EX-99.1 2 d794414dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Huami Corporation Reports Second Quarter 2019 Unaudited Financial Results

Quarterly Revenues up 36.6% Year-over-Year to RMB1,038.7 Million, Exceeding Guidance Range

BEIJING, August 19, 2019 /PRNewswire/ — Huami Corporation (“Huami” or the “Company”) (NYSE: HMI), a biometric and activity data-driven company with significant expertise in smart wearable technology, today announced its unaudited financial results for the second quarter ended June 30, 2019.

Second Quarter 2019 Financial and Operating Highlights

 

  •  

Revenues reached RMB1,038.7 million (US$151.3 million), representing an increase of 36.6% from the second quarter of 2018.

 

  •  

Gross margin was 26.7%, compared with 25.9% for the second quarter of 2018.

 

  •  

Net income attributable to Huami Corporation was RMB89.4 million (US$13.0 million), compared with RMB85.5 million for the second quarter of 2018.

 

  •  

Basic and diluted net income per American depositary share (“ADS”) attributable to ordinary shareholders of Huami Corporation was RMB1.46 (US$0.21) and RMB1.39 (US$0.20), respectively. Each ADS represents four (4) Class A ordinary shares.

 

  •  

Adjusted net income attributable to Huami Corporation1 was RMB111.7 million (US$16.3 million).

 

  •  

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation2 was RMB1.83 (US$0.27) and RMB1.73 (US$0.25), respectively. Each ADS represents four (4) Class A ordinary shares.

 

  •  

Total units shipped reached 8.3 million, compared with 5.4 million in the second quarter of 2018.

 

1 

Adjusted net income is a non-GAAP measure, which excludes share-based compensation expenses. See “Reconciliation of GAAP and Non-GAAP Results” at the end of this press release.

2 

Adjusted net income attributable to ordinary shareholders of Huami Corporation is a non-GAAP measure, which excludes share-based compensation expenses attributable to ordinary shareholders of Huami Corporation and deemed dividend for preferred shares, and is used as the numerator in computation of adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation.

First Six Months 2019 Financial and Operating Highlights

 

  •  

Revenues reached RMB1,838.3 million (US$267.8 million), representing an increase of 36.6% from the first six months of 2018.

 

  •  

Gross margin reached 26.9%, increasing from 25.5% in the first six months of 2018.

 

  •  

Net income attributable to Huami Corporation was RMB164.6 million (US$24.0 million), compared with RMB100.3 million in the first six months of 2018.

 

  •  

Basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB2.71 (US$0.39) and RMB2.56 (US$0.37), respectively. Each ADS represents four (4) Class A ordinary shares.

 

  •  

Adjusted net income attributable to Huami Corporation was RMB206.7 million (US$30.1 million), up 6.5% from the first six months of 2018.

 

  •  

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation2 was RMB3.40 (US$0.50) and RMB3.21 (US$0.47), respectively, compared with RMB3.63 and RMB3.16, respectively, in the first six months of 2018. Each ADS represents four (4) Class A ordinary shares.

 

  •  

Total units shipped reached 13.9 million, compared with 10.1 million in the first six months of 2018.

“Solid topline revenue growth and strong profitability continued in the second quarter, as our brand, product lines, footprint and strategic initiatives, all continued to develop and expand globally,” said Wang Huang, Chairman and CEO. “Our revenue performance was driven by the extremely successful second quarter launch of the Mi-Band 4, with the best sales momentum among all generations of the Mi-Band series. In addition, sales of Amazfit brand smart watches continued to outperform, with our self-branded line now ranking fifth globally in shipments, according to a recent independent market research report. Our overseas expansion was in line with the Company’s strategy and expectations.

“In the second quarter, we continued to expand and diversify our product lines. In late June and July, we launched multiple smart watch products with various functionalities designed for different customer demands. Also, our self-developed AI chip Huangshan-1 was successfully incorporated in our healthcare focused smart watch product line and significantly enhanced the health monitoring functionalities. These newly launched products and technologies create a concrete foundation for our continued leadership in the development of advanced products in the smart wearables industry. With our growth strategies in place, including international expansion, further product line diversification, and especially new product launches, we have full confidence for the second half 2019.”

David Cui, Chief Financial Officer, said, “Robust revenue growth momentum continued in the second quarter, increasing 36.6% year-over-year, as the Company benefited from strong unit sales, particularly with the newly launched Mi-Band 4. During the quarter, we shipped 8.3 million total units, up 53.7% from the same period last year.

“We also continued to make strategic and incremental investments in our R&D capabilities, including rigorous product testing for new launches, to ensure we remain on the cutting edge of smart wearable technology. Additionally, during the second quarter, we made further investments to build our brand equity by increasing our marketing efforts to promote broader awareness and adoption of our self-branded products. We are confident these investments, along with strong alliances, operational efficiency and a growing global footprint, will help ensure our healthy growth and solid financial performance, in both the short and long term.”

Second Quarter 2019 Financial Results

Revenues increased by 36.6% to RMB1,038.7 million (US$151.3 million) from RMB760.1 million for the second quarter of 2018, driven by the continuous growth in the sales of Xiaomi wearable products, an increase in brand recognition, and the overall rise of the smart wearable products market.

Cost of revenues increased by 35.2% to RMB761.4 million (US$110.9 million) from RMB563.3 million for the second quarter of 2018. The increase was in line with the sales growth of Xiaomi wearable products.

Gross profit increased by 40.8% to RMB277.3 million (US$40.4 million) from RMB196.9 million for the second quarter of 2018. Gross margin of 26.7% for the second quarter of 2019 compares with 25.9% for the second quarter of 2018.

Total operating expenses increased to RMB185.2 million (US$27.0 million) from RMB97.9 million for the second quarter of 2018.

Research and development expenses increased by 111.4% to RMB93.8 million (US$13.7 million) from RMB44.4 million for the second quarter of 2018, primarily due to an increase in personnel-related expenses, and a rise in intermediate test expenses as several new pipeline products underwent rigorous testing.

General and administrative expenses increased by 55.6% to RMB51.0 million (US$7.4 million) from RMB32.8 million for the second quarter of 2018, primarily due to an increase in personnel-related expenses, professional fees related to business expansion, and foreign exchange rate fluctuation.

Selling and marketing expenses increased by 95.2% to RMB40.4 million (US$5.9 million) from RMB20.7 million for the second quarter of 2018, primarily due to an increase in advertising and promotion expenses for self-branded products, and personnel-related expenses.

Operating income was RMB92.1 million (US$13.4 million), compared with RMB99.0 million for the second quarter of 2018.

Income before income tax was RMB101.3 million (US$14.8 million), compared with RMB101.4 million for the second quarter of 2018.

Income tax expenses were RMB12.4 million (US$1.8 million), compared with RMB15.9 million for the second quarter of 2018.

Net income attributable to Huami Corporation totaled RMB89.4 million (US$13.0 million), compared with RMB85.5 million for the second quarter of 2018.

Net income attributable to ordinary shareholders of Huami Corporation increased to RMB89.2 million (US$13.0 million), compared with RMB80.8 million for the second quarter of 2018.

Basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB1.46 (US$0.21) and RMB1.39 (US$0.20), respectively. Each ADS represents four (4) Class A ordinary shares.

Adjusted net income attributable to Huami Corporation, which excludes share-based compensation expenses, increased by 10.0% to RMB111.7 million (US$16.3 million) from RMB101.6 million for the second quarter of 2018.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB1.83 (US$0.27) and RMB1.73 (US$0.25), respectively. Each ADS represents four (4) Class A ordinary shares.

As of June 30, 2019, the Company had cash and cash equivalents of RMB1,450.1 million (US$211.2 million), compared with RMB1,441.8 million as of December 31, 2018.

First Six Months 2019 Financial Results

Revenues increased by 36.6% to RMB1,838.3 million (US$267.8 million) from RMB1,346.1 million in the first six months of 2018, due to an increase in shipment volumes of both Xiaomi and self-branded wearable products, driven by increased brand recognition of our products.

Cost of revenues increased by 34.0% to RMB1,343.6 million (US$195.7 million) from RMB1,002.5 million in the first six months of 2018. The increase was in line with accelerating sales growth of Xiaomi wearable products and self-branded products.

Gross profit increased by 44.0% to RMB494.8 million (US$72.1 million) from RMB343.6 million in the first six months of 2018. Gross margin increased to 26.9% from 25.5% in the first six months of 2018. The increase was driven by improved economies of scale and accelerating growth in sales of self-branded products.

Total operating expenses increased to RMB325.0 million (US$47.3 million) from RMB235.7 million in the first six months of 2018.

Research and development expenses increased by 40.6% to RMB166.1 million (US$24.2 million) from RMB118.2 million in the first six months of 2018, primarily due to an increase in personnel-related expenses, and a rise in intermediate test expenses as several new pipeline products were undergoing rigorous testing.

General and administrative expenses increased by 17.4% to RMB96.3 million (US$14.0 million) from RMB82.1 million in the first six months of 2018, primarily due to an increase in personnel-related expenses, professional fees for business expansion, and foreign exchange rate fluctuation.

Selling and marketing expenses increased by 76.6% to RMB62.6 million (US$9.1 million) from RMB35.4 million in the first six months of 2018, primarily due to an increase in advertising and promotional expenses for self-branded products as well as personnel-related expenses.

Operating income was RMB169.7 million (US$24.7 million), compared with RMB107.8 million in the first six months of 2018.

Income before income tax was RMB186.8 million (US$27.2 million), compared with RMB117.9 million in the first six months of 2018.

Income tax expenses were RMB23.0 million (US$3.4 million), compared with RMB18.6 million in the first six months of 2018.

Net income attributable to Huami Corporation totaled RMB164.6 million (US$24.0 million), compared with RMB100.3 million in the first six months of 2018.

Net income attributable to ordinary shareholders of Huami Corporation improved to RMB163.2 million (US$23.8 million), compared with RMB114.1 million net loss in the first six months of 2018, which included the impact of deemed dividend to preferred shareholders.

Basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB2.71 (US$0.39) and RMB2.56 (US$0.37), respectively, compared with RMB2.40 and RMB2.40 net loss, respectively, in the first six months of 2018. Each ADS represents four (4) Class A ordinary shares.

Adjusted net income attributable to Huami Corporation, which excludes share-based compensation expenses, increased by 6.5% to RMB206.7 million (US$30.1 million) from RMB194.1 million in the first six months of 2018.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB3.40 (US$0.50) and RMB3.21 (US$0.47), respectively, compared with RMB3.63 and RMB3.16, respectively, in the first six months of 2018. Each ADS represents four (4) Class A ordinary shares.

Outlook

For the third quarter of 2019, the management of the Company currently expects:

 

  •  

Net revenues to be between RMB1.64 billion and RMB1.67 billion, which would represent an increase of approximately 52.6% to 55.4% from RMB1,074.7 million for the third quarter of 2018.

The above outlook is based on the current market conditions and reflects the Company management’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

Conference Call

The Company’s management will hold a conference call at 8:00 a.m. Eastern Time on Monday, August 19, 2019 (8:00 p.m. Beijing Time on August 19, 2019) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

 

US (Toll Free):    1-888-346-8982
International:    1-412-902-4272
Mainland China (Toll Free):    400-120-1203
Hong Kong (Toll Free):    800-905-945
Hong Kong:    852-3018-4992

Participants should dial-in at least 10 minutes before the scheduled start time and ask to be connected to the call for “Huami Corporation.”

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

A telephone replay will be available two hours after the call until August 26, 2019 by dialing:

 

US Toll Free:    +1-877-344-7529
International:    +1-412-317-0088
Replay Passcode:    10134015

About Huami Corporation

Huami is a biometric and activity data-driven company with significant expertise in smart wearable technology. Since its inception in 2013, Huami has quickly established its global market leadership and recognition by shipping millions of units of smart wearable devices. In 2018, Huami shipped 27.5 million units of smart wearable devices. Huami has one of the largest biometric and activity databases in the global smart wearables industry.

Huami’s mobile apps work hand in hand with its smart wearable devices and provide users with a comprehensive view and analysis of their biometric and activity data.

Use of Non-GAAP Measures

We use adjusted net income, a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes. Adjusted net income represents net income excluding share-based compensation expenses, and such adjustment has no impact on income tax. Adjusted net income attributable to ordinary shareholders of Huami Corporation is a non-GAAP measure, which excludes share-based compensation expenses attributable to ordinary shareholders of Huami Corporation and deemed dividend for preferred shares, and is used as the numerator in computation of adjusted net income per share attributable to ordinary shareholders of Huami Corporation.

We believe that adjusted net income and adjusted net income attributable to ordinary shareholders help identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses and deemed dividend that we include in net income and net income attributable to ordinary shareholders. We believe that adjusted net income and adjusted net income attributable to ordinary shareholders provides useful information about our operating results, enhances the overall understanding of our past performance and future prospects and allows for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Adjusted net income and adjusted net income attributable to ordinary shareholders, should not be considered in isolation or construed as an alternative to net income, basic and diluted net income per share attributable to ordinary shareholders of Huami Corporation or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted net income and adjusted net income attributable to ordinary shareholders, 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 our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

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 RMB 6.8650 to US$1.00, the effective noon buying rate for June 28, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on June 28, 2019, 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. 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 cooperation with Xiaomi, the recognition of the Company’s self-branded products; the Company’s growth strategies; trends and competition in global wearable technology market; changes in the Company’s revenues and certain cost or expense accounting policies; governmental policies relating to the Company’s industry and general economic conditions in China and the global. Further information regarding these and other risks is included in the Company’s filings with the United States Securities and Exchange Commission. 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:

Huami Corporation

Grace Yujia Zhang

E-mail: ir@huami.com

The Piacente Group, Inc.

Ross Warner

Tel: +86-10-6508-0677

E-mail: huami@tpg-ir.com

In the United States:

Brandi Piacente

Tel: +1-212-481-2050

E-mail: huami@tpg-ir.com

HUAMI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

 

     As of December 31,      As of June 30,  
     2018      2019  
     RMB      RMB      US$  

Assets

         

Current assets:

         

Cash and cash equivalents

      1,441,802        1,450,125        211,235  

Restricted cash

      10,010        1,908        278  

Term deposit

      96,969        —          —    

Accounts receivable

      58,925        83,558        12,172  

Amounts due from related parties, current

      656,399        741,136        107,959  

Inventories

      484,622        541,956        78,945  

Short-term investments

      50,482        43,738        6,371  

Prepaid expenses and other current assets

      58,247        45,308        6,600  
  

 

 

     

 

 

     

 

 

  

Total current assets

      2,857,456        2,907,729        423,560  
  

 

 

     

 

 

     

 

 

  

Property, plant and equipment, net

      40,042        50,567        7,366  

Intangible asset, net

      63,722        90,066        13,120  

Goodwill

      5,930        5,930        864  

Long-term investments

      208,949        358,594        52,235  

Deferred tax assets

      75,032        94,952        13,831  

Other non-current assets

      7,350        10,051        1,464  

Non-current operating lease right-of-use assets

      —          34,162        4,976  
  

 

 

     

 

 

     

 

 

  

Total assets

      3,258,481        3,552,051        517,416  
  

 

 

     

 

 

     

 

 

  

HUAMI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

 

     As of December 31,      As of June 30,  
     2018      2019  
     RMB      RMB      US$  

Liabilities

         

Current liabilities:

         

Accounts payable

      1,064,106        1,066,395        155,338  

Advance from customers

      5,943        10,191        1,485  

Amount due to related parties, current

      10,695        12,065        1,758  

Accrued expenses and other current liabilities

      213,975        226,264        32,959  

Income tax payables

      54,037        24,801        3,613  

Notes payable

      18,936        4,770        695  

Bank borrowings

      20,000        —          —    

Current operating lease liabilities

      —          18,461        2,689  
  

 

 

     

 

 

     

 

 

  

Total current liabilities

      1,387,692        1,362,947        198,537  
  

 

 

     

 

 

     

 

 

  

Deferred tax liabilities

      4,962        4,868        709  

Other non-current liabilities

      56,249        111,856        16,295  

Non-current operating lease liabilities

      —          13,177        1,919  
  

 

 

     

 

 

     

 

 

  

Total liabilities

      1,448,903        1,492,848        217,460  
  

 

 

     

 

 

     

 

 

  

HUAMI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

 

     As of December 31,     As of June 30,  
     2018     2019  
     RMB     RMB     US$  

Equity

       

Ordinary shares

      151       154       22  

Additional paid-in capital

      1,373,577       1,464,880       213,384  

Accumulated retained earnings

      340,046       500,156       72,856  

Accumulated other comprehensive income

      97,141       96,441       14,048  
  

 

 

    

 

 

    

 

 

  

Total Huami Corporation shareholders’ equity

      1,810,915       2,061,631       300,310  
  

 

 

    

 

 

    

 

 

  

Non-controlling interests

      (1,337 )      (2,428 )      (354 ) 
  

 

 

    

 

 

    

 

 

  

Total equity

      1,809,578       2,059,203       299,956  
  

 

 

    

 

 

    

 

 

  

Total liabilities and equity

      3,258,481       3,552,051       517,416  
  

 

 

    

 

 

    

 

 

  

HUAMI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

 

     For the Three Months Ended June 30,  
     2018     2019  
     RMB     RMB     US$  

Revenues

      760,139       1,038,715       151,306  

Cost of revenues

      563,254       761,421       110,913  
  

 

 

    

 

 

    

 

 

  

Gross profit

      196,885       277,294       40,393  
  

 

 

    

 

 

    

 

 

  

Operating expenses:

       

Selling and marketing

      20,704       40,405       5,886  

General and administrative

      32,803       51,030       7,433  

Research and development

      44,355       93,751       13,656  
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      97,862       185,186       26,975  
  

 

 

    

 

 

    

 

 

  

Operating income

      99,023       92,108       13,418  
  

 

 

    

 

 

    

 

 

  

Other income and expenses:

       

Interest income

      1,981       4,803       700  

Other income

      391       4,351       634  
  

 

 

    

 

 

    

 

 

  

Income before income tax

      101,395       101,262       14,752  

Income tax expenses

      (15,874 )      (12,352 )      (1,799 ) 
  

 

 

    

 

 

    

 

 

  

Income before loss from equity method investments

      85,521       88,910       12,953  

Loss from equity method investments

      (743 )      (265 )      (39 ) 
  

 

 

    

 

 

    

 

 

  

Net income

      84,778       88,645       12,914  
  

 

 

    

 

 

    

 

 

  

Less: Net loss attributable to non-controlling interest

      (736 )      (719 )      (105 ) 
  

 

 

    

 

 

    

 

 

  

Net income attributable to Huami Corporation

      85,514       89,364       13,019  
  

 

 

    

 

 

    

 

 

  

Less: Accretion of Series A Preferred Shares

      —         —         —    

Less: Accretion of Series B-1 Preferred Shares

      —         —         —    

Less: Accretion of Series B-2 Preferred Shares

      —         —         —    

Less: Deemed Dividend for Preferred Shares

      —         —         —    

Less: Undistributed earnings allocated to participating nonvested restricted shares

      4,722       190       28  
  

 

 

    

 

 

    

 

 

  

Net income attributable to ordinary shareholders of Huami Corporation

      80,792       89,174       12,991  
  

 

 

    

 

 

    

 

 

  

Net income per share attributable to ordinary shareholders of Huami Corporation

       

Basic income per ordinary share

      0.36       0.37       0.05  

Diluted income per ordinary share

      0.34       0.35       0.05  

Net income per ADS (4 ordinary shares equal to 1 ADS)

       

ADS – basic

      1.42       1.46       0.21  

ADS – diluted

      1.35       1.39       0.20  

Weighted average number of shares used in computing net income per share

       

Ordinary share – basic

      227,464,737       243,596,530       243,596,530  

Ordinary share – diluted

      239,639,643       257,455,618       257,455,618  

HUAMI CORPORATION

Reconciliation of GAAP and Non-GAAP Results

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

 

     For the Three Months Ended June 30  
     2018      2019  
     RMB      RMB      US$  

Net income attributable to Huami Corporation

      85,514        89,364        13,019  

Share-based compensation expenses

      16,051        22,355        3,256  
  

 

 

     

 

 

     

 

 

  

Adjusted net income attributable to Huami Corporation

      101,565        111,719        16,275  
  

 

 

     

 

 

     

 

 

  
     For the Three Months Ended June 30,  
     2018      2019  
     RMB      RMB      US$  

Net income attributable to ordinary shareholders of Huami Corporation

      80,792        89,174        12,991  

Share-based compensation expenses attributable to ordinary shareholders of Huami Corporation

      15,164        22,307        3,249  
  

 

 

     

 

 

     

 

 

  

Adjusted net income attributable to ordinary shareholders of Huami Corporation2

      95,956        111,481        16,240  
  

 

 

     

 

 

     

 

 

  

Adjusted net income per share attributable to ordinary shareholders of Huami Corporation

         

Adjusted basic income per ordinary share

      0.42        0.46        0.07  

Adjusted diluted income per ordinary share

      0.40        0.43        0.06  

Adjusted net income per ADS (4 ordinary shares equal to 1 ADS)

         

ADS – basic

      1.69        1.83        0.27  

ADS – diluted

      1.61        1.73        0.25  

Weighted average number of shares used in computing net income per share

         

Ordinary share – basic

      227,464,737        243,596,530        243,596,530  

Ordinary share – diluted

      239,639,643        257,455,618        257,455,618  

Share-based compensation expenses included are follows:

         

Cost of revenues

      78        37        5  

Selling and marketing

      49        1,579        230  

General and administrative

      15,053        14,973        2,181  

Research and development

      871        5,766        840  
  

 

 

     

 

 

     

 

 

  

Total

      16,051        22,355        3,256  
  

 

 

     

 

 

     

 

 

  

HUAMI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

 

     For the Six Months Ended June 30,  
     2018     2019  
     RMB     RMB     US$  

Revenues

      1,346,059       1,838,311       267,780  

Cost of revenues

      1,002,500       1,343,554       195,711  
  

 

 

    

 

 

    

 

 

  

Gross profit

      343,559       494,757       72,069  
  

 

 

    

 

 

    

 

 

  

Operating expenses:

       

Selling and marketing

      35,444       62,588       9,117  

General and administrative

      82,073       96,322       14,031  

Research and development

      118,193       166,131       24,200  
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      235,710       325,041       47,348  
  

 

 

    

 

 

    

 

 

  

Operating income

      107,849       169,716       24,721  
  

 

 

    

 

 

    

 

 

  

Other income and expenses:

       

Interest income

      3,375       12,293       1,791  

Other income

      6,628       4,813       701  
  

 

 

    

 

 

    

 

 

  

Income before income tax

      117,852       186,822       27,213  

Income tax expenses

      (18,618 )      (23,034 )      (3,355 ) 
  

 

 

    

 

 

    

 

 

  

Income before loss from equity method investments

      99,234       163,788       23,858  

Loss from equity method investments

      (736 )      (231 )      (34 ) 
  

 

 

    

 

 

    

 

 

  

Net income

      98,498       163,557       23,824  
  

 

 

    

 

 

    

 

 

  

Less: Net loss attributable to non-controlling interest

      (1,784 )      (1,091 )      (159 ) 
  

 

 

    

 

 

    

 

 

  

Net income attributable to Huami Corporation

      100,282       164,648       23,983  
  

 

 

    

 

 

    

 

 

  

Less: Accretion of Series A Preferred Shares

      177       —         —    

Less: Accretion of Series B-1 Preferred Shares

      368       —         —    

Less: Accretion of Series B-2 Preferred Shares

      4,049       —         —    

Less: Deemed Dividend for Preferred Shares

      209,752       —         —    

Less: Undistributed earnings allocated to participating nonvested restricted shares

      —         1,425       208  
  

 

 

    

 

 

    

 

 

  

Net (loss) income attributable to ordinary shareholders of Huami Corporation

      (114,064 )      163,223       23,775  
  

 

 

    

 

 

    

 

 

  

Net income per share attributable to ordinary shareholders of Huami Corporation

       

Basic (loss) income per ordinary share

      (0.60 )      0.68       0.10  

Diluted (loss) income per ordinary share

      (0.60 )      0.64       0.09  

Net (loss) income per ADS (4 ordinary shares equal to 1 ADS)

       

ADS – basic

      (2.40 )      2.71       0.39  

ADS – diluted

      (2.40 )      2.56       0.37  

Weighted average number of shares used in computing net income per share

       

Ordinary share – basic

      190,397,570       240,817,983       240,817,983  

Ordinary share – diluted

      190,397,570       255,237,925       255,237,925  

HUAMI CORPORATION

Reconciliation of GAAP and Non-GAAP Results

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

 

     For the Six Months Ended June 30  
     2018     2019  
     RMB     RMB      US$  

Net income attributable to Huami Corporation

      100,282       164,648        23,983  

Share-based compensation expenses

      93,807       42,088        6,131  
  

 

 

    

 

 

     

 

 

  

Adjusted net income attributable to Huami Corporation

      194,089       206,736        30,114  
  

 

 

    

 

 

     

 

 

  
     For the Six Months Ended June 30,  
     2018     2019  
     RMB     RMB      US$  

Net (loss) income attributable to ordinary shareholders of Huami Corporation

      (114,064 )      163,223        23,775  

Share-based compensation expenses attributable to ordinary shareholders of Huami Corporation

      76,973       41,724        6,078  

Deemed Dividend for Preferred shares

      209,752       —          —    
  

 

 

    

 

 

     

 

 

  

Adjusted net income attributable to ordinary shareholders of Huami Corporation2

      172,661       204,947        29,853  
  

 

 

    

 

 

     

 

 

  

Adjusted net income per share attributable to ordinary shareholders of Huami Corporation

        

Adjusted basic income per ordinary share

      0.91       0.85        0.12  

Adjusted diluted income per ordinary share

      0.79       0.80        0.12  

Adjusted net income per ADS (4 ordinary shares equal to 1 ADS)

        

ADS – basic

      3.63       3.40        0.50  

ADS – diluted

      3.16       3.21        0.47  

Weighted average number of shares used in computing net income per share

        

Ordinary share – basic

      190,397,570       240,817,983        240,817,983  

Ordinary share – diluted

      202,203,360       255,237,925        255,237,925  

Share-based compensation expenses included are follows:

        

Cost of revenues

      410       39        6  

Selling and marketing

      4,111       1,910        278  

General and administrative

      52,063       32,409        4,721  

Research and development

      37,223       7,730        1,126  
  

 

 

    

 

 

     

 

 

  

Total

      93,807       42,088        6,131