GUANGZHOU, China, Aug. 24, 2023 /PRNewswire/ -- Viomi Technology Co., Ltd ("Viomi" or the "Company") (NASDAQ: VIOT), a leading IoT @ Home technology company in China, today announced its unaudited financial results for the six months ended June 30, 2023.

First Half 2023 Financial and Operating Highlights 

  • Net revenues were RMB1,304.4 million (US$179.9 million), compared to RMB1,636.4 million for the same period of 2022.
  • Gross margin was 22.0%.
  • Number of cumulative household users reached approximately 8.1 million, compared to approximately 7.2 million for the same period of 2022.
  • Percentage of household users with at least two connected products reached 22.9%, compared to 22.0% for the same period of 2022.

Mr. Xiaoping Chen, Founder and CEO of Viomi, commented, "In the first half of 2023, constrained by a lukewarm consumer sentiment and as a result of the Company's strategic adjustments, our total revenue recorded RMB1.3 billion, representing a year-over-year decrease of 20%, while the gross margin declined by 1.9 percentage points year-over-year. Nevertheless, in the meantime, we optimized our product mix by focusing on our core product categories, leading to an increasing share of revenue from water purification products from 17% for first half of 2022 to 22% for the same period in 2023. We believe that optimizing our product mix will benefit the sustainability of our long-term development. Additionally, we streamlined our organizational structure and improved operational efficiency, translating to a narrowed net loss with a 30.3% decrease in operating expenses and a decline of 1.4 percentage point in net loss margin year-over-year for the first half of 2023."

"We have achieved market-leading industrial chain capabilities in the water purification products, which include: the capability of independently achieving advanced filtration technology and material manufacturing processes; the capability of researching, developing, and producing core components; and the capability of creating a comprehensive set of proprietary solutions which include complete machine assembly, customized automated production lines, and end-to-end data collection and analysis. In July, Guangdong Lizi Technology Co. Ltd., one of our subsidiaries, was designated as a national-level specialized and innovative 'Little Giant' enterprise, owing to its remarkable R&D and innovation capabilities in the water purification industry. As one of the highest-level and most authoritative evaluation ratings for nationwide enterprise, this honor recognizes and affirms our comprehensive strength in the industrial chain of water purification."

"In regard to the Company's other product categories, we utilize a flexible combination of original equipment manufacturer ("OEM") and independent R&D to lay out our product matrix, and in the meantime, we consistently deepen our investment in and control over core technologies to develop differentiated, intelligent whole-house products. On April 28, 2023, we introduced a series of high-tech products at our Spring New Product Launching Event, featuring enhanced iterations of our one-stop IoT home solutions, such as our Master 3 Pro formaldehyde-removing AI vertical air conditioner and Super 2 Pro AI vertical air conditioner equipped with a fresh-air system, which improve the indoor air quality to protect users' health. Our Master 3 ultra-thin built-in refrigerator and washing machine set, together with our Master 3 Pro gas-electric hybrid water heater and our brand-new intelligent lighting system, also made a debut, striving to set a new trend in the home decoration industry."

"With the widespread adoption of new energy vehicles and smart terminal devices, as well as the breakthrough in generative AI technology, we believe the era of intelligence has arrived. In our opinion, integrating AI's power into whole-house intelligence will not only enable a revolutionary user experience, but also inspire unprecedented creativity across the whole-house intelligent industry. With our 'hi-tech and fashionable' brand positioning, we see Viomi is at the forefront of this revolution. By steadily improving our products' perception of space and environment and upgrading our AI voice interaction technology, we have successfully transitioned our whole-house intelligence from the era of 'control', which emphasizes connectivity, to the era of 'perception', characterized by active intelligence and proactive service."

"Moving forward, we will continue to explore and capitalize on our strengths to optimize our operations, concentrating on three areas. First, we will further deepen our roots in the water purification industry and roll out more industry-leading products, creating value for consumers with higher quality, more advanced technology, and more comprehensive services. Second, we will keep focusing on fine-tuning our product mix and improving and iterating our whole-house intelligent product matrix to elevate our products' intelligent experience and deliver more helpful and user-friendly one-stop IoT home solutions. Finally, we will deepen our industrial layout, heighten our cost controls, increase our operational efficiency, and strengthen our product competitiveness to further improve operational performance. At the same time, we will maintain sufficient capital reserves to support these goals and consolidate our brand to drive robust and sustainable growth, sparing no effort to create long-term value for all of our users and shareholders," Mr. Chen concluded.

First Half 2023 Financial Results

REVENUE

Net revenues were RMB1,304.4 million (US$179.9 million), compared to RMB1,636.4 million for the same period of 2022. The decline was mainly due to a decrease in revenues from the IoT@Home portfolio as well as small appliances and others.

IoT @ Home portfolio. Revenues from the IoT @ Home portfolio decreased by 21.8% to RMB691.7 million (US$95.4 million) from RMB884.7 million for the same period of 2022. The decline was primarily due to the streamlining of SKUs in smart refrigerators and smart sweeper robots.

Home water solutions. Revenues from home water solutions increased by 1.7% to RMB286.6 million (US$39.5 million) from RMB281.9 million for the same period of 2022. The increase was primarily driven by the Company's effort to focus on water purification products.

Consumables. Revenues from consumables decreased by 21.0% to RMB135.9 million (US$18.7 million) from RMB172.1 million for the same period of 2022. The decline was primarily due to the decrease in the sales volume of water purifier filters sold to Xiaomi.

Small appliances and others. Revenues from small appliances and others decreased by 36.1% to RMB190.2 million (US$26.2 million) from RMB297.6 million for the same period of 2022, primarily due to the ongoing product portfolio adjustment within this category.

GROSS PROFIT

Gross profit was RMB286.8 million (US$39.6 million), compared to RMB391.5 million for the same period of 2022. Gross margin was 22.0%, compared to 23.9% for the same period of 2022. The decline was primarily due to a lower selling price of certain clean-up products, partially offset by increasing sales of higher-gross margin products as a result of product portfolio adjustments.

OPERATING EXPENSES

Total operating expenses decreased by 30.3% to RMB361.8 million (US$49.9 million) from RMB519.4 million for the same period of 2022, primarily attributable to the streamlined organizational structure and overall improved operational efficiency.

Research and development expenses decreased by 31.0% to RMB109.5 million (US$15.1 million) from RMB158.7 million for the same period of 2022, mainly driven by a decrease in personnel costs and optimization of the Company's ongoing research projects.

Selling and marketing expenses decreased by 33.4% to RMB213.5 million (US$29.4 million) from RMB320.7 million for the same period of 2022, mainly due to a decrease in marketing expenses, logistic expenses, and sales related personnel costs.

General and administrative expenses slightly decreased by 2.8% to RMB38.8 million (US$5.4 million), compared to RMB39.9 million for the same period of 2022, primarily due to a decrease in personnel costs, partially offset by an increase in the estimated allowance for accounts and notes receivables.

LOSS FROM OPERATIONS

Loss from operations decreased by 43.6% to RMB68.2 million (US$9.4 million) from RMB120.9 million for the same period of 2022.

Non-GAAP operating loss[1] was RMB66.9 million (US$9.2 million), compared to RMB106.9 million for the same period of 2022.

NET LOSS

Net loss attributable to ordinary shareholders of the Company was RMB54.9 million (US$7.6 million), compared to RMB89.6 million for the same period of 2022.

Non-GAAP net loss attributable to ordinary shareholders[2] of the Company was RMB53.7 million (US$7.4 million), compared to RMB75.6 million for the same period of 2022.

[1]   "Non-GAAP operating loss" is defined as loss from operation excluding share-based compensation expenses. See "Use of Non-GAAP Measures" and "Reconciliation of GAAP and Non-GAAP Results" included in this press release.

[2]   "Non-GAAP net loss attributable to ordinary shareholders of the Company" is defined as net loss attributable to ordinary shareholders of the Company excluding share-based compensation expenses. See "Use of Non-GAAP Measures" and "Reconciliation of GAAP and Non-GAAP Results" included in this press release. 

BALANCE SHEET

As of June 30, 2023, the Company had cash and cash equivalents of RMB691.5 million (US$95.4 million), restricted cash of RMB128.1 million (US$17.7 million), short-term deposits of RMB260.2 million (US$35.9 million), and short-term investments of RMB64.3 million (US$8.9 million), compared to RMB737.1 million, RMB76.1 million, RMB171.5 million, and RMB197.1 million, respectively, as of December 31, 2022.

Conference Call

The Company's management will host a conference call at 8:00 a.m. Eastern Time on Thursday, August 24, 2023 (8:00 p.m. Beijing/Hong Kong time on August 24, 2023) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

United States (toll free):

+1 888-346-8982

International:

+1 412-902-4272

Hong Kong, SAR (toll free):

800-905-945

Hong Kong, SAR:

+852 3018-4992

Mainland China (toll free):

400-120-1203

Conference ID:

7994789

A telephone replay will be available one hour after the call until August 31, 2023 by dialing:

United States:

+1 877-344-7529

International:

+1 412-317-0088

Replay Access Code:         

7994789

Additionally, a live and archived webcast of the conference call will be available at http://ir.viomi.com.

About Viomi Technology

Viomi's mission is to redefine the future home via the concept of IoT @ Home.

Viomi has developed a unique IoT @ Home platform consisting of an ecosystem of innovative IoT-enabled smart home products, together with a suite of complementary consumable products and value-added businesses. This platform provides an attractive entry point into the consumer home, enabling consumers to intelligently interact with a broad portfolio of IoT products in an intuitive and human-like manner to make daily life more convenient, efficient and enjoyable, while allowing Viomi to grow its household user base and capture various additional scenario-driven consumption events in the home environment.

For more information, please visit: http://ir.viomi.com.

Use of Non-GAAP Measures 

The Company uses non-GAAP operating income, non-GAAP net income, non-GAAP net income attributable to ordinary shareholders of the Company, non-GAAP basic and diluted net income per ordinary share and non-GAAP basic and diluted net income per American depositary share ("ADS"), which are non-GAAP financial measures, in evaluating its operating results and for financial and operational decision-making purposes. Non-GAAP operating income is income from operations excluding share-based compensation expenses. Non-GAAP net income is net income excluding share-based compensation expenses. Non-GAAP net income attributable to ordinary shareholders of the Company is net income attributable to ordinary shareholders excluding share-based compensation expenses. Non-GAAP basic and diluted net income per ordinary share is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share. Non-GAAP basic and diluted net income per ADS is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ADS used in the calculation of non-GAAP basic and diluted net income per ADS. The non-GAAP adjustments do not have any tax impact as share-based compensation expenses are non-deductible for income tax purpose.

The Company believes that non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses, which are non-cash charges, and these measures provide useful information about the Company's operating results, enhance the overall understanding of the Company's 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.

Non-GAAP financial measures should not be considered in isolation or construed as alternative to income from operations, net income, or any other measure of performance or as an indicator of the Company's operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company's data. We encourage investors and others to review its financial information in its entirety and not rely on a single financial measure. Reconciliations of the Company's non-GAAP financial measures to the most directly comparable GAAP measures are included at the end of this press release.

Exchange Rate

The Company's business is primarily conducted in China and the significant majority of revenues generated are denominated in Renminbi ("RMB"). This announcement contains currency conversions of RMB amounts into U.S. dollars ("US$") solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.2513 to US$1.00, the effective noon buying rate for June 30, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on for June 30, 2023, or at any other rate.

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," "confident" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Viomi's strategic and operational plans, contain forward-looking statements. Viomi may also make written or oral forward-looking statements in its periodic reports to the United States 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 Fourth parties. Statements that are not historical facts, including statements about the Company'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: the Company's growth strategies; the cooperation with Xiaomi, the recognition of the Company's brand; trends and competition in global IoT-enabled smart home market; development and commercialization of new products, services and technologies; governmental policies and relevant regulatory environment relating to the Company's industry and/or aspects of the business operations and general economic conditions in China and around the globe, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company'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 the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact: 

In China:

Viomi Technology Co., Ltd
Claire Ji
E-mail: ir@viomi.com.cn 

Piacente Financial Communications
Hui Fan
Tel: +86-10-6508-0677
E-mail: viomi@tpg-ir.com 

In the United States:

Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: viomi@tpg-ir.com

 

 

VIOMI TECHNOLOGY CO., LTD

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except shares, ADS, per share and per ADS data)




As of December 31,


As of June 30,



2022


2023


2023



RMB


RMB


US$








Assets







Current assets







Cash and cash equivalents


737,139


691,458


95,356

Restricted cash


76,070


128,133


17,670

Short-term deposits


171,541


260,181


35,881

Short-term investments


197,058


64,290


8,866

Accounts and notes receivable from third parties
    (net of allowance of RMB87,563 and RMB
98,205,
    as of December 31, 2022 and June 30, 2023
,
    respectively)


241,652


295,933


40,811

Accounts receivable from a related party (net of
    allowance of RMB272 and RMB249 as of
    December 31, 2022 and June 30, 2023,
    respectively)


360,497


330,161


45,531

Other receivables from related parties (net of
    allowance of RMB19 and RMB
29 as of December
    31, 2022 and June 30, 2023
, respectively)


25,021


39,030


5,382

Inventories


502,291


509,860


70,313

Prepaid expenses and other current assets


183,708


202,831


27,973








Total current assets


2,494,977


2,521,877


347,783








Non-current assets







Prepaid expenses and other non-current assets


22,856


19,366


2,671

Property, plant and equipment, net


236,432


256,134


35,322

Deferred tax assets


12,660


6,179


852

Intangible assets, net


13,671


12,265


1,691

Right-of-use assets, net


14,649


8,111


1,119

Land use rights, net


60,449


59,813


8,249

Long-term deposits-non-current portion


30,000


30,000


4,137








Total non-current assets


390,717


391,868


54,041








Total assets


2,885,694


2,913,745


401,824








Liabilities and shareholders' equity







Current liabilities







Accounts and notes payable


844,058


821,473


113,286

Advances from customers


118,369


132,169


18,227

Amount due to related parties


11,548


4,157


573

Accrued expenses and other liabilities


308,845


275,656


38,015

Short-term borrowing


-


100,000


13,791

Income tax payables


16,674


17,416


2,402

Lease liabilities due within one year


7,233


4,096


565

Long-term borrowing due within one year


20,215


25,735


3,549

Total current liabilities


1,326,942


1,380,702


190,408








Non-current liabilities







Accrued expenses and other liabilities


8,245


10,397


1,434

Long-term borrowing


114,552


129,355


17,839

Lease liabilities


6,792


2,451


338

Total non-current liabilities


129,589


142,203


19,611








Total liabilities


1,456,531


1,522,905


210,019

 

 

 

VIOMI TECHNOLOGY CO., LTD

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(All amounts in thousands, except shares, ADS, per share and per ADS data)




As of December 31,


As of June 30,



2022


2023


2023



RMB


RMB


US$








Shareholders' equity







Class A Ordinary Shares (US$0.00001 par value;
   4,800,000,000 shares authorized; 104,539,463
   and 103,340,963 shares issued and outstanding as
   of December 31, 2022 and June 30, 2023,
   respectively)


6


6


1

Class B Ordinary Shares (US$0.00001 par value;
   150,000,000 shares authorized; 102,854,550 and
   102,764,550 shares issued and outstanding as of
   December 31, 2022 and June 30, 2023,
   respectively)


6


6


1

Treasury stock


(74,703)


(77,687)


(10,714)

Additional paid-in capital


1,357,397


1,356,216


187,031

Retained earnings


174,385


119,459


16,474

Accumulated other comprehensive loss


(24,335)


(1,209)


(167)








Total equity attributable to shareholders of the Company


1,432,756


1,396,791


192,626








Non-controlling interests


(3,593)


(5,951)


(821)








Total shareholders' equity


1,429,163


1,390,840


191,805








Total liabilities and shareholders' equity


2,885,694


2,913,745


401,824

 

 

 

VIOMI TECHNOLOGY CO., LTD

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

(All amounts in thousands, except shares, ADS, per share and per ADS data)





Six Months Ended




June 30, 2022

June 30, 2023

June 30, 2023




RMB

RMB

US$

Net revenues:






A related party



623,756

571,307

78,787

Third parties



1,012,603

733,084

101,097

Total net revenues



1,636,359

 

1,304,391

179,884







Cost of revenues



(1,244,861)

(1,017,584)

(140,332)







Gross profit



391,498

286,807

39,552







Operating expenses






Research and development expenses



(158,746)

(109,494)

(15,100)

Selling and marketing expenses



(320,744)

(213,544)

(29,449)

General and administrative expenses



(39,901)

(38,801)

(5,351)







Total operating expenses



(519,391)

(361,839)

(49,900)







Other income, net



7,022

6,827

941







Loss from operations



(120,871)

(68,205)

(9,407)







Interest income and short-term investment income, net



7,237

15,595

2,151

Other non-operating income



1,199

1,839

254







Loss before income tax expenses



(112,435)

(50,771)

(7,002)







Income tax credits (expenses)



18,349

(6,513)

(898)







Net loss



(94,086)

(57,284)

(7,900)







Less: Net loss attributable to the non-controlling interest
    shareholders



(4,485)

(2,358)

(325)







Net loss attributable to ordinary shareholders of the
    Company
 



(89,601)

(54,926)

(7,575)

 

 

 

VIOMI TECHNOLOGY CO., LTD

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME (CONTINUED)

(All amounts in thousands, except shares, ADS, per share and per ADS data)





Six Months Ended




June 30, 2022

June 30, 2023

June 30, 2023




RMB

RMB

US$







Net loss attributable to ordinary shareholders of the
    Company



(89,601)

(54,926)

(7,575)







Other comprehensive income, net of tax:






Foreign currency translation adjustment



25,542

23,126

3,189







Total comprehensive loss attributable to ordinary
    shareholders of the Company



(64,059)

(31,800)

(4,386)







Net loss per ADS*






-Basic



(1.29)

(0.80)

(0.11)

-Diluted



(1.29)

(0.80)

(0.11)







Weighted average number of ADS used in calculating net loss
    per ADS






-Basic



69,598,770

68,944,237

68,944,237

-Diluted



69,598,770

68,944,237

68,944,237







Net loss per share attributable to ordinary
shareholders of the Company






-Basic



(0.43)

(0.27)

(0.04)

-Diluted



(0.43)

(0.27)

(0.04)







Weighted average number of ordinary shares used in
calculating net loss per share






-Basic



208,796,309

206,832,712

206,832,712

-Diluted



208,796,309

206,832,712

206,832,712







*Each ADS represents 3 ordinary shares.






 

(1) Share-based compensation was allocated in operating expenses as follows:




Six Months Ended




June 30, 2022

June 30, 2023

June 30, 2023




RMB

RMB

US$







General and administrative expenses



3,616

1,173

162

Research and development expenses



9,183

131

18

Selling and marketing expenses



1,175

(44)

(6)

 

 

 

VIOMI TECHNOLOGY CO., LTD

Reconciliations of GAAP and Non-GAAP Results

(All amounts in thousands, except shares, ADS, per share and per ADS data)






Six Months Ended




June 30,

2022

June 30,

 2023

June 30,

2023




RMB

RMB

US$







Loss from operations



(120,871)

(68,205)

(9,407)

Share-based compensation expenses



13,974

1,260

174







Non-GAAP operating loss



(106,897)

(66,945)

(9,233)







Net loss



(94,086)

(57,284)

(7,900)

Share-based compensation expenses



13,974

1,260

174







Non-GAAP net loss



(80,112)

(56,024)

(7,726)







Net loss attributable to ordinary shareholders of the Company



(89,601)

(54,926)

(7,575)

Share-based compensation expenses



13,974

1,260

174







Non-GAAP net loss attributable to ordinary shareholders of
    the Company



(75,627)

(53,666)

(7,401)







Non-GAAP net loss per ADS






-Basic



(1.09)

(0.78)

(0.11)

-Diluted



(1.09)

(0.78)

(0.11)







Weighted average number of ADS used in calculating Non-GAAP net loss
    per ADS






-Basic



69,598,770

68,944,237

68,944,237

-Diluted



69,598,770

68,944,237

68,944,237







Non-GAAP net loss per ordinary share






-Basic






-Diluted



(0.36)

(0.26)

(0.04)




(0.36)

(0.26)

(0.04)

Weighted average number of ordinary shares used in calculating Non-
    GAAP net loss per share






-Basic



208,796,309

206,832,712

206,832,712

-Diluted



208,796,309

206,832,712

206,832,712







Note: The non-GAAP adjustments does not have any tax impact as share-based compensation expenses are non-deductible for income tax purpose.

 

 

 

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SOURCE Viomi Technology Co., Ltd

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