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Zepp Well being Corp. Stories First Quarter 2021 Unaudited Monetary Outcomes

BEIJING, Might 13, 2021 /PRNewswire/ — Zepp Well being Corp. (NYSE: ZEPP) at the moment reported income of RMB1.1 billion (US$175.1 million); GAAP diluted web loss per share of RMB0.16 (US$0.02); and GAAP diluted web loss per ADS of RMB0.64 (US$0.10) for the primary quarter ended March 31, 2021. Every ADS represents 4 (4) Class A bizarre shares.

“We reached the excessive finish of our steering vary, leveraging the rising income from sale of our self-branded Amazfit and Zepp merchandise, which grew 84% year-over-year within the first quarter, regardless of the persevering with pandemic prevailing in a lot of our key markets,” mentioned Wang Huang, Chairman and CEO of Zepp Well being. “First quarter outcomes included regular seasonality, and anticipation of the Xiaomi Band 6, which can profit the second quarter. With the gross sales information of our self-branded merchandise within the first quarter, and plenty of thrilling product enhancements but to return, we’re effectively positioned and optimistic concerning the upcoming quarters this yr.”

Added Chief Monetary Officer, Leon Deng, “Our sturdy steering for the second quarter displays our expectation of continued power of our Amazfit and Zepp manufacturers, in addition to new Xiaomi shipments. Whereas we proceed to handle bills, the continuing pandemic has introduced challenges to our expense protection, and we hold investing within the development of our enterprise. We count on to return to GAAP profitability in Q2 this yr.”

First Quarter 2021 Monetary Abstract







For the Three Months Ended


GAAP in hundreds of thousands, apart from percentages and per share/ADS quantities


Mar. 31, 2021

Mar. 31, 2020[1]


Income RMB


1,147.3

1,088.5


Income USD


175.1

153.7


Gross Margin


22.5%

22.5%


Web revenue/(loss) attributable to Zepp Well being Corp. RMB


(40.4)

19.2


Adjusted web revenue/(loss) attributable to Zepp Well being Corp.
RMB[2]


(29.0)

25.5







Diluted web revenue/(loss) per share RMB


(0.16)

0.07


Diluted web revenue/(loss) per ADS USD


(0.10)

0.04


Adjusted diluted web revenue/(loss) per share RMB[3]


(0.12)

0.10


Adjusted diluted web revenue/(loss) per ADS USD


(0.07)

0.06


Models Shipped


6.3

7.6


[1] The USD numbers in 2020 are referenced with the prior 6-Ok disclosures.

[2] Adjusted web revenue/(loss) attributable to Zepp Well being Corp. is a non-GAAP measure, which excludes share-based compensation bills. See “Reconciliation of GAAP and Non-GAAP Outcomes” on the finish of this press launch.

[3] Adjusted diluted web revenue/(loss) is the abbreviation of Adjusted web revenue/(loss) attributable to Zepp Well being Corp., which is a non-GAAP measure and excludes share-based compensation bills attributable to Zepp Well being Corp., and is used because the numerator in computation of adjusted primary and diluted web revenue/(loss) per ADS attributable to Zepp Well being Corp..

First Quarter 2021 Monetary Outcomes

Income

Whole items shipped within the first quarter 2021 decreased by 17.1% year-over-year to six.3 million, in contrast with 7.6 million within the first quarter of 2020. This was pushed by a 34.3% lower in items of merchandise constructed for Xiaomi, partially offset by a 111.1% improve in unit shipments of Amazfit and Zepp branded merchandise.

Revenues for the primary quarter of 2021 reached RMB1.1 billion (US$175.1 million), a rise of 5.4% from the primary quarter of 2020. Within the first quarter of 2021, income from Xiaomi merchandise decreased by 39.9% and income from self-branded merchandise elevated by 84.4%, every in contrast with the identical interval in 2020, primarily pushed by the corporate’s well-liked premium GT sequence, the fundamental Bip and Pop fashions, and the rugged T-Rex. Each sequential and year-over-year quarterly income adjustments may be affected by the seasonality of buy patterns in addition to by timing of recent product introductions.

Influence of COVID-19 on Our Enterprise

The impacts of COVID-19 continued within the first quarter 2021, together with some manufacturing delays that affected stock availability for some new merchandise. In key European, Indian and South American markets for Zepp Well being merchandise, continued battles with an infection charges and lockdowns dampened the corporate’s first quarter 2021 gross sales. The corporate’s prices and profitability had been affected within the first quarter by the termination of subsidies to enterprises that had been affected by the pandemic granted by the Chinese language authorities, in addition to exemptions for social insurance coverage contributions, which had been in impact in 2020.

Gross Margin

Gross margin within the first quarter of 2021 was 22.5%, constant in the identical interval in 2020. Gross margin within the first quarter of 2021 was affected by mannequin run-outs and product combine. Gross margin and gross revenue had been affected by product combine as totally different merchandise had totally different margin contributions, and these might change over the lifetime of a product.  

Analysis & Growth

Analysis and growth expense within the first quarter of 2021 was RMB152.3 million, growing 28.7% year-over yr, and comprising 13.3% of income versus 10.9% within the year-ago interval. The expansion was primarily attributed to greater wage and wages prices primarily pushed by extra headcounts, offsetting by the higher useful resource consumption administration throughout testing course of. Now we have carried out expense management in R&D actions since second half-year of 2020, and we’ve got seen optimistic ends in 2021.

Gross sales & Advertising and marketing

Gross sales and Advertising and marketing expense for the primary quarter of 2021 was RMB90.8 million, growing 65.5% year-over-year, and comprising 7.9% of income, in comparison with 5.0% of income in the identical interval in 2020. Greater gross sales and advertising and marketing expense in 2021 was pushed by elevated commercial promotion bills and gross sales and advertising and marketing headcounts. S&M expense decreased sequentially by RMB26.1 million from the fourth quarter 2020.  

Normal & Administrative

Normal and Administrative expense was RMB65.3 million within the first quarter 2021, growing 28.3% year-over-year, and comprising 5.7% of income, in comparison with 4.7% in the identical interval in 2020, primarily attributed to greater wage and wages prices and better depreciation and rental price because of workplace growth. Now we have additionally carried out expense management in G&A actions for the reason that second half-year of 2020, and we’ve got seen optimistic ends in 2021.  

Working Revenue/(Loss) and Bills

Whole Working Expense for the primary quarter 2021 was RMB308.4 million, which elevated by 37.6% from the identical interval in 2020, comprising 26.9% of income within the first quarter 2021, in comparison with 20.6% within the first quarter 2020. Greater bills mirror investments in new product growth and world market growth. 

Whole working expense declined sequentially in every of the final two quarters from the third quarter 2020 as the corporate had instituted new expense management efforts. The corporate will proceed to train management on bills sooner or later, to enhance working effectivity as a complete.

Working Loss for the primary quarter 2021 was RMB50.2 million, which decreased by RMB70.7 million from working revenue RMB20.5 million for a similar interval in 2020.

Liquidity and Capital Sources

On March 31, 2021, the Firm had money and money equivalents of RMB1,090.5 million (US$166.4 million), in contrast with RMB2,273.3 million as of December 31, 2020. Within the first quarter 2021, the corporate used RMB863.7 million to put money into Jiangsu Yitong Excessive-Tech Co., Ltd.. 

Outlook

For the second quarter of 2021, the administration of the Firm at present expects:

–  Web revenues to be between RMB1.7 billion and RMB1.8 billion, in contrast with RMB1.14 billion within the second quarter of 2020.

The above outlook is predicated on the present market situations and displays the Firm administration’s present and preliminary estimates of market and working situations and buyer demand, that are all topic to vary.

Convention Name

The Firm’s administration will maintain a convention name at 8:00 a.m. Japanese Time on Thursday, Might 13, 2021 (8:00 p.m. Beijing Time on Might 13, 2021) to debate monetary outcomes and reply questions from buyers and analysts. Listeners could entry the decision by dialing:

US (Toll Free):

+1-888-346-8982

Worldwide:

+1-412-902-4272

Mainland China (Toll Free):

400-120-1203

Hong Kong (Toll Free):

800-905-945

Hong Kong:

+852-3018-4992

Individuals ought to dial-in a minimum of 10 minutes earlier than the scheduled begin time and ask to be linked to the decision for “Zepp Well being Corp.”.

Moreover, a reside and archived webcast of the convention name will likely be out there at https://ir.zepp.com/investor.

A phone replay will likely be out there one hour after the decision till Might 20, 2021 by dialing:

US (Toll Free):

+1-877-344-7529

Worldwide:

+1-412-317-0088

Replay Passcode:

10156106

About Zepp Well being Company (NYSE: ZEPP)

Zepp Well being modified its title from Huami Corp. (HMI) on February 25, 2021 to emphasise its well being focus with a reputation that resonates throughout languages and cultures globally. The corporate’s mission continues to be connecting well being with expertise. Since its inception in 2013, Zepp Well being has developed a platform of proprietary expertise together with AI chips, biometric sensors, and knowledge algorithms, which drive a broadening line of good well being units for customers, and knowledge analytics providers for inhabitants well being. Zepp Well being is among the largest world builders of good wearable well being and client health units, delivery 46 million items in 2020. Zepp Well being Corp. is predicated in Hefei, China, with U.S. operations, Zepp Well being USA, primarily based in Cupertino, Calif..

Use of Non-GAAP Measures

We use adjusted web revenue, a non-GAAP monetary measure, in evaluating our working outcomes and for monetary and operational decision-making functions. Adjusted web revenue represents web revenue excluding share-based compensation bills, and such adjustment has no affect on revenue tax. Adjusted web revenue attributable to Zepp Well being Corp. is a non-GAAP measure, which excludes share-based compensation bills attributable to Zepp Well being Corp., and is used because the numerator in computation of adjusted web revenue per share and per ADS attributable to Zepp Well being Corp..

We consider that adjusted web revenue and adjusted web revenue attributable to Zepp Well being Corp. assist determine underlying traits in our enterprise that might in any other case be distorted by the impact of sure bills that we embrace in web revenue and web revenue attributable to Zepp Well being Corp.. We consider that adjusted web revenue and adjusted web revenue attributable to Zepp Well being Corp. supplies helpful details about our working outcomes, enhances the general understanding of our previous efficiency and future prospects and permits for higher visibility with respect to key metrics utilized by our administration in its monetary and operational decision-making.

Adjusted web revenue and adjusted web revenue attributable to Zepp Well being Corp., shouldn’t be thought of in isolation or construed as an alternative choice to web revenue, primary and diluted web revenue per share and per ADS attributable to Zepp Well being Corp. or every other measure of efficiency or as an indicator of our working efficiency. Buyers are inspired to evaluation the historic non-GAAP monetary measures to essentially the most straight comparable GAAP measures. Adjusted web revenue and adjusted web revenue attributable to bizarre shareholders, introduced right here might not be corresponding to equally titled measures introduced by different corporations. Different corporations could calculate equally titled measures in another way, limiting their usefulness as comparative measures to our knowledge. We encourage buyers and others to evaluation our monetary data in its entirety and never depend on a single monetary measure.

Change Charge

The Firm’s enterprise is primarily carried out in China and the numerous majority of revenues generated are denominated in Renminbi (“RMB”). This announcement comprises foreign money conversions of RMB quantities into U.S. {dollars} (“US$”) solely for the comfort of the reader. Except in any other case famous, all translations from RMB to US$ are made at a price of RMB6.5518 to US$1.00, the efficient midday shopping for price for March 31, 2021 as set forth within the H.10 statistical launch of the Federal Reserve Board. No illustration is made that the RMB quantities might have been, or may very well be, transformed, realized or settled into US$ at that price on March 31, 2021, or at every other price.

Secure Harbor Assertion

This announcement comprises forward-looking statements. These statements are made beneath the “secure harbor” provisions of the U.S. Personal Securities Litigation Reform Act of 1995. These forward-looking statements may be recognized by terminology equivalent to “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “assured” and related statements. Statements that aren’t historic info, together with statements concerning the Firm’s beliefs and expectations, are forward-looking statements. Ahead-looking statements contain inherent dangers and uncertainties. A variety of elements might trigger precise outcomes to vary materially from these contained in any forward-looking assertion, together with however not restricted to the next: the cooperation with Xiaomi, the popularity of the Firm’s self-branded merchandise; the Firm’s development methods; traits and competitors in world wearable expertise market; adjustments within the Firm’s revenues and sure price or expense accounting insurance policies; governmental insurance policies regarding the Firm’s business and basic financial situations in China and the worldwide. Additional data relating to these and different dangers is included within the Firm’s filings with the US Securities and Change Fee. All data supplied on this press launch and within the attachments is as of the date of this press launch, and the Firm undertakes no obligation to replace any forward-looking assertion, besides as required beneath relevant regulation.

For investor and media inquiries, please contact:

In China:
Zepp Well being Corp.
Grace Yujia Zhang
E-mail: [email protected]

The Piacente Group, Inc.
Yang Music
Tel: +86-10-6508-0677
E-mail: [email protected]

In the US:
Zepp Well being Corp.
Brad Samson
Tel: 1+714-955-3951
E-mail: [email protected] 

Zepp Well being Corp.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Quantities in 1000’s of Renminbi (“RMB”) and U.S. {dollars} (“US$”)

apart from variety of shares and per share knowledge, or in any other case famous)









As of December 31,


As of March 31,



2020


2021



RMB


RMB


US$








Property







Present property:







Money and money equivalents


2,273,349


1,090,523


166,446

Restricted money


2,401


2,306


352

Time period deposit


5,000


5,000


763

Accounts receivable


298,038


333,191


50,855

Quantities due from associated events, present


860,213


382,016


58,307

Inventories


1,217,537


1,452,143


221,640

Brief-term investments


18,430


18,736


2,860

Pay as you go bills and different present property


152,898


216,970


33,116

Whole present property


4,827,866


3,500,885


534,339








Property, plant and tools, web


124,619


150,896


23,031

Intangible asset, web


145,213


141,204


21,552

Goodwill


62,515


62,772


9,581

Lengthy-term investments


443,986


1,492,791


227,844

Deferred tax property


120,190


129,639


19,787

Different non-current property


28,165


19,767


3,017

Non-current working lease right-of-use property


151,165


140,100


21,383

Whole property


5,903,719


5,638,054


860,534

Zepp Well being Corp.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Quantities in 1000’s of Renminbi (“RMB”) and U.S. {dollars} (“US$”)

apart from variety of shares and per share knowledge, or in any other case famous)









As of December 31, 


As of March 31,



2020


2021



RMB


RMB


US$








Liabilities







Present liabilities:







Accounts payable


1,951,335


1,339,017


204,374

Advance from prospects


42,502


27,782


4,240

Quantity because of associated events, present


11,185


5,075


775

Accrued bills and different present liabilities


252,275


307,774


46,975

Revenue tax payables


27,706


15,304


2,336

Brief-term financial institution borrowings


504,671


680,376


103,846

Whole present liabilities


2,789,674


2,375,328


362,546

Deferred tax liabilities


22,374


22,103


3,374

Lengthy-term borrowing


60,000


201,570


30,766

Different non-current liabilities


185,168


214,577


32,751

Non-current working lease liabilities


116,245


105,471


16,098

Whole liabilities


3,173,461


2,919,049


445,535

Zepp Well being Corp.


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


(Quantities in 1000’s of Renminbi (“RMB”) and U.S. {dollars} (“US$”)


apart from variety of shares and per share knowledge, or in any other case famous)











As of December 31,


As of March 31,



2020


2021



RMB


RMB


US$








Fairness







Atypical shares


157


158


24

Extra paid-in capital


1,552,109


1,573,194


240,116

Accrued retained earnings


1,133,368


1,092,940


166,815

Accrued different complete revenue


44,624


48,417


7,388

Whole Zepp Well being Corp. shareholders’ fairness


2,730,258


2,714,709


414,343

Noncontrolling pursuits



4,296


656

Whole fairness


2,730,258


2,719,005


414,999

Whole liabilities and fairness


5,903,719


5,638,054


860,534









Zepp Well being Corp.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Quantities in 1000’s of Renminbi (“RMB”) and U.S. {dollars} (“US$”)

apart from variety of shares and per share knowledge, or in any other case famous)




For the Three Months Ended March 31,



2020


2021



RMB


RMB


US$








Revenues


1,088,461


1,147,263


175,107

Price of revenues


843,901


889,058


135,697

Gross revenue


244,560


258,205


39,410

Working bills:







Promoting and advertising and marketing


54,843


90,787


13,857

Normal and administrative


50,883


65,285


9,964

Analysis and growth


118,336


152,330


23,250

Whole working bills


224,062


308,402


47,071

Working revenue/(loss)


20,498


(50,197)


(7,661)

Different revenue and bills:







Curiosity revenue


7,671


5,728


874

Curiosity expense


(724)


(6,648)


(1,015)

Different revenue (bills), web


(8,431)


2,501


382

Acquire from honest worth change of long-term funding


1,293



Revenue/(loss) earlier than revenue tax and revenue/(loss) from fairness
methodology funding


20,307


(48,616)


(7,420)

Revenue tax (bills)/advantages


(2,033)


7,598


1,160

Revenue/(loss) earlier than loss from fairness methodology investments


18,274


(41,018)


(6,260)

Web (loss)/revenue from fairness methodology investments


(332)


457


70

Web revenue/(loss)


17,942


(40,561)


(6,190)

Much less: Web loss attributable to noncontrolling curiosity


(1,226)


(134)


(20)

Web revenue/(loss) attributable to Zepp Well being Corp.


19,168


(40,427)


(6,170)

Web revenue/(loss) per share attributable to Zepp Well being Corp.







Primary revenue/(loss) per bizarre share


0.08


(0.16)


(0.02)

Diluted revenue/(loss) per bizarre share


0.07


(0.16)


(0.02)








Web revenue/(loss) per ADS (4 bizarre shares equal to 1 ADS)







ADS – primary


0.31


(0.64)


(0.10)

ADS – diluted


0.30


(0.64)


(0.10)








Weighted common variety of shares utilized in computing web
revenue/(loss)
 per share

Atypical share – primary


247,657,168


250,794,275


250,794,275

Atypical share – diluted


259,574,866


250,794,275


250,794,275

Zepp Well being Corp.

Reconciliation of GAAP and Non-GAAP Outcomes

(Quantities in 1000’s of Renminbi (“RMB”) and U.S. {dollars} (“US$”)

apart from variety of shares and per share knowledge, or in any other case famous)










For the Three Months Ended March 31,



2020


2021



RMB


RMB


US$








Web revenue/(loss) attributable to Zepp Well being Corp.


19,168


(40,427)


(6,170)

Share-based compensation bills


6,378


11,378


1,736

Adjusted web revenue/(loss) attributable to Zepp Well being
Corp.2


25,546


(29,049)


(4,434)








Adjusted web revenue/(loss) per share attributable to 
Zepp Well being Corp.







Adjusted primary revenue/(loss) per bizarre share


0.10


(0.12)


(0.02)

Adjusted diluted revenue/(loss) per bizarre share


0.10


(0.12)


(0.02)








Adjusted web revenue/(loss) per ADS (4 bizarre
shares equal to 1 ADS)







ADS – primary


0.41


(0.46)


(0.07)

ADS – diluted


0.39


(0.46)


(0.07)








Weighted common variety of shares utilized in 
computing adjusted web revenue/(loss) per share







Atypical share – primary


247,657,168


250,794,275


250,794,275

Atypical share – diluted


259,574,866


250,794,275


250,794,275








Share-based compensation bills included 
are follows:







Price of revenues


7



Promoting and advertising and marketing


632


160


24

Normal and administrative


4,097


8,218


1,254

Analysis and growth


1,642


3,000


458

Whole


6,378


11,378


1,736

SOURCE Zepp Well being Corp.

Associated Hyperlinks

www.huami.com

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