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 November 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.

 

Date: November 13, 2019

Exhibit 99.1

Huami Corporation Reports Third Quarter 2019 Unaudited Financial Results

Quarterly Revenues up 73.3% YoY to RMB1,862.5 Million, and Shipments up 67.1% YoY

BEIJING, Nov. 12, 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 third quarter ended September 30, 2019.

Third Quarter 2019 Financial and Operating Highlights

 

•

Revenues reached RMB1,862.5 million (US$260.6 million), representing an increase of 73.3% from the third quarter of 2018.

 

•

Gross margin was 25.2%, compared with 26.7% for the third quarter of 2018.

 

•

Net income attributable to Huami Corporation was RMB203.3 million (US$28.4 million), compared with RMB113.8 million for the third quarter of 2018.

 

•

Basic and diluted net income per American depositary share (“ADS”) attributable to ordinary shareholders of Huami Corporation was RMB3.31 (US$0.46) and RMB3.15 (US$0.44), respectively. Each ADS represents four (4) Class A ordinary shares.

 

•

Adjusted net income attributable to Huami Corporation1 was RMB209.8 million (US$29.4 million).

 

•

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation2 was RMB3.41 (US$0.48) and RMB3.25 (US$0.45), respectively. Each ADS represents four (4) Class A ordinary shares.

 

•

Total units shipped reached 13.7 million, compared with 8.2 million in the third quarter of 2018.

First Nine Months 2019 Financial and Operating Highlights

 

•

Revenues reached RMB3,700.8 million (US$517.8 million), representing an increase of 52.9% from the first nine months of 2018.

 

•

Gross margin reached 26.1%, increasing from 26.0% in the first nine months of 2018.

 

•

Net income attributable to Huami Corporation was RMB368.0 million (US$51.5 million), compared with RMB214.1 million in the first nine months 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.

•

Basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB6.03 (US$0.84) and RMB5.73 (US$0.80), respectively. Each ADS represents four (4) Class A ordinary shares.

 

•

Adjusted net income attributable to Huami Corporation was RMB416.6 million (US$58.3 million), compared with RMB328.3 million in the first nine months of 2018.

 

•

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation2 was RMB6.83 (US$0.96) and RMB6.49 (US$0.91), respectively, compared with RMB5.92 and RMB5.30, respectively, in the first nine months of 2018. Each ADS represents four (4) Class A ordinary shares.

 

•

Total units shipped reached 27.6 million, compared with 18.3 million in the first nine months of 2018.

“Our persistent execution of strategic initiatives focused on product diversification, brand elevation, and international expansion, continues to pay off, driving outstanding top-line and bottom-line growth in the third quarter,” said Wang Huang, Chairman and CEO. “Our revenue performance was primarily the result of the strong sales of both the Mi-Band 4 and our newly released Amazfit products, as both brand categories become increasingly recognized by consumers. Our international shipments keep on climbing, underpinned by our first international product launch event in Berlin, Germany and numerous global product design awards we received. We view the overseas marketing campaign as an essential strategy for our growth with additional global product launches being planned for future dates.

“In the third quarter, we leveraged our expertise in smart wearable hardware and big data analytics to further optimize algorithms for our cloud-based healthcare services. The accuracy and effectiveness of our healthcare service offering has been testified by top physicians in China. A recent research published at the 2019 Asia Pacific Heart Rhythm Society by Peking University First Hospital, showed that Huami smart wearables manage to detect atrial fibrillation at an accuracy rate of approximately 94%, similar to the accuracy of professional physicians. Looking ahead, we will continue investing in and improving our R&D capabilities as well as seek new strategic partnerships, all while maintaining our close relationship with Xiaomi. With all of these efforts, we strive to provide users a better experience in sports and healthcare services, as they integrate our smart products and services into their daily lives.”

David Cui, Chief Financial Officer, said, “We are very pleased with the robust financial results in the third quarter, with revenues growing 73.3% year-over-year and net income attributed to Huami Corporation also increasing strongly year-over-year at 78.7%, as we benefited from strong unit sales, particularly with increasing global demand for both Mi-Band 4 and our newly launched Amazfit products. During this quarter, we shipped 13.7 million total units, up 67.1% from the same period last year.

“Along with revenue expansion, our operating efficiency also improved in the quarter, with operating expense as a percentage of revenues at 13.5% during the quarter, declining 4.3 and 1.4 percentage points respectively from the second quarter 2019 and the third quarter last year, despite our increasing investment in R&D capabilities and brand equity during the quarter. As we further diversify our product lines, strengthen our service offerings, form and solidify strategic alliances, and grow our global footprint, we are confident in our ability to continue delivering healthy financial and operating performance going forward.”

Third Quarter 2019 Financial Results

Revenues increased by 73.3% to RMB1,862.5 million (US$260.6 million) from RMB1,074.7 million for the third quarter of 2018, driven by continued sales growth of Xiaomi and self-branded wearable products, an increase in overall brand recognition and the global rise in the adoption of smart wearable products.

Cost of revenues increased by 76.8% to RMB1,392.7 million (US$194.8 million) from RMB787.8 million for the third quarter of 2018. The increase was in line with the sales growth of Xiaomi and self-branded wearable products.

Gross profit increased by 63.8% to RMB469.9 million (US$65.7 million) from RMB286.9 million for the third quarter of 2018. Gross margin of 25.2% for the third quarter of 2019, compared with 26.7% for the third quarter of 2018.

Total operating expenses increased to RMB250.7 million (US$35.1 million) from RMB160.3 million for the third quarter of 2018.

Research and development expenses increased by 107.7% to RMB124.5 million (US$17.4 million) from RMB60.0 million for the third quarter of 2018, primarily due to an increase in the number of R&D staff and a rise in testing costs associated with future products.

General and administrative expenses increased to RMB69.6 million (US$9.7 million) from RMB68.0 million for the third quarter of 2018, primarily due to an increase in personnel-related expenses and professional fees related to business expansion, offset by a decrease in share-based compensation.

Selling and marketing expenses increased by 75.1% to RMB56.6 million (US$7.9 million) from RMB32.3 million for the third quarter of 2018, primarily due to an increase in advertising and promotional expenses for new self-branded products and growth in personnel-related expenses.

Operating income was RMB219.1 million (US$30.7 million), compared with RMB126.6 million for the third quarter of 2018.

Income before income tax was RMB228.1 million (US$31.9 million), compared with RMB129.4 million for the third quarter of 2018.

Income tax expenses were RMB27.5 million (US$3.9 million), compared with RMB21.1 million for the third quarter of 2018.

Net income attributable to Huami Corporation totaled RMB203.3 million (US$28.4 million), compared with RMB113.8 million for the third quarter of 2018.

Net income attributable to ordinary shareholders of Huami Corporation increased to RMB203.3 million (US$28.4 million), compared with RMB109.1 million for the third quarter of 2018.

Basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB3.31 (US$0.46) and RMB3.15 (US$0.44), 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 56.3% to RMB209.8 million (US$29.4 million) from RMB134.2 million for the third quarter of 2018.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB3.41 (US$0.48) and RMB3.25 (US$0.45), respectively. Each ADS represents four (4) Class A ordinary shares.

As of September 30, 2019, the Company had cash and cash equivalents of RMB1,719.8 million (US$240.6 million), compared with RMB1,441.8 million as of December 31, 2018.

First Nine Months 2019 Financial Results

Revenues increased by 52.9% to RMB3,700.8 million (US$517.8 million) from RMB2,420.8 million in the first nine months of 2018, due to the growth of Xiaomi and self-branded wearable products, an increase in overall brand recognition and the global rise in the adoption of smart wearable products.

Cost of revenues increased by 52.8% to RMB2,736.2 million (US$382.8 million) from RMB1,790.3 million in the first nine months of 2018. The increase was in line with accelerating sales growth of both Xiaomi and self-branded wearable products.

Gross profit increased by 53.0% to RMB964.6 million (US$135.0 million) from RMB630.5 million in the first nine months of 2018. Gross margin increased to 26.1% from 26.0% in the first nine months of 2018.

Total operating expenses increased to RMB575.8 million (US$80.6 million) from RMB396.0 million in the first nine months of 2018.

Research and development expenses increased by 63.2% to RMB290.7 million (US$40.7 million) from RMB178.2 million in the first nine months of 2018, primarily due to an increase in personnel-related expenses and a rise in testing costs associated with future products.

General and administrative expenses increased by 10.6% to RMB165.9 million (US$23.2 million) from RMB150.0 million in the first nine months of 2018, primarily due to an increase in personnel-related expenses, professional fees related to business expansion, offsetting by the decrease of share-based compensation.

Selling and marketing expenses increased by 75.9% to RMB119.2 million (US$16.7 million) from RMB67.8 million in the first nine 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 RMB388.8 million (US$54.4 million), compared with RMB234.5 million in the first nine months of 2018.

Income before income tax was RMB414.9 million (US$58.0 million), compared with RMB247.2 million in the first nine months of 2018.

Income tax expenses were RMB50.6 million (US$7.1 million), compared with RMB39.7 million in the first nine months of 2018.

Net income attributable to Huami Corporation totaled RMB368.0 million (US$51.5 million), compared with RMB214.1 million in the first nine months of 2018.

Net income attributable to ordinary shareholders of Huami Corporation improved to RMB365.9 million (US$51.2 million), compared with a net loss of RMB0.3 million in the first nine 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 RMB6.03 (US$0.84) and RMB5.73 (US$0.80), 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 26.9% to RMB416.6 million (US$58.3 million) from RMB328.3 million in the first nine months of 2018.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB6.83 (US$0.96) and RMB6.49 (US$0.91), respectively, compared with RMB5.92 and RMB5.30, respectively, in the first nine months of 2018. Each ADS represents four (4) Class A ordinary shares.

Outlook

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

 

-	Net revenues to be between RMB1.93 billion and RMB1.95 billion, which would represent an increase of approximately 57.6% to 59.2% from RMB1,224.6 million for the fourth 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 7:30 a.m. Eastern Standard Time on Tuesday, November 12, 2019 (8:30 p.m. Beijing Time on November 12, 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 November 19, 2019 by dialing:

 

US Toll Free:		+1-877-344-7529
International:		+1-412-317-0088
Replay Passcode:		10136554

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 7.1477 to US$1.00, the effective noon buying rate for September 30, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on September 30, 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 September 30,
		2018				2019
		RMB				RMB				US$
Assets
Current assets:
Cash and cash equivalents			1,441,802				1,719,807				240,610
Restricted cash			10,010				498				70
Term deposit			96,969				—				—
Accounts receivable			58,925				111,877				15,652
Amounts due from related parties, current			656,399				1,226,396				171,579
Inventories			484,622				854,010				119,480
Short-term investments			50,482				22,102				3,092
Prepaid expenses and other current assets			58,247				43,049				6,023
Total current assets			2,857,456				3,977,739				556,506
Property, plant and equipment, net			40,042				56,171				7,859
Intangible asset, net			63,722				87,926				12,301
Goodwill			5,930				5,930				830
Long-term investments			208,949				407,382				56,995
Deferred tax assets			75,032				106,344				14,878
Other non-current assets			7,350				10,816				1,513
Non-current operating lease right-of-use assets			—				112,109				15,685
Total assets			3,258,481				4,764,417				666,567

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 September 30,
		2018				2019
		RMB				RMB				US$
Liabilities
Current liabilities:
Accounts payable			1,064,106				1,887,379				264,054
Advance from customers			5,943				41,307				5,779
Amount due to related parties, current			10,695				13,170				1,843
Accrued expenses and other current liabilities			213,975				236,660				33,110
Income tax payables			54,037				53,059				7,423
Notes payable			18,936				1,245				174
Bank borrowings			20,000				—				—
Current operating lease liabilities			—				30,017				4,200
Total current liabilities			1,387,692				2,262,837				316,583
Deferred tax liabilities			4,962				5,648				790
Other non-current liabilities			56,249				111,856				15,649
Non-current operating lease liabilities			—				80,181				11,218
Total liabilities			1,448,903				2,460,522				344,240

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 September 30,
		2018				2019
		RMB				RMB				US$
Equity
Ordinary shares			151				154				22
Additional paid-in capital			1,373,577				1,472,299				205,982
Accumulated retained earnings			340,046				703,493				98,422
Accumulated other comprehensive income			97,141				130,300				18,230
Total Huami Corporation shareholders’ equity			1,810,915				2,306,246				322,656
Non-controlling interests			(1,337	)			(2,351	)			(329	)
Total equity			1,809,578				2,303,895				322,327
Total liabilities and equity			3,258,481				4,764,417				666,567

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 September 30,
		2018				2019
		RMB				RMB				US$
Revenues			1,074,707				1,862,531				260,578
Cost of revenues			787,811				1,392,670				194,842
Gross profit			286,896				469,861				65,736
Operating expenses:
Selling and marketing			32,341				56,631				7,923
General and administrative			67,971				69,578				9,734
Research and development			59,958				124,538				17,424
Total operating expenses			160,270				250,747				35,081
Operating income			126,626				219,114				30,655
Other income and expenses:
Interest income			1,648				10,911				1,527
Other income (expenses), net			1,086				(1,971	)			(276	)
Income before income tax			129,360				228,054				31,906
Income tax expenses			(21,095	)			(27,518	)			(3,850	)
Income before loss from equity method investments			108,265				200,536				28,056
Income from equity method investments			4,399				2,878				403
Net income			112,664				203,414				28,459
Less: Net (loss) income attributable to non-controlling interest			(1,148	)			77				11
Net income attributable to Huami Corporation			113,812				203,337				28,448
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			4,759				—				—
Net income attributable to ordinary shareholders of Huami Corporation			109,053				203,337				28,448
Net income per share attributable to ordinary shareholders of Huami Corporation
Basic income per ordinary share			0.47				0.83				0.12
Diluted income per ordinary share			0.45				0.79				0.11
Net income per ADS (4 ordinary shares equal to 1 ADS)
ADS – basic			1.89				3.31				0.46
ADS – diluted			1.79				3.15				0.44
Weighted average number of shares used in computing net income per share
Ordinary share – basic			231,062,447				245,934,981				245,934,981
Ordinary share – diluted			244,537,743				258,343,485				258,343,485

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 September 30
		2018				2019
		RMB				RMB				US$
Net income attributable to Huami Corporation			113,812				203,337				28,448
Share-based compensation expenses			20,404				6,491				909
Adjusted net income attributable to Huami Corporation			134,216				209,828				29,357
		For the Three Months Ended September 30,
		2018				2019
		RMB				RMB				US$
Net income attributable to ordinary shareholders of Huami Corporation			109,053				203,337				28,448
Share-based compensation expenses attributable to ordinary shareholders of Huami Corporation			19,550				6,491				909
Adjusted net income attributable to ordinary shareholders of Huami Corporation2			128,603				209,828				29,357
Adjusted net income per share attributable to ordinary shareholders of Huami Corporation
Adjusted basic income per ordinary share			0.56				0.85				0.12
Adjusted diluted income per ordinary share			0.53				0.81				0.11
Adjusted net income per ADS (4 ordinary shares equal to 1 ADS)
ADS – basic			2.23				3.41				0.48
ADS – diluted			2.11				3.25				0.45
Weighted average number of shares used in computing net income per share
Ordinary share – basic			231,062,447				245,934,981				245,934,981
Ordinary share – diluted			244,537,743				258,343,485				258,343,485
Share-based compensation expenses included are follows:
Cost of revenues			5				8				1
Selling and marketing			61				647				91
General and administrative			19,340				4,130				578
Research and development			998				1,706				239
Total			20,404				6,491				909

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 Nine Months Ended September 30,
		2018				2019
		RMB				RMB				US$
Revenues			2,420,766				3,700,842				517,767
Cost of revenues			1,790,311				2,736,224				382,812
Gross profit			630,455				964,618				134,955
Operating expenses:
Selling and marketing			67,785				119,219				16,679
General and administrative			150,044				165,900				23,210
Research and development			178,151				290,669				40,666
Total operating expenses			395,980				575,788				80,555
Operating income			234,475				388,830				54,400
Other income and expenses:
Interest income			5,023				23,204				3,246
Other income, net			7,714				2,842				398
Income before income tax			247,212				414,876				58,044
Income tax expenses			(39,713	)			(50,552	)			(7,072	)
Income before loss from equity method investments			207,499				364,324				50,972
Income from equity method investments			3,663				2,647				370
Net income			211,162				366,971				51,342
Less: Net loss attributable to non-controlling interest			(2,932	)			(1,014	)			(142	)
Net income attributable to Huami Corporation			214,094				367,985				51,484
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			—				2,102				294
Net (loss) income attributable to ordinary shareholders of Huami Corporation			(252	)			365,883				51,190
Net income per share attributable to ordinary shareholders of Huami Corporation
Basic income per ordinary share			(0.00	)			1.51				0.21
Diluted income per ordinary share			(0.00	)			1.43				0.20
Net income per ADS (4 ordinary shares equal to 1 ADS)
ADS – basic			(0.00	)			6.03				0.84
ADS – diluted			(0.00	)			5.73				0.80
Weighted average number of shares used in computing net income per share
Ordinary share – basic			204,101,485				242,542,392				242,542,392
Ordinary share – diluted			204,101,485				255,322,189				255,322,189

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 Nine Months Ended September 30
		2018				2019
		RMB				RMB				US$
Net income attributable to Huami Corporation			214,094				367,985				51,484
Share-based compensation expenses			114,211				48,579				6,797
Adjusted net income attributable to Huami Corporation			328,305				416,564				58,281
		For the Nine Months Ended September 30,
		2018				2019
		RMB				RMB				US$
Net (loss) income attributable to ordinary shareholders of Huami Corporation			(252	)			365,883				51,190
Share-based compensation expenses attributable to ordinary shareholders of Huami Corporation			92,441				48,301				6,758
Deemed Dividend for Preferred shares			209,752				—				—
Adjusted net income attributable to ordinary shareholders of Huami Corporation2			301,941				414,184				57,948
Adjusted net income per share attributable to ordinary shareholders of Huami Corporation
Adjusted basic income per ordinary share			1.48				1.71				0.24
Adjusted diluted income per ordinary share			1.32				1.62				0.23
Adjusted net income per ADS (4 ordinary shares equal to 1 ADS)
ADS – basic			5.92				6.83				0.96
ADS – diluted			5.30				6.49				0.91
Weighted average number of shares used in computing net income per share
Ordinary share – basic			204,101,485				242,542,392				242,542,392
Ordinary share – diluted			216,264,202				255,322,189				255,322,189
Share-based compensation expenses included are follows:
Cost of revenues			415				47				7
Selling and marketing			4,172				2,557				358
General and administrative			71,403				36,539				5,112
Research and development			38,221				9,436				1,320
Total			114,211				48,579				6,797