total current assets |
2,933,331 |
|
|
2,785,510 |
|
385,788 |
|
Property and equipment, net |
34,340 |
|
|
30,959 |
|
4,288 |
|
Intangible assets, net |
2,256 |
|
|
2,052 |
|
284 |
|
Long-term investments |
2,000 |
|
|
2,000 |
|
277 |
|
Other non-current assets |
13,310 |
|
|
13,160 |
|
1,823 |
|
Operating lease right-of-use assets |
103,799 |
|
|
90,892 |
|
12,588 |
|
Total Assets |
3,089,036 |
|
|
2,924,573 |
|
405,048 |
|
|
|
|
|
|
|
|
|
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Short-term borrowings |
338,075 |
|
|
206,990 |
|
28,668 |
|
Accounts payable |
1,588,693 |
|
|
1,641,885 |
|
227,398 |
|
Accrued expense and other current liabilities |
818,295 |
|
|
735,523 |
|
101,869 |
|
Total Current liabilities |
2,745,063 |
|
|
2,584,398 |
|
357,935 |
|
Long-term operating lease liabilities |
62,624 |
|
|
54,671 |
|
7,572 |
|
Other Non-Current liabilities |
5,245 |
|
|
6,147 |
|
850 |
|
Total Liabilities |
2,812,932 |
|
|
2,645,216 |
|
366,357 |
|
|
|
|
|
|
|
|
|
MEZZANINE EQUITY |
|
|
|
|
|
|
|
Redeemable non-controlling interests |
870,825 |
|
|
881,742 |
|
122,120 |
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' DEFICIT |
|
|
|
|
|
|
|
Ordinary shares Class A |
32 |
|
|
32 |
|
5 |
|
Ordinary shares Class B |
25 |
|
|
25 |
|
3 |
|
|
(5,887) |
|
|
(5,887) |
|
(815) |
|
Additional paid in capital |
3,169,114 |
|
|
3,174,290 |
|
439,634 |
|
Accumulated deficit |
(3,819,249) |
|
|
(3,833,024) |
|
(530,868) |
|
Accumulated other Comprehensive Income |
72,514 |
|
|
73,277 |
|
10,149 |
|
Total shareholders' deficit |
(583,451) |
|
|
(591,287) |
|
(81,892) |
|
Non-controlling interest |
(11,270) |
|
|
(11,098) |
|
(1,537) |
|
Total Deficit |
(594,721) |
|
|
(602,385) |
|
(83,429) |
|
Total liabilities, mezzanine equity and deficit |
3,089,036 |
|
|
2,924,573 |
|
405,048 |
|
|
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
||||||||
(In thousands, except for share and per share data) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|||||
|
|
|
2023 |
|
2024 |
|||
|
|
|
RMB |
|
|
RMB |
|
US$ |
Net Revenues |
|
|
3,696,761 |
|
|
3,528,429 |
|
488,682 |
Operating Costs and expenses: |
|
|
|
|
|
|
|
|
Cost of products sold |
|
|
(3,460,548) |
|
|
(3,319,896) |
|
(459,800) |
Fulfillment expenses |
|
|
(102,650) |
|
|
(88,523) |
|
(12,260) |
Selling and marketing expenses |
|
|
(89,240) |
|
|
(80,360) |
|
(11,130) |
General and administrative expenses |
|
|
(41,317) |
|
|
(19,074) |
|
(2,642) |
Technology expenses |
|
|
(25,316) |
|
|
(18,309) |
|
(2,536) |
Other operating income,net |
|
|
578 |
|
|
1,457 |
|
202 |
Total Operating costs and expenses |
|
|
(3,718,493) |
|
|
(3,524,705) |
|
(488,166) |
(Loss) Income from operations |
|
|
(21,732) |
|
|
3,724 |
|
516 |
Interest income |
|
|
1,949 |
|
|
1,966 |
|
272 |
Interest expense |
|
|
(4,272) |
|
|
(7,982) |
|
(1,106) |
Foreign exchange loss (gain) |
|
|
1,634 |
|
|
(219) |
|
(30) |
Other Income (loss), net |
|
|
3,064 |
|
|
(123) |
|
(17) |
Loss before income taxes |
|
|
(19,357) |
|
|
(2,634) |
|
(365) |
Income tax expense |
|
|
- |
|
|
(51) |
|
(7) |
Net Loss |
|
|
(19,357) |
|
|
(2,685) |
|
(372) |
Net Loss attributable to non-controlling interest |
|
|
1,400 |
|
|
(173) |
|
(24) |
Net Loss attributable to redeemable non-controlling interest |
|
|
1,548 |
|
|
289 |
|
40 |
Adjustment attributable to redeemable non-controlling interest |
|
|
(15,378) |
|
|
(11,206) |
|
(1,552) |
Net Loss attributable to ordinary shareholders |
|
(31,787) |
|
|
(13,775) |
|
(1,908) |
|
Other comprehensive loss |
|
|
|
|
|
|
|
|
Unrealized gains of available -for-sale securities |
|
|
2,135 |
|
|
(34) |
|
(5) |
Realized gains of available-for-sale debt securities |
|
|
(1,902) |
|
|
177 |
|
25 |
Foreign currency translation adjustments |
|
|
(3,113) |
|
|
620 |
|
86 |
Comprehensive loss |
|
|
(34,667) |
|
|
(13,012) |
|
(1,802) |
Loss per ADS: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
(0.38) |
|
|
(0.16) |
|
(0.02) |
Weighted average number of shares used in computation of loss per share |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
167,329,609 |
|
|
171,220,973 |
|
171,220,973 |
|
||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||
(In thousands) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
||||
|
|
2023 |
|
2024 |
||
|
|
RMB |
|
RMB |
|
US$ |
Net cash (used in) provided by operating activities |
|
(121,328) |
|
108,438 |
|
15,019 |
Net cash (used in) provided by investing activities |
|
(53,188) |
|
29,742 |
|
4,119 |
Net cash provided by (used in) financing activities |
|
78,497 |
|
(155,471) |
|
(21,532) |
Effect of exchange rate changes on cash and cash equivalents, and restricted cash |
|
(1,491) |
|
1,072 |
|
148 |
Net decrease in cash and cash equivalents |
|
(97,510) |
|
(16,219) |
|
(2,246) |
Cash and cash equivalents, and restricted cash at the beginning of the period |
|
716,791 |
|
623,548 |
|
86,360 |
Cash and cash equivalents, and restricted cash at the end of the period |
|
619,281 |
|
607,329 |
|
84,114 |
|
||||||
Unaudited Reconciliation of GAAP and Non-GAAP Results |
||||||
(In thousands, except for share and per share data) |
||||||
|
||||||
|
|
For the three months ended |
||||
|
|
2023 |
|
2024 |
||
|
|
RMB |
|
RMB |
|
US$ |
(Loss) Income from operations |
|
(21,732) |
|
3,724 |
|
516 |
Add: Share-based compensation expenses |
|
24,208 |
|
5,171 |
|
716 |
Non-GAAP income from operations |
|
2,476 |
|
8,895 |
|
1,232 |
|
|
|
|
|
|
|
Net Loss |
|
(19,357) |
|
(2,685) |
|
(372) |
Add: Share-based compensation expenses |
|
24,208 |
|
5,171 |
|
716 |
Non-GAAP net Income |
|
4,851 |
|
2,486 |
|
344 |
|
|
|
|
|
|
|
Net Loss attributable to ordinary shareholders |
|
(31,787) |
|
(13,775) |
|
(1,908) |
Add: Share-based compensation expenses |
|
24,208 |
|
5,171 |
|
716 |
Non-GAAP net Loss attributable to ordinary shareholders |
|
(7,579) |
|
(8,604) |
|
(1,192) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per ADS(6): Basic and diluted |
|
(0.38) |
|
(0.16) |
|
(0.02) |
Add: Share-based compensation expenses per ADS(6), net of tax |
|
0.28 |
|
0.06 |
|
0.00 |
Non-GAAP Loss per ADS(6) |
|
(0.10) |
|
(0.10) |
|
(0.02) |
|
|
|
|
|
|
|
(6) Every one ADSs represent two Class A ordinary shares. |
|
|
|
|
|
|
View original content:https://www.prnewswire.com/news-releases/111-inc-announces-first-quarter-2024-unaudited-financial-results-302154037.html
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