Tuniu Announces Unaudited Second Quarter 2022 Financial Results

Author: Tuniu Corporation / 2023-07-24 00:48 / Source: Tuniu Corporation

Tuniu Announces Unaudited Second Quarter 2022 Financial Results

NANJING,China,Sept. 1,2022 -- Tuniu Corporation (NASDAQ:TOUR) ("Tuniu" or the "Company"),a leading online leisure travel company in China,today announced its unaudited financial results for the second quarter ended June 30,2022.

"In the second quarter,despite the impact on the tourism industry by the most severe resurgence of COVID-19 since the initial outbreak,enthusiasm for travel among the public remained high due to better outbreak control while the industry showed signs of recovery," said Mr. Donald Dunde Yu,Tuniu's founder,Chairman and Chief Executive Officer. "During the quarter,Tuniu continued to focus on providing high-quality products and services as we explore new product areas while consolidating the strengths and market leadership of our packaged tours. We have steadfastly adhered to our 'customer first' principle,focusing on satisfying customer demands and providing the best possible travel experience. Operationally,we continued to optimize our internal management and implement control measures to further lower costs and improve efficiency. We remain confident in the tourism industry's strengths and potential for long-term development and we will keep moving forward despite the challenges we may face on the road to recovery."

Second Quarter 2022 Results

Net revenues were RMB37.0 million (US$5.5 million[1]) in the second quarter of 2022,representing a year-over-year decrease of 77.0% from the corresponding period in 2021. The decrease was primarily due to the negative impact brought by the resurgence and spread of COVID-19.

Revenues from packaged tourswere RMB9.5 million (US$1.4 million) in the second quarter of 2022,representing a year-over-year decrease of 92.5% from the corresponding period in 2021. The decrease was primarily due to the resurgence of COVID-19 in certain regions in China.

Other revenues were RMB27.4 million (US$4.1 million) in the second quarter of 2022,representing a year-over-year decrease of 20.4% from the corresponding period in 2021. The decrease was primarily due to the decrease in the fees for advertising services provided to tourism boards and bureaus and commission fees received from other travel-related products.

Cost of revenues was RMB20.4 million (US$3.1 million) in the second quarter of 2022,representing a year-over-year decrease of 77.8% from the corresponding period in 2021. As a percentage of net revenues,cost of revenues was 55.3% in the second quarter of 2022,compared to 57.1% in the corresponding period in 2021.

[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB 6.6981 on June 30,2022 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/default.htm.

Gross margin was 44.7% in the second quarter of 2022,compared to a gross margin of 42.9% in the second quarter of 2021.

Operating expenses were RMB139.4 million (US$20.8 million) in the second quarter of 2022,representing a year-over-year increase of 46.5% from the corresponding period in 2021. Share-based compensation expenses,amortization of acquired intangible assets, gain on disposals of subsidiaries and impairment of goodwill,which were allocated to operating expenses,were RMB83.6 million (US$12.5 million) in the second quarter of 2022. Among it,gain on disposals of subsidiaries,which was recorded in other operating income,was RMB32.8 million (US$4.9 million). Impairment of goodwill,which was recorded due to the severer adverse impact of COVID-19 on the Company's business in this quarter with potential continuous impact in subsequent periods,was RMB112.1 million (US$16.7 million). Non-GAAP[2]operating expenses,which excluded share-based compensation expenses,gain on disposals of subsidiaries and impairment of goodwill were RMB55.7 million (US$8.3 million) in the second quarter of 2022,representing a year-over-year decrease of 37.8%.

[2] The section below entitled "About Non-GAAP Financial Measures" provides information about the use of Non-GAAP financial measures in this press release,and the table captioned "Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this press release reconciles Non-GAAP financial information with the Company's financial results under GAAP.

Research and product development expenses were RMB14.0 million (US$2.1 million) in the second quarter of 2022,representing a year-over-year increase of 1.5%. Non-GAAP research and product development expenses,which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB0.8 million (US$0.1 million),were RMB13.1 million (US$2.0million) in the second quarter of 2022,representing a year-over-year increase of 1.8% from the corresponding period in 2021. The increase was primarily due to the increase in research and product development personnel related expenses.

Sales and marketing expenses were RMB24.5 million (US$3.7 million) in the second quarter of 2022,representing a year-over-year decrease of 45.4%. Non-GAAP sales and marketing expenses,which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB1.2 million (US$0.2 million),were RMB23.3 million (US$3.5 million) in the second quarter of 2022,representing a year-over-year decrease of 46.7% from the corresponding period in 2021. The decrease was primarily due to the decrease in promotion expenses and sales and marketing personnel related expenses.

General and administrative expenseswere RMB23.9million (US$3.6 million) in the second quarter of 2022,representing a year-over-year decrease of 42.5%. Non-GAAP general and administrative expenses,which excluded share-based compensation expenses and amortization of acquired intangible assetsof RMB2.3 million (US$0.3 million),were RMB21.6 million (US$3.2 million) in the second quarter of 2022,representing a year-over-year decrease of 43.0% from the corresponding period in 2021. The decrease was primarily due to the decrease in general and administrative personnel related expenses and the reversal of allowance for doubtful accounts.

Loss from operationswas RMB122.9 million (US$18.3 million) in the second quarter of 2022,compared to a loss from operations of RMB26.2 million in the second quarter of 2021. Non-GAAP loss from operations,gain on disposals of subsidiaries and impairment of goodwill,was RMB38.9 million (US$5.8 million) in the second quarter of 2022.

Net loss was RMB128.5 million (US$19.2 million) in the second quarter of 2022,compared to a net loss of RMB14.0 million in the second quarter of 2021. Non-GAAP net loss,was RMB44.6 million (US$6.7 million) in the second quarter of 2022.

Net loss attributable to ordinary shareholderswas RMB126.5 million (US$18.9 million) in the second quarter of 2022,compared to a net loss attributable to ordinary shareholders of RMB13.1 million in the second quarter of 2021. Non-GAAP net loss attributable to ordinary shareholders,was RMB42.6 million (US$6.4 million) in the second quarter of 2022.

As of June 30,2022,the Company had cash and cash equivalents,restricted cash and short-term investments of RMB1.0 billion (US$151.9 million). The COVID-19 pandemic has negatively impacted our business operations,and will continue to impact our results of operations and cash flows for subsequent periods. Based on our liquidity assessment and management actions,we believe that our available cash,cash equivalents and maturity of investments will be sufficient to meet our working capital requirements and capital expenditures in the ordinary course of business for the next twelve months.

Business Outlook

For the third quarter of 2022,the Company expects to generate RMB74.5 million to RMB80.2 million of net revenues,which represents a 30% to 35% decrease year-over-year. This forecast reflects Tuniu's current and preliminary view on the industry and its operations,which is subject to change.

Conference Call Information

Tuniu's management will hold an earnings conference call at 8:00 am U.S. Eastern Time,on September 1,(8:00 pm,Beijing/Hong Kong Time,2022) to discuss the second quarter 2022 financial results.

To participate in the conference call,please dial the following numbers:

U.S.:

+1-888-346-8982

Hong Kong:

+852-301-84992

Mainland China:

4001-201203

International:

+1-412-902-4272

Conference ID: Tuniu 2Q 2022 Earnings Call

A telephone replay will be available one hour after the end of the conference call through September 8,2022. The dial-in details are as follows:

U.S.:

+1-877-344-7529

International:

+1-412-317-0088

Replay Access Code: 6348916

Additionally,a live and archived webcast of the conference call will also be available on the Company's investor relations website at http://ir.tuniu.com.

AboutTuniu

Tuniu (Nasdaq:TOUR) is a leading online leisure travel company in China that offers a large selection of packaged tours,including organized and self-guided tours,as well as travel-related services for leisure travelers through its website tuniu.com and mobile platform. Tuniu coversover 420 departing cities throughout China and all popular destinations worldwide. Tuniu provides one-stop leisure travel solutions and a compelling customer experience through its online platform and offline service network,including a dedicated team of professional customer service representatives,24/7 call centers,extensive networks of offline retail stores and self-operated local tour operators. For more information,please visit http://ir.tuniu.com.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934,as amended,and 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. Tuniu may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission,in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Any statements that are not historical facts,including statements about Tuniu's beliefs and expectations,are forward-looking statements that involve factors,risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include,but are not limited to the following: Tuniu's goals and strategies; the growth of the online leisure travel market in China; the demand for Tuniu's products and services; its relationships with customers and travel suppliers; the Company's ability to offer competitive travel products and services; Tuniu's future business development,results of operations and financial condition; competition in the online travel industry in China; relevant government policies and regulations relating to the Company's structure,business and industry; the impact of the COVID-19 on Tuniu's business operations,the travel industry and the economy of China and elsewhere generally; and the general economic and business condition in China and elsewhere. Further information regarding these and other risks,uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release,and Tuniu does not undertake any obligation to update such information,except as required under applicable law.

About Non-GAAP Financial Measures

To supplement the Company's unaudited consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"),the Company has provided non-GAAP information related to cost of revenues,research and product development expenses,sales and marketing expenses,general and administrative expenses,impairment of goodwill,other operating income,total operating expenses,loss from operations,net loss,net loss attributable to ordinary shareholders,net loss per ordinary share attributable to ordinary shareholders-basic and diluted and net loss per ADS-basic and diluted,which excludes share-based compensation expenses,gain on disposals of subsidiaries and impairment of goodwill. We believe that the non-GAAP financial measures used in this press release are useful for understanding and assessing underlying business performance and operating trends,and management and investors benefit from referring to these non-GAAP financial measures in assessing our financial performance and when planning and forecasting future periods. For more information on these non-GAAP financial measures,please see the table captioned "Reconciliations of GAAP and non-GAAP Results" set forth at the end of this press release.

A limitation of using non-GAAP financial measures excluding share-based compensation expenses,gain on disposals of subsidiaries and impairment of goodwill is that share-based compensation expenses and amortization of acquired intangible assets have been – and will continue to be – significant recurring expenses in the Company's business. You should not view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP,or as being comparable to results reported or forecasted by other companies.

Tuniu Corporation

Unaudited Condensed Consolidated Balance Sheets

(All amounts in thousands,except per share information)

December 31,2021

June 30,2022

RMB

US$

ASSETS

Current assets

Cash and cash equivalents

349,077

297,381

44,398

Restricted cash

46,521

33,279

4,968

Short-term investments

615,901

686,452

102,485

Accounts receivable,net

111,941

105,790

15,794

Amounts due from related parties

14,969

14,490

2,163

Prepayments and other current assets

337,033

283,813

42,372

Total current assets

1,475,442

1,421,205

212,180

Non-current assets

Long-term investments

201,947

226,495

33,815

Property and equipment,net

98,159

90,589

13,525

Intangible assets,net

55,376

44,545

6,650

Land use right,net

94,652

93,621

13,977

Operating lease right-of-use assets,net

48,115

35,757

5,338

Goodwill

232,007

117,470

17,538

Other non-current assets

92,111

87,975

13,134

Total non-current assets

822,367

696,452

103,977

Total assets

2,297,809

2,117,657

316,157

LIABILITIES,REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

Current liabilities

Short-term borrowings

9,981

8,600

1,284

Accounts and notes payable

383,626

386,560

57,712

Amounts due to related parties

4,679

3,773

563

Salary and welfare payable

33,761

34,665

5,175

Taxes payable

8,004

3,669

548

Advances from customers

139,777

128,589

19,198

Operating lease liabilities,current

16,556

14,745

2,201

Accrued expenses and other current liabilities

382,629

393,940

58,813

Total current liabilities

979,013

974,541

145,494

Non-current liabilities

Operating lease liabilities,non-current

38,832

30,141

4,500

Deferred tax liabilities

12,479

10,020

1,496

Long-term borrowings

14,344

10,059

1,502

Total non-current liabilities

65,655

50,220

7,498

Total liabilities

1,044,668

1,024,761

152,992

Redeemable noncontrolling interests

27,200

4,061

Equity

Ordinary shares

249

Less: Treasury stock

(293,795)

(292,028)

(43,599)

Additional paid-in capital

9,125,748

9,127,634

1,362,720

Accumulated other comprehensive income

271,821

288,968

43,142

Accumulated deficit

(7,834,879)

(8,001,831)

(1,194,642)

Total Tuniu Corporation shareholders' equity

1,269,144

1,122,992

167,658

Noncontrolling interests

(43,203)

(57,296)

(8,554)

Total equity

1,225,941

1,065,696

159,104

Total liabilities,redeemable noncontrolling interests and equity

2,157

Tuniu Corporation

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(All amounts in thousands,except per share information)

QuarterEnded

June 30,2021

March 31,2022

RMB

US$

Revenues

Packaged tours

126,502

14,375

9,531

1,423

Others

34,459

27,104

27,426

4,095

Net revenues

160,961

41,479

36,957

5,518

Cost of revenues

(91,975)

(25,666)

(20,440)

(3,052)

Gross profit

68,986

15,813

16,517

2,466

Operating expenses

Research and product development

(13,757)

(16,185)

(13,963)

(2,085)

Sales and marketing

(44,795)

(29,783)

(24,474)

(3,654)

General and administrative

(41,541)

(27,658)

(23,888)

(3,566)

Impairment of goodwill

(112,102)

(16,736)

Other operating income

4,950

5,000

35,059

5,234

Total operating expenses

(95,143)

(68,626)

(139,368)

(20,807)

Loss from operations

(26,157)

(52,813)

(122,851)

(18,341)

Other (expenses)/income

Interest and investment income

9,095

11,524

5,206

777

Interest expense

(1,944)

(1,950)

(582)

(87)

Foreign exchange gains/(losses),net

4,289

129

(11,424)

(1,706)

Other income,net

664

659

302

Loss before income tax expense

(14,053)

(42,451)

(129,349)

(19,312)

Income tax benefit

134

553

Equity in (loss)/income of affiliates

(95)

242

790

118

Net loss

(14,014)

(41,656)

(128,538)

(19,191)

Net loss attributable to noncontrolling interests

(949)

(1,223)

(2,019)

(301)

Net loss attributable to Tuniu Corporation

(13,065)

(40,433)

(126,519)

(18,890)

Net loss attributable to ordinary shareholders

(13,890)

Net loss

(14,191)

Other comprehensive (loss)/income:

Foreign currency translation adjustment,net of nil tax

(4,389)

(130)

17,277

2,579

Comprehensive loss

(18,403)

(41,786)

(111,261)

(16,612)

Net loss per ordinary share attributable to ordinary shareholders -

basic and diluted

(0.04)

(0.11)

(0.34)

(0.05)

Net loss per ADS - basic and diluted*

(0.12)

(0.33)

(1.02)

(0.15)

Weighted average number of ordinary shares used in computing

basic and diluted loss per share

370,929,055

371,079,992

371,112,997

371,997

Share-based compensation expenses included are as follows：

Cost of revenues

291

Research and product development

243

299

Sales and marketing

121

448

General and administrative

2,928

534

1,639

245

Total

3,109

975

2,677

400

*Each ADS represents three of the Company's ordinary shares.

Reconciliations of GAAP and Non-GAAP Results

(All amounts in thousands,except per share information)

Quarter Ended June 30,2022

GAAP Result

Share-based

Amortization of acquired

Gain on disposals

Impairment

Non-GAAP

Compensation

intangible assets

of subsidiaries

of goodwill

Result

Cost of revenues

(20,440)

291

(20,149)

Research and product development

(13,963)

299

534

(13,130)

Sales and marketing

(24,474)

448

770

(23,256)

General and administrative

(23,888)

1,639

635

(21,614)

Impairment of goodwill

(112,102)

112,102

Other operating income

35,059

(32,786)

2,273

Total operating expenses

(139,368)

2,386

1,939

(32,786)

112,102

(55,727)

Loss from operations

(122,851)

2,677

1,102

(38,919)

Net loss

(128,538)

2,102

(44,606)

Net loss attributable to ordinary shareholders

(126,519)

2,102

(42,587)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted

(0.34)

(0.11)

Net loss per ADS - basic and diluted

(1.02)

(0.33)

Weighted average number of ordinary shares used in

computing basic and diluted loss per share

371,997

Quarter Ended March 31,2022

GAAP Result

Share-based

Amortization of acquired

Gain on disposals

Impairment

Non-GAAP

Compensation

intangible assets

of subsidiaries

of goodwill

Result

Cost of revenues

(25,666)

(25,589)

Research and product development

(16,185)

243

534

(15,408)

Sales and marketing

(29,783)

121

1,065

(28,597)

General and administrative

(27,658)

534

637

(26,487)

Other operating income

5,000

Total operating expenses

(68,626)

898

2,236

(65,492)

Loss from operations

(52,813)

975

2,236

(49,602)

Net loss

(41,656)

975

2,236

(38,445)

Net loss attributable to ordinary shareholders

(40,433)

975

2,236

(37,222)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted

(0.11)

(0.10)

Net loss per ADS - basic and diluted

(0.33)

(0.30)

Weighted average number of ordinary shares used in

computing basic and diluted loss per share

371,992

Quarter Ended June 30,2021

GAAP Result

Share-based

Amortization of acquired

Gain on disposals

Impairment

Non-GAAP

Compensation

intangible assets

of subsidiaries

of goodwill

Result

Cost of revenues

(91,975)

(91,931)

Research and product development

(13,757)

782

(12,899)

Sales and marketing

(44,795)

1,065

(43,669)

General and administrative

(41,541)

2,928

681

(37,932)

Other operating income

4,950

Total operating expenses

(95,143)

3,065

2,528

(89,550)

Loss from operations

(26,157)

3,109

2,528

(20,520)

Net loss

(14,014)

3,528

(8,377)

Net loss attributable to ordinary shareholders

(13,065)

3,528

(7,428)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted

(0.04)

(0.02)

Net loss per ADS - basic and diluted

(0.12)

(0.06)

Weighted average number of ordinary shares used in

computing basic and diluted loss per share

370,055

*Basic net loss per ordinary share attributable to ordinary shareholders is calculated by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary

shares outstanding during the periods. Diluted net loss per ordinary share attributable to ordinary shareholders is calculated by dividing net loss attributable to ordinary shareholders by the

weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the periods,including the dilutive effect of share-based awards as determined under

the treasury stock method.