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 May 2020

 


 

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    x          Form 40-F     o

 

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): o

 

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): o

 

 

 


 

Exhibit Index

 

Exhibit 99.1 — Press Release

 

2


 

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: May 13, 2020

 

3


Exhibit 99.1

 

Huami Corporation Reports First Quarter 2020 Unaudited Financial Results

 

Quarterly Revenues up 36.1% to RMB1,088.5 Million, and Shipments up 35.7% YoY

 

BEIJING, May 12, 2020 /PRNewswire/ — Huami Corporation (“Huami” or the “Company”) (NYSE: HMI), a cloud-based healthcare services provider with world-leading smart wearable technology, today announced its unaudited financial results for the first quarter ended March 31, 2020.

 

First Quarter 2020 Financial and Operating Highlights

 

·                  Revenues reached RMB1,088.5 million (US$153.7 million), representing an increase of 36.1% from the first quarter of 2019.

 

·                  Gross margin was 22.5% for the first quarter of 2020.

 

·                  Net income attributable to Huami Corporation was RMB19.2 million (US$2.7 million).

 

·                  Basic and diluted net income per American depositary share (“ADS”) attributable to ordinary shareholders of Huami Corporation was RMB0.31 (US$0.04) and RMB0.30 (US$0.04), respectively. Each ADS represents four (4) Class A ordinary shares.

 

·                  Adjusted net income attributable to Huami Corporation1 was RMB25.5 million (US$3.6 million).

 

·                  Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation2 was RMB0.41 (US$0.06) and RMB0.39 (US$0.06), respectively. Each ADS represents four (4) Class A ordinary shares.

 

·                  Total units shipped reached 7.6 million, compared with 5.6 million in the first quarter of 2019.

 

Impact of the COVID-19 Pandemic on Our Operations

 

COVID-19 had a severe and negative impact on the Chinese and the global economy in the first quarter of 2020. The quantity of our products manufactured reduced in January and February 2020 as our contracted manufacturing facilities were temporarily shut down. While these manufacturing facilities have been ramping-up since March, our supply chain, production, and sales in the first quarter of 2020 were all impacted, resulting lower than initially projected growth rates and gross margin. In the second quarter, the COVID-19 continues to impact global economy, including the demand of our products in oversea markets. We have reflected this impact within our view in the “outlook” section provided below, and we will monitor the COVID-19 impact continuously.

 


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 is used as the numerator in computation of adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation.

 


 

“Despite the unprecedented challenges created by the COVID-19 pandemic, brand recognition, new product launches and successful marketing spearheaded solid first quarter revenue growth of 36.1%,” said Wang Huang, Chairman and CEO of Huami. “In addition to the aforementioned revenue drivers, we also made solid headway in international markets, with a keen focus on the market nuances of each key region and a multi-channel strategy including both direct sales and third-party sales channels.

 

“At this year’s CES, we kicked off our brand extension initiative as we introduced new product categories, including ear buds and interactive treadmills. With these two categories in particular, we are taking another significant step in building a comprehensive health and fitness ecosystem as part of our ‘Connect Health with Technology’ aspirations. In terms of alliances, our continued partnership with Xiaomi remains productive with the launch of the Mi-Band 5 scheduled later in 2020. Additionally, we are very pleased to partner with the respiratory diseases team of Dr. Zhong Nanshan to jointly establish a laboratory for studies on monitoring respiratory diseases using wearable devices. With this, we expect to make contributions in the global fight against the COVID-19 pandemic, and utilize our smart wearable devices to establish a cloud-based service system for epidemic prediction and early warning in the future. With our brand’s rising popularity, our strengthening sales channels and new product and line extensions in the works, we are confident the underlying demand for our products remain strong and we will look to continue delivering sustainable growth and healthy profitability once the impact from the pandemic eases.”

 

David Cui, Chief Financial Officer, added, “We rose to the challenge and are pleased with the resilience of our first quarter revenue growth during these uncertain times. We achieved solid unit sales of both self-branded products and Mi-Band 4, shipping 7.6 million units in the first quarter, a 35.7% rise from the same period last year. Despite of the impact of the COVID-19 pandemic that many other companies are also facing, we still kept our robust revenue growth, and remained profitable in this challenging time period. This was driven by increasing brand awareness and adoption of our products by users both domestically and in the overseas market.

 

“During the first quarter, we continue to push investments in both R&D and sales and marketing, as product innovation and sales channel integrity are key components of our success. While we have seen some shortage impacts on our product manufacturing due to disruptions to our supply chain during the quarter, we are optimistic of stronger profitability in the long term as the pandemic, along with its impact, runs its course.”

 


 

First Quarter 2020 Financial Results

 

Revenues increased by 36.1% to RMB1,088.5 million (US$153.7 million) from RMB799.6 million for the first quarter of 2019, driven by continued sales growth of Xiaomi and self-branded wearable products, despite the negative impact of COVID-19 on our supply chain.

 

Cost of revenues increased by 45.0% to RMB843.9 million (US$119.2 million) from RMB582.1 million for the first quarter of 2019.

 

Gross profit increased by 12.5% to RMB244.6 million (US$34.5 million) from RMB217.5 million for the first quarter of 2019. Gross margin was 22.5%, compared with 27.2% for the first quarter of 2019. The gross margin decrease was attributed to the change of product mix, and sales promotions in previous product versions, especially for Mi Band 4, in anticipation of the launch of a newer generation product.

 

Total operating expenses increased to RMB224.1 million (US$31.6 million) from RMB139.9 million for the first quarter of 2019.

 

Research and development expenses increased by 63.5% from RMB72.4 million in first quarter 2019 to RMB118.3 million (US$16.7 million) in first quarter 2020. This increase was primarily due to an increase in the number of R&D staff and a rise in investment in healthcare related features, algorithms, cloud-services, chip research, and new products development to carry out our mission. We aim to launch a series of new products in the upcoming quarters of 2020.

 

General and administrative expenses increased by 12.3% from RMB45.3 in the first quarter 2019 to RMB50.9 million (US$7.2 million) in the first quarter 2020. This was primarily due to an increase in personnel-related expenses and professional fees related to improving management operations, offset by a decrease in share-based compensation expense and foreign exchange rate fluctuation.

 

Selling and marketing expenses increased by 147.2% from RMB22.2 million in first quarter 2019 to RMB54.8 million (US$7.7 million) first quarter 2020, primarily due to an increase in personnel-related expenses, and an increase in advertising and promotional expenses for new market exploration and a series of new product releases. We hired more sales staff with heavy experience in overseas market expansion since 2019, and continue to carry out our plan during this year. In January 2020, we unveiled four new products spanning three verticals that go beyond smart bands and watches: Amazfit Home Studio, a smart gym hub; Amazfit AirRun, a foldable next-generation treadmill; Amazfit PowerBuds, true wireless stereo fitness earphones with Clip-to-Go design and; Amazfit ZenBuds, sleep-comfort and health monitoring earphones.

 


 

Operating income was RMB20.5 million (US$2.9 million), compared with RMB77.6 million for the first quarter of 2019.

 

Income before income tax was RMB20.3 million (US$2.9 million), compared with RMB85.6 million for the first quarter of 2019.

 

Income tax expenses were RMB2.0 million (US$0.3 million), compared with RMB10.7 million for the first quarter of 2019.

 

Net income attributable to Huami Corporation totaled RMB19.2 million (US$2.7 million), compared with RMB75.3 million for the first quarter of 2019.

 

Net income attributable to ordinary shareholders of Huami Corporation decreased to RMB19.2 million (US$2.7 million), from RMB74.1 million for the first quarter of 2019.

 

Basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB0.31 (US$0.04) and RMB0.30 (US$0.04), respectively. Each ADS represents four (4) Class A ordinary shares.

 

Adjusted net income attributable to Huami Corporation, which excludes share-based compensation expenses, decreased by 73.1% to RMB25.5 million (US$3.6 million) from RMB95.0 million for the first quarter of 2019.

 

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB0.41 (US$0.06) and RMB0.39 (US$0.06), respectively. Each ADS represents four (4) Class A ordinary shares.

 

As of March 31, 2020, the Company had cash and cash equivalents of RMB2,527.6 million (US$357.0 million), compared with RMB1,803.1 million as of December 31, 2019.

 

Outlook

 

For the second quarter of 2020, the management of the Company currently expects:

·                  Net revenues to be between RMB1.0 billion and RMB1.05 billion, compared with RMB1.04 billion for the second quarter of 2019.

 

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 Standard Time on Tuesday, May 12, 2020 (8:00 p.m. Beijing Time on May 12, 2020) 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 May 19, 2020 by dialing:

 

US Toll Free:

 

1-877-344-7529

International:

 

1-412-317-0088

Replay Passcode:

 

10143641

 

About Huami Corporation

 

Huami is a cloud-based healthcare services provider with world-leading smart wearable technology. Since its inception in 2013, Huami has quickly established its global leadership and recognition in the smart wearable industry by shipping millions of smart wearable devices. In 2019, Huami shipped 42.3 million smart wearable devices. Leveraging its powerful AI algorithm capabilities along with the massive data analysis, Huami provides 24x7 health monitoring services to millions of its product users. Huami seamlessly integrate smart wearable technology into the extensive application senarios of the IoT ecosystem worldwide, creating a smarter and more convenient lifestyle for its users.

 


 

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 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 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 RMB7.0808 to US$1.00, the effective noon buying rate for March 31, 2020 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on March 31, 2020, 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,

 

 

 

2019

 

2020

 

 

 

RMB

 

RMB

 

US$

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

1,803,117

 

2,527,567

 

356,961

 

Restricted cash

 

874

 

 

 

Accounts receivable

 

188,940

 

150,865

 

21,306

 

Amounts due from related parties, current

 

1,421,170

 

441,526

 

62,355

 

Inventories

 

893,806

 

719,092

 

101,555

 

Short-term investments

 

17,187

 

17,496

 

2,471

 

Prepaid expenses and other current assets

 

67,358

 

38,874

 

5,490

 

Total current assets

 

4,392,452

 

3,895,420

 

550,138

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

64,350

 

75,447

 

10,655

 

Intangible asset, net

 

85,753

 

83,587

 

11,805

 

Goodwill

 

5,930

 

5,930

 

837

 

Long-term investments

 

406,099

 

410,133

 

57,922

 

Deferred tax assets

 

102,649

 

113,453

 

16,023

 

Other non-current assets

 

8,828

 

28,796

 

4,067

 

Non-current operating lease right-of-use assets

 

108,682

 

98,966

 

13,977

 

Total assets

 

5,174,743

 

4,711,732

 

665,424

 

 


 

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,

 

 

 

2019

 

2020

 

 

 

RMB

 

RMB

 

US$

 

Liabilities

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

1,999,951

 

768,417

 

108,521

 

Advance from customers

 

44,793

 

45,777

 

6,465

 

Amount due to related parties, current

 

14,769

 

15,062

 

2,127

 

Accrued expenses and other current liabilities

 

352,249

 

305,490

 

43,144

 

Income tax payables

 

67,854

 

70,021

 

9,889

 

Notes payable

 

2,184

 

 

 

Bank borrowings

 

 

785,737

 

110,967

 

Total current liabilities

 

2,481,800

 

1,990,504

 

281,113

 

Deferred tax liabilities

 

5,399

 

5,375

 

759

 

Other non-current liabilities

 

113,596

 

113,596

 

16,043

 

Non-current operating lease liabilities

 

76,360

 

68,363

 

9,655

 

Total liabilities

 

2,677,155

 

2,177,838

 

307,570

 

 


 

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,

 

 

 

2019

 

2020

 

 

 

RMB

 

RMB

 

US$

 

Equity

 

 

 

 

 

 

 

Ordinary shares

 

155

 

155

 

22

 

Additional paid-in capital

 

1,478,902

 

1,485,280

 

209,762

 

Accumulated retained earnings

 

910,612

 

929,780

 

131,310

 

Accumulated other comprehensive income

 

111,081

 

123,067

 

17,380

 

Total Huami Corporation shareholders’ equity

 

2,500,750

 

2,538,282

 

358,474

 

Non-controlling interests

 

(3,162

)

(4,388

)

(620

)

Total equity

 

2,497,588

 

2,533,894

 

357,854

 

Total liabilities and equity

 

5,174,743

 

4,711,732

 

665,424

 

 


 

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,

 

 

 

2019

 

2020

 

 

 

RMB

 

RMB

 

US$

 

Revenues

 

799,596

 

1,088,461

 

153,720

 

Cost of revenues

 

582,133

 

843,901

 

119,182

 

Gross profit

 

217,463

 

244,560

 

34,538

 

Operating expenses:

 

 

 

 

 

 

 

Selling and marketing

 

22,183

 

54,843

 

7,745

 

General and administrative

 

45,292

 

50,883

 

7,186

 

Research and development

 

72,380

 

118,336

 

16,712

 

Total operating expenses

 

139,855

 

224,062

 

31,643

 

Operating income

 

77,608

 

20,498

 

2,895

 

Other income and expenses:

 

 

 

 

 

 

 

Interest income

 

7,490

 

7,671

 

1,083

 

Other income (expenses), net

 

462

 

(9,155

)

(1,293

)

Gain from fair value change of long-term investment

 

 

1,293

 

183

 

Income before income tax

 

85,560

 

20,307

 

2,868

 

Income tax expenses

 

(10,682

)

(2,033

)

(287

)

Income before loss from equity method investments

 

74,878

 

18,274

 

2,581

 

Income (Loss) from equity method investments

 

34

 

(332

)

(47

)

Net income

 

74,912

 

17,942

 

2,534

 

Less: Net loss attributable to non-controlling interest

 

(372

)

(1,226

)

(173

)

Net income attributable to Huami Corporation

 

75,284

 

19,168

 

2,707

 

Less: Undistributed earnings allocated to participating nonvested restricted shares

 

1,153

 

 

 

Net income attributable to ordinary shareholders of Huami Corporation

 

74,131

 

19,168

 

2,707

 

Net income per share attributable to ordinary  shareholders of Huami Corporation

 

 

 

 

 

 

 

Basic income per ordinary share

 

0.31

 

0.08

 

0.01

 

Diluted income per ordinary share

 

0.29

 

0.07

 

0.01

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

ADS — basic

 

1.25

 

0.31

 

0.04

 

ADS — diluted

 

1.18

 

0.30

 

0.04

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Ordinary share — basic

 

238,007,944

 

247,657,168

 

247,657,168

 

Ordinary share — diluted

 

252,131,378

 

259,574,866

 

259,574,866

 

 


 

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,

 

 

 

2019

 

2020

 

 

 

RMB

 

RMB

 

US$

 

Net income attributable to Huami Corporation

 

75,284

 

19,168

 

2,707

 

Share-based compensation expenses

 

19,733

 

6,378

 

901

 

Adjusted net income attributable to Huami Corporation

 

95,017

 

25,546

 

3,608

 

 

 

 

For the Three Months Ended March 31,

 

 

 

2019

 

2020

 

 

 

RMB

 

RMB

 

US$

 

Net income attributable to ordinary shareholders of Huami Corporation

 

74,131

 

19,168

 

2,707

 

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

 

19,431

 

6,378

 

901

 

Adjusted net income attributable to ordinary shareholders of Huami Corporation2

 

93,562

 

25,546

 

3,608

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Adjusted basic income per ordinary share

 

0.39

 

0.10

 

0.01

 

Adjusted diluted income per ordinary share

 

0.37

 

0.10

 

0.01

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

ADS — basic

 

1.57

 

0.41

 

0.06

 

ADS — diluted

 

1.49

 

0.39

 

0.06

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Ordinary share — basic

 

238,007,944

 

247,657,168

 

247,657,168

 

Ordinary share — diluted

 

252,131,378

 

259,574,866

 

259,574,866

 

 

 

 

 

 

 

 

 

Share-based compensation expenses included are follows:

 

 

 

 

 

 

 

Cost of revenues

 

2

 

7

 

1

 

Selling and marketing

 

331

 

632

 

89

 

General and administrative

 

17,436

 

4,097

 

579

 

Research and development

 

1,964

 

1,642

 

232

 

Total

 

19,733

 

6,378

 

901