UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of June 2019

Commission File Number: 001-38369

 

 

Huami Corporation

 

 

Building H8, No. 2800, Chuangxin Road

Hefei, 230088

People’s Republic of China

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


Exhibit Index

 

Exhibit 99.1    Press Release


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Huami Corporation
By   :  

/s/ David Cui

Name   :   David Cui
Title   :   Chief Financial Officer

Date: June 4, 2019

EX-99.1

Exhibit 99.1

Huami Corporation Reports First Quarter 2019 Unaudited Financial Results

Quarterly Revenues up 36.5% Year-over-Year to RMB799.6 Million, Exceeding Guidance Range

BEIJING, June 3, 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 first quarter ended March 31, 2019.

First Quarter 2019 Financial and Operating Highlights

 

   

Revenues reached RMB799.6 million (US$119.1 million), representing an increase of 36.5% from the first quarter of 2018.

 

   

Gross margin was 27.2%, compared with 25.0% for the first quarter of 2018.

 

   

Net income attributable to Huami Corporation was RMB75.3 million (US$11.2 million), compared with RMB14.8 million for the first quarter of 2018.

 

   

Basic and diluted net income per American depositary share (“ADS”) attributable to ordinary shareholders of Huami Corporation was RMB1.25 (US$0.19) and RMB1.18 (US$0.18), respectively. Each ADS represents four (4) Class A ordinary shares.

 

   

Adjusted net income attributable to Huami Corporation1 was RMB95.0 million (US$14.2 million).

 

   

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation2 was RMB1.57 (US$0.23) and RMB1.49 (US$0.22), respectively. Each ADS represents four (4) Class A ordinary shares.

 

   

Total units shipped reached 5.6 million, compared with 4.8 million in the first 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.


“Strong revenue growth momentum continued in the first quarter, reflecting the effective leveraging of our rising global brand recognition, strategic relationships and consumer trust,” said Wang Huang, Chairman and CEO “In the first quarter, with enhancements to and the expansion of, our overseas sales channels and strategies, international version product shipments continued climbing. In particular, our smart watches, in the first quarter, ranked number five globally. We are happy to see that self-branded products and others showed robust growth, with a 62.0% increase in revenue compared with the first quarter of 2018, and contributed 41.3% of total revenues in the first quarter of 2019.”

“Our well-established strategic partnerships remain strong and stable. We will launch Mi-Band 4 very soon and continue to work with Xiaomi on future Mi Bands product development, including various band models targeting different global market segments. In the meantime, our team is diligently working closely with Timex Group to develop products as well as plan a global marketing strategy. Furthermore, our Amazfit products are riding the wave of the rapidly rising global smart watch market. In the next few months, we will launch multiple models of Amazfit watches covering different market demands and price ranges.” Wang Huang continued, “We have also broadened our IoT life scenario capabilities, with Amazfit products now upgraded with full Amazon Alexa integration. In addition, all NFC version Huami products are now capable of accessing over 200 cities’ public transportation networks in China. With all of our achievements in the first quarter, we are excited to continue developing and introducing new products and services, expanding our presence in global markets and further developing our strategic partnership initiatives.”

David Cui, Chief Financial Officer, said, “Strong revenue growth continued in the first quarter, increasing 36.5% year-over-year, as the Company benefited from global market expansion and growing consumer recognition of our products. We continued the diversification of our product line, specifically with our self-branded products. Our self-branded products and others grew to 41.3% of total revenues. We shipped 5.6 million units in the quarter, up 17.9% from the first quarter of 2018, driven in large part by stronger international demand. Looking at how the year has started and then looking ahead, we feel confident that we are well-positioned to continue delivering on sustainable growth, through innovative new products and services, creative alliances, global expansion and operational efficiencies.”


First Quarter 2019 Financial Results

Revenues increased by 36.5% to RMB799.6 million (US$119.1 million) from RMB585.9 million for the first quarter of 2018, due to an increase in the sales of Xiaomi wearable products and self-branded Amazfit products, both driven by increased brand recognition and the overall rise of the smartwatch market.

Cost of revenues increased by 32.5% to RMB582.1 million (US$86.7 million) from RMB439.2 million for the first quarter of 2018. The increase was in line with the rapid sales growth of both Xiaomi wearable products and self-branded Amazfit products.

Gross profit increased by 48.3% to RMB217.5 million (US$32.4 million) from RMB146.7 million for the first quarter of 2018. Gross margin of 27.2% in the first quarter compares with 25.0% in the first quarter 2018.

Total operating expenses increased by 1.5% to RMB139.9 million (US$20.8 million) from RMB137.8 million for the first quarter of 2018.

Research and development expenses decreased by 2.0% to RMB72.4 million (US$10.8 million) from RMB73.8 million for the first quarter of 2018, primarily due to a decrease in share-based compensation (SBC) expenses, which were offset by an increase in personnel-related expenses.

General and administrative expenses decreased by 8.1% to RMB45.3 million (US$6.7 million) from RMB49.3 million for the first quarter of 2018, primarily due to a decrease in SBC expenses, which were offset by an increase in personnel-related expenses.

Selling and marketing expenses increased by 50.5% to RMB22.2 million (US$3.3 million) from RMB14.7 million for the first quarter of 2018, primarily due to an increase in personnel-related expenses and an increase in advertising and promotional expenses, specifically for self-branded products.


Operating income was RMB77.6 million (US$11.6 million), compared with RMB8.8 million for the first quarter of 2018.

Income before income tax was RMB85.6 million (US$12.7 million), compared with RMB16.5 million for the first quarter of 2018.

Income tax expenses were RMB10.7 million (US$1.6 million), compared with RMB2.7 million for the first quarter of 2018.

Net income attributable to Huami Corporation totaled RMB75.3 million (US$11.2 million), compared with RMB14.8 million for the first quarter of 2018.

Net income attributable to ordinary shareholders of Huami Corporation increased to RMB74.1 million (US$11.0 million), compared with net loss attributable to ordinary shareholders of Huami Corporation of RMB199.6 million for the first quarter of 2018.

Basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB1.25 (US$0.19) and RMB1.18 (US$0.18), 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 2.7% to RMB95.0 million (US$14.2 million) from RMB92.5 million for the first quarter of 2018.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB1.57 (US$0.23) and RMB1.49 (US$0.22), respectively. Each ADS represents four (4) Class A ordinary shares.

As of March 31, 2019, the Company had cash and cash equivalents of RMB1,572.4 million (US$234.3 million), compared with RMB1,441.8 million as of December 31, 2018.


Outlook

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

 

   

Net revenues to be between RMB990.0 million and RMB1,010.0 million, which would represent an increase of approximately 30.2% to 32.9% from RMB760.1 million for the second 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, June 3, 2019 (8:00 p.m. Beijing Time on June 3, 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 June 10, 2019 by dialing:

 

US Toll Free:    +1-877-344-7529
International:    +1-412-317-0088
Replay Passcode:    10131883

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 6.7112 to US$1.00, the effective noon buying rate for March 29, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on March 29, 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 March 31,  
     2018      2019  
     RMB      RMB      US$  

Assets

        

Current assets:

        

Cash and cash equivalents

     1,441,802        1,572,377        234,291  

Restricted cash

     10,010        6,074        905  

Term deposit

     96,969        —          —    

Accounts receivable

     58,925        51,163        7,624  

Amounts due from related parties, current

     656,399        322,353        48,032  

Inventories

     484,622        372,569        55,515  

Short-term investments

     50,482        51,077        7,611  

Prepaid expenses and other current assets

     58,247        43,776        6,522  
  

 

 

    

 

 

    

 

 

 

Total current assets

     2,857,456        2,419,389        360,500  
  

 

 

    

 

 

    

 

 

 

Property, plant and equipment, net

     40,042        46,285        6,897  

Intangible asset, net

     63,722        62,171        9,264  

Goodwill

     5,930        5,930        884  

Long-term investments

     208,949        233,007        34,719  

Deferred tax assets

     75,032        94,292        14,050  

Other non-current assets

     7,350        5,155        768  

Noncurrent operating lease right-of-use assets3

     —          19,336        2,881  
  

 

 

    

 

 

    

 

 

 

Total assets

     3,258,481        2,885,565        429,963  
  

 

 

    

 

 

    

 

 

 


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 March 31,  
     2018      2019  
     RMB      RMB      US$  

Liabilities

        

Current liabilities:

        

Accounts payable

     1,064,106        583,774        86,985  

Advance from customers

     5,943        3,151        470  

Amount due to related parties, current

     10,695        10,763        1,604  

Accrued expenses and other current liabilities

     213,975        214,390        31,946  

Income tax payables

     54,037        82,721        12,326  

Notes payable

     18,936        6,074        905  

Bank borrowings

     20,000        20,000        2,980  

Current operating lease liabilities3

     —          11,575        1,725  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     1,387,692        932,448        138,941  
  

 

 

    

 

 

    

 

 

 

Deferred tax liabilities

     4,962        4,938        736  

Other non-current liabilities

     56,249        56,249        8,381  

Noncurrent operating lease liabilities3

     —          5,761        858  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     1,448,903        999,396        148,916  
  

 

 

    

 

 

    

 

 

 

 

 

3 

The Company has adopted Accounting Standards Update No. 2016-02, Leases, beginning January 1, 2019 on a modified retrospective basis. As a result, the Company recognized approximately RMB19 million of right-of-use assets, approximately RMB12 million current lease liabilities and RMB6 million noncurrent lease liabilities on the consolidated balance sheet as of March 31, 2019. The Company elected not to recognize lease assets and liabilities for leases with a term of 12 months or less. The adoption did not have a material impact on the Company’s consolidated statements of operations for the quarter ended March 31, 2019 or the opening balances of retained earnings as of January 1, 2019.


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 March 31,  
     2018     2019  
     RMB     RMB     US$  

Equity

      

Ordinary shares

     151       151       22  

Additional paid-in capital

     1,373,577       1,393,310       207,610  

Accumulated retained earnings

     340,046       415,330       61,886  

Accumulated other comprehensive income

     97,141       79,087       11,784  
  

 

 

   

 

 

   

 

 

 

Total Huami Corporation shareholders’ equity

     1,810,915       1,887,878       281,302  
  

 

 

   

 

 

   

 

 

 

Non-controlling interests

     (1,337     (1,709     (255
  

 

 

   

 

 

   

 

 

 

Total equity

     1,809,578       1,886,169       281,047  
  

 

 

   

 

 

   

 

 

 

Total liabilities, mezzanine equity and equity

     3,258,481       2,885,565       429,963  
  

 

 

   

 

 

   

 

 

 


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 March 31,  
     2018     2019  
     RMB     RMB     US$  

Revenues

     585,920       799,596       119,144  

Cost of revenues

     439,246       582,133       86,741  
  

 

 

   

 

 

   

 

 

 

Gross profit

     146,674       217,463       32,403  
  

 

 

   

 

 

   

 

 

 

Operating expenses:

      

Selling and marketing

     14,740       22,183       3,305  

General and administrative

     49,270       45,292       6,749  

Research and development

     73,838       72,380       10,785  
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     137,848       139,855       20,839  
  

 

 

   

 

 

   

 

 

 

Operating income

     8,826       77,608       11,564  
  

 

 

   

 

 

   

 

 

 

Other income and expenses:

      

Interest income

     1,394       7,490       1,116  

Other income

     6,237       462       69  
  

 

 

   

 

 

   

 

 

 

Income before income tax

     16,457       85,560       12,749  

Income tax expenses

     (2,744     (10,682     (1,592
  

 

 

   

 

 

   

 

 

 

Income before income from equity method investments

     13,713       74,878       11,157  

Income from equity method investments

     7       34       5  
  

 

 

   

 

 

   

 

 

 

Net income

     13,720       74,912       11,162  
  

 

 

   

 

 

   

 

 

 

Less: Net loss attributable to non-controlling interest

     (1,048     (372     (55
  

 

 

   

 

 

   

 

 

 

Net income attributable to Huami Corporation

     14,768       75,284       11,217  
  

 

 

   

 

 

   

 

 

 

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

     —         1,153       172  
  

 

 

   

 

 

   

 

 

 

Net income attributable to ordinary shareholders of Huami Corporation

     (199,578     74,131       11,045  
  

 

 

   

 

 

   

 

 

 

Net income per share attributable to ordinary
shareholders of Huami Corporation

      

Basic (loss) income per ordinary share

     (1.31     0.31       0.05  

Diluted (loss) income per ordinary share

     (1.31     0.29       0.04  

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

      

ADS – basic

     (5.22     1.25       0.19  

ADS – diluted

     (5.22     1.18       0.18  

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

      

Ordinary share – basic

     152,893,007       238,007,944       238,007,944  

Ordinary share – diluted

     152,893,007       252,131,378       252,131,378  


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 March 31,  
     2018     2019  
     RMB     RMB      US$  

Net income attributable to Huami Corporation

     14,768       75,284        11,217  

Share-based compensation expenses

     77,756       19,733        2,940  
  

 

 

   

 

 

    

 

 

 

Adjusted net income attributable to Huami Corporation

     92,524       95,017        14,157  
  

 

 

   

 

 

    

 

 

 
     For the Three Months Ended March 31,  
     2018     2019  
     RMB     RMB      US$  

Net income attributable to ordinary shareholders of Huami Corporation

     (199,578     74,131        11,045  

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

     62,341       19,431        2,895  

Deemed Dividend for Preferred shares

     209,752       —          —    
  

 

 

   

 

 

    

 

 

 

Adjusted net income attributable to ordinary shareholders of Huami Corporation4

     72,515       93,562        13,940  
  

 

 

   

 

 

    

 

 

 

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

       

Adjusted basic income per ordinary share

     0.47       0.39        0.06  

Adjusted diluted income per ordinary share

     0.39       0.37        0.06  

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

       

ADS – basic

     1.90       1.57        0.23  

ADS – diluted

     1.57       1.49        0.22  

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

       

Ordinary share – basic

     152,893,007       238,007,944        238,007,944  

Ordinary share – diluted

     162,243,568       252,131,378        252,131,378  

Share-based compensation expenses included are follows:

       

Cost of revenues

     332       2        —    

Selling and marketing

     4,062       331        49  

General and administrative

     37,010       17,436        2,598  

Research and development

     36,352       1,964        293  
  

 

 

   

 

 

    

 

 

 

Total

     77,756       19,733        2,940  
  

 

 

   

 

 

    

 

 

 

 

 

4 

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.