PR Newswire | Sep 24, 2021 06:00AM EDT

09/24 05:00 CDT

51job, Inc. Reports Second Quarter 2021 Financial Results SHANGHAI, Sept. 24, 2021

SHANGHAI, Sept. 24, 2021 /PRNewswire/ --51job, Inc. (NasdaqJOBS) ("51job" or the "Company"), a leading provider of integrated human resource services in China, announced today its unaudited financial results for the second quarter of 2021 ended June 30, 2021.

Second Quarter 2021 Financial Highlights:

* Net revenues increased 32.6% over Q2 2020 to RMB1,098.7 million (US$170.2 million) * Online recruitment services revenues increased 17.4% * Other human resource related revenues increased 56.2% * Income from operations was RMB109.3 million (US$16.9 million) * Fully diluted earnings per share was RMB2.66 (US$0.41) * Excluding share-based compensation expense, loss from foreign currency translation, and change in fair value of listed equity securities investment, as well as the related tax effect of these items, non-GAAP adjusted fully diluted earnings per share was RMB3.64 (US$0.56)

Second Quarter 2021 Unaudited Financial Results

Net revenues for the second quarter ended June 30, 2021 were RMB1,098.7 million (US$170.2 million), an increase of 32.6% from RMB828.6 million for the same quarter in 2020.

Online recruitment services revenues for the second quarter of 2021 increased 17.4% to RMB590.6 million (US$91.5 million) compared with RMB503.3 million for the same quarter in 2020 primarily due to improved market conditions and more hiring activity from employers this year. While the Company believes there will be continued recovery in its online recruitment business in 2021, the recruitment outlook may be affected by uncertainty in the ongoing global pandemic and occasional restrictions instituted by authorities to contain outbreaks in China.

Other human resource related revenues for the second quarter of 2021 increased 56.2% to RMB508.1 million (US$78.7 million) from RMB325.4 million for the same quarter in 2020. The growth was primarily driven by strong demand for training services, campus recruitment campaigns, placement projects and business process outsourcing services this year.

Gross profit for the second quarter of 2021 increased 21.8% to RMB678.9 million (US$105.1 million) from RMB557.5 million for the same quarter of the prior year. Gross margin, which is gross profit as a percentage of net revenues, was 61.8% in the second quarter of 2021 compared with 67.3% for the same quarter in 2020. The increase in cost of services was primarily due to higher employee compensation expenses, staff additions and greater direct costs, such as venue rentals and media production services, incurred in providing training, campus recruitment and placement services to employers.

Operating expenses for the second quarter of 2021 increased 45.3% to RMB569.5 million (US$88.2 million) from RMB391.9 million for the same quarter in 2020. Sales and marketing expenses for the second quarter of 2021 increased 55.7% to RMB455.6 million (US$70.6 million) from RMB292.7 million for the same quarter of the prior year, primarily due to greater spending on brand advertising as well as more headcount and higher employee compensation expenses. Advertising and promotion expenses increased 86.9% to RMB127.4 million (US$19.7 million) in the second quarter of 2021 from RMB68.2 million in the same quarter of the prior year. The Company has plans to significantly increase sales and marketing investments this year to strengthen its brands and promote its wide range of service offerings.

General and administrative expenses for the second quarter of 2021 increased 14.8% to RMB113.9 million (US$17.6 million) from RMB99.2 million for the same quarter of the prior year, primarily due to higher employee compensation, share-based compensation, and professional services fees.

Income from operations for the second quarter of 2021 was RMB109.3 million (US$16.9 million) compared with RMB165.5 million for the second quarter of 2020. Operating margin, which is income from operations as a percentage of net revenues, was 9.9% in the second quarter of 2021 compared with 20.0% for the same quarter in 2020. Excluding share-based compensation expense, operating margin would have been 14.4% in the second quarter of 2021 compared with 24.6% for the same quarter in 2020.

The Company recognized a loss from foreign currency translation of RMB12.5 million (US$1.9 million) in the second quarter of 2021 compared with RMB0.5 million in the second quarter of 2020, primarily due to the impact of the change in exchange rate between the Renminbi and the U.S. dollar on the Company's U.S. dollar cash deposits.

Interest and investment income for the second quarter of 2021 was RMB31.9 million (US$4.9 million) compared with RMB66.4 million in the second quarter of 2020, primarily due to the reallocation of cash resources from time deposits to lower interest-bearing demand accounts.

The Company recognized a mark-to-market, non-cash loss of RMB5.2 million (US$0.8 million) in the second quarter of 2021 compared with a gain of RMB56.8 million in the second quarter of 2020 associated with a change in fair value of listed equity securities investment in Huali University Group Limited, which is traded on the Hong Kong Stock Exchange.

Other income in the second quarter of 2021 included local government financial subsidies of RMB85.2 million (US$13.2 million) compared with RMB144.9 million in the second quarter of 2020.

Net income attributable to 51job for the second quarter of 2021 was RMB181.7 million (US$28.1 million) compared with RMB376.7 million for the same quarter in 2020. Fully diluted earnings per share for the second quarter of 2021 was RMB2.66(US$0.41) compared with RMB5.55 for the same quarter in 2020.

In the second quarter of 2021, total share-based compensation expense was RMB49.3 million (US$7.6 million) compared with RMB38.1 million in the second quarter of 2020.

Excluding share-based compensation expense, loss from foreign currency translation, and change in fair value of listed equity securities investment, as well as the related tax effect of these items, non-GAAP adjusted net income attributable to 51job for the second quarter of 2021 was RMB248.7 million (US$38.5 million) compared with RMB358.5 million for the second quarter of 2020. Non-GAAP adjusted fully diluted earnings per share was RMB3.64(US$0.56) in the second quarter of 2021 compared with RMB5.28 in the second quarter of 2020.

As of June 30, 2021, cash and short-term investments totaled RMB10,812.9 million (US$1,674.7 million) compared with RMB10,761.9 million as of December 31, 2020.

Currency Convenience Translation

For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollar amounts at the rate of RMB6.4566 to US$1.00, the noon buying rate on June 30, 2021 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

Use of Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), 51job uses non-GAAP financial measures of income before income tax expense, income tax expense, adjusted net income, adjusted net income attributable to 51job and adjusted earnings per share, which are adjusted from results based on GAAP to exclude share-based compensation expense, gain/loss from foreign currency translation and change in fair value of listed equity securities investment, as well as the related tax effect of these items. The Company believes excluding share-based compensation expense and its related tax effect from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such expense is not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company believes excluding gain/loss from foreign currency translation and change in fair value of listed equity securities investment, as well as the related tax effect, from its non-GAAP financial measures is useful for its management and investors as such translation, mark-to-market gain or loss is not indicative of the Company's core business operations and will not result in cash settlement nor impact the Company's cash earnings. 51job also believes these non-GAAP financial measures excluding share-based compensation expense, gain from foreign currency translation and change in fair value of listed equity securities investment, as well as the related tax effect of these items, are important in helping investors to understand the Company's current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.

About 51job

Founded in 1998, 51job is a leading provider of integrated human resource services in China. With a comprehensive suite of HR solutions, 51job meets the needs of enterprises and job seekers through the entire talent management cycle, from initial recruitment to employee retention and career development. The Company's main online recruitment platforms ( http://www.51job.com, http://www.yingjiesheng.com, http://www.51jingying.com, http://www.lagou.com, and http://www.51mdd.com), as well as mobile applications, connect millions of people with employment opportunities every day. 51job also provides a number of other value-added HR services, including business process outsourcing, training, professional assessment, campus recruitment, executive search and compensation analysis. 51job has a call center in Wuhan and a nationwide network of sales and service locations spanning more than 30 cities across China.

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," "targets," "confident" and similar statements. Among other things, statements that are not historical facts, including statements about 51job's beliefs and expectations, as well as 51job's strategic and operational plans, are or contain forward-looking statements. 51job may also make written or oral forward-looking statements in its periodic reports 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. All forward-looking statements are based upon management's expectations at the time of the statements and 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: execution of 51job's strategies and business plans; growth and trends of the human resource services industry in China; market acceptance of 51job's products and services; competition in the industry; 51job's ability to control costs and expenses; 51job's ability to retain key personnel and attract new talent; relevant government policies and regulations relating to 51job's industry, corporate structure and business operations; seasonality in the business; fluctuations in the value of the Renminbi against the U.S. dollar and other currencies; risks related to acquisitions or investments 51job has made or will make in the future; accounting adjustments that may occur during the quarterly or annual close or auditing process; and fluctuations in general economic and business conditions in China and globally, including the impact of the coronavirus or other pandemic. Further information regarding these and other risks are included in 51job's filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release and based on assumptions that 51job believes to be reasonable as of this date, and 51job undertakes no obligation to update any forward-looking statement, except as required under applicable law.

51job, Inc.

Consolidated Statements of Operations and Comprehensive Income

For the Three Months Ended

June 30, June 30, June 30, 2020 2021 2021

(In thousands, except share and per share (unaudited) (unaudited) (unaudited)data)

RMB RMB US$ (Note 1)

Revenues:

Online recruitment services 503,254 590,594 91,471

Other human resource related revenues 325,374 508,147 78,702

Net revenues 828,628 1,098,741 170,173

Cost of services (Note 2) (271,176) (419,884) (65,032)

Gross profit 557,452 678,857 105,141

Operating expenses:

Sales and marketing (Note 3) (292,732) (455,648) (70,571)

General and administrative (Note 4) (99,192) (113,888) (17,639)

Total operating expenses (391,924) (569,536) (88,210)

Income from operations 165,528 109,321 16,931

Loss from foreign currency translation (547) (12,523) (1,940)

Interest and investment income, net 66,419 31,938 4,947

Change in fair value of listed equity 56,806 (5,158) (799)securities investment

Other income, net 144,590 85,015 13,167

Income before income tax expense 432,796 208,593 32,306

Income tax expense (59,621) (37,517) (5,811)

Net income 373,175 171,076 26,495

Net loss attributable to non-controlling 3,485 10,600 1,642interests

Net income attributable to 51job, Inc. 376,660 181,676 28,137

Net income 373,175 171,076 26,495

Other comprehensive loss (5) (225) (35)

Total comprehensive income 373,170 170,851 26,460

Earnings per share:

Basic 5.62 2.69 0.42

Diluted 5.55 2.66 0.41

Weighted average number of common sharesoutstanding:

Basic 67,009,015 67,434,856 67,434,856

Diluted 67,878,333 68,247,200 68,247,200

Notes:

(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on thenoon buying rate of RMB6.4566

to US$1.00 on June 30, 2021 in New York for cable transfers of Renminbi as setforth in the H.10 weekly statistical

release of the Federal Reserve Board.

(2) Includes share-based compensation expense of RMB6,079 and RMB7,875(US$1,220) for the three months ended

June 30, 2020 and 2021, respectively.

(3) Includes share-based compensation expense of RMB5,225 and RMB6,770(US$1,048) for the three months ended

June 30, 2020 and 2021, respectively.

(4) Includes share-based compensation expense of RMB26,826 and RMB34,684(US$5,372) for the three months ended

June 30, 2020 and 2021, respectively.

51job, Inc.

Consolidated Statements of Operations and Comprehensive Income

For the Six Months Ended

June 30, June 30, June 30, 2020 2021 2021

(In thousands, except share and per share (unaudited) (unaudited) (unaudited)data)

RMB RMB US$ (Note 1)

Revenues:

Online recruitment services 1,050,271 1,135,956 175,937

Other human resource related revenues 569,468 857,938 132,878

Net revenues 1,619,739 1,993,894 308,815

Cost of services (Note 2) (525,479) (741,650) (114,867)

Gross profit 1,094,260 1,252,244 193,948

Operating expenses:

Sales and marketing (Note 3) (568,924) (929,566) (143,971)

General and administrative (Note 4) (189,834) (209,428) (32,436)

Total operating expenses (758,758) (1,138,994) (176,407)

Income from operations 335,502 113,250 17,541

Gain (Loss) from foreign currency 9,624 (7,178) (1,112)translation

Interest and investment income, net 110,734 91,955 14,242

Change in fair value of equity securities 66,697 (18,413) (2,852)investment

Other income, net 148,925 89,744 13,900

Income before income tax expense 671,482 269,358 41,719

Income tax expense (96,392) (52,164) (8,079)

Net income 575,090 217,194 33,640

Net loss attributable to non-controlling 6,816 21,707 3,362interests

Net income attributable to 51job, Inc. 581,906 238,901 37,002

Net income 575,090 217,194 33,640

Other comprehensive income (loss) 303 (163) (25)

Total comprehensive income 575,393 217,031 33,615

Earnings per share:

Basic 8.70 3.54 0.55

Diluted 8.56 3.50 0.54

Weighted average number of common sharesoutstanding:

Basic 66,906,106 67,421,251 67,421,251

Diluted 67,942,579 68,202,198 68,202,198

Notes:

(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on thenoon buying rate of RMB6.4566

to US$1.00 on June 30, 2021 in New York for cable transfers of Renminbi as setforth in the H.10 weekly

statistical release of the Federal Reserve Board.

(2) Includes share-based compensation expense of RMB11,996 and RMB14,077(US$2,181) for the six months ended

June 30, 2020 and 2021, respectively.

(3) Includes share-based compensation expense of RMB10,312 and RMB12,102(U$1,874) for the six months ended

June 30, 2020 and 2021, respectively.

(4) Includes share-based compensation expense of RMB52,946 and RMB62,068(US$9,613) for the six months ended

June 30, 2020 and 2021, respectively.

51job, Inc.

Reconciliation of GAAP and Non-GAAP Results

For the Three Months Ended

June 30, June 30, June 30, 2020 2021 2021

(In thousands, except share and per share (unaudited) (unaudited) (unaudited)data)

RMB RMB US$ (Note 1)

GAAP income before income tax expense 432,796 208,593 32,306

Add: Share-based compensation 38,130 49,329 7,640

Add: Loss from foreign currency 547 12,523 1,940translation

Add (Less): Change in fair value oflisted equity securities (56,806) 5,158 799 investment

Non-GAAP income before income tax expense 414,667 275,603 42,685

GAAP income tax expense (59,621) (37,517) (5,811)

Tax effect of non-GAAP line items (8) (9) (1)

Non-GAAP income tax expense (59,629) (37,526) (5,812)

Non-GAAP adjusted net income 355,038 238,077 36,873

Non-GAAP adjusted net income attributable 358,523 248,677 38,515to 51job, Inc.

Non-GAAP adjusted earnings per share:

Basic 5.35 3.69 0.57

Diluted 5.28 3.64 0.56

Weighted average number of common sharesoutstanding:

Basic 67,009,015 67,434,856 67,434,856

Diluted 67,878,333 68,247,200 68,247,200

For the Six Months Ended

June 30, June 30, June 30, 2020 2021 2021

(In thousands, except share and per share (unaudited) (unaudited) (unaudited)data)

RMB RMB US$ (Note 1)

GAAP income before income tax expense 671,482 269,358 41,719

Add: Share-based compensation 75,254 88,247 13,668

Add (Less): (Gain) Loss from foreign (9,624) 7,178 1,112currency translation

Add (Less): Change in fair value oflisted equity securities (66,697) 18,413 2,852 investment

Non-GAAP income before income tax expense 670,415 383,196 59,351

GAAP income tax expense (96,392) (52,164) (8,079)

Tax effect of non-GAAP line items (39) 84 13

Non-GAAP income tax expense (96,431) (52,080) (8,066)

Non-GAAP adjusted net income 573,984 331,116 51,285

Non-GAAP adjusted net income attributable 580,800 352,823 54,647to 51job, Inc.

Non-GAAP adjusted earnings per share:

Basic 8.68 5.23 0.81

Diluted 8.55 5.17 0.80

Weighted average number of common sharesoutstanding:

Basic 66,906,106 67,421,251 67,421,251

Diluted 67,942,579 68,202,198 68,202,198

Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is basedon the noon buying rate of RMB6.4566

to US$1.00 on June 30, 2021 in New York for cable transfers of Renminbi as setforth in the H.10 weekly statistical

release of the Federal Reserve Board.

51job, Inc.

Consolidated Balance Sheets

As of

December June 30, June 30, 31, 2021 2021 2020

(In thousands, except share and per share (unaudited) (unaudited) (unaudited)data)

RMB RMB US$ (Note 1)

ASSETS

Current assets:

Cash 3,292,698 9,036,457 1,399,569

Restricted cash 2,258 - -

Short-term investments 7,469,213 1,776,482 275,142

Accounts receivable (net of allowance of RMB26,798 and

RMB24,240 as of December 31, 2020 and June 30, 2021,

respectively) 290,480 329,184 50,984

Prepayments and other current assets 492,980 562,226 87,078

Total current assets 11,547,629 11,704,349 1,812,773

Non-current assets:

Time deposits 719,189 732,212 113,405

Long-term investments 1,576,250 1,556,171 241,020

Property and equipment, net 273,157 269,892 41,801

Goodwill 1,036,124 1,036,124 160,475

Intangible assets, net 163,503 145,628 22,555

Right-of-use assets 307,869 314,536 48,715

Other long-term assets 13,946 424,144 65,692

Deferred tax assets 38,013 44,102 6,831

Total non-current assets 4,128,051 4,522,809 700,494

Total assets 15,675,680 16,227,158 2,513,267

LIABILITIES, MEZZANINE EQUITY AND EQUITY

Current liabilities:

Accounts payable 83,087 136,943 21,210

Salary and employee related accrual 182,565 134,771 20,873

Taxes payable 172,254 122,720 19,007

Advances from customers 1,158,604 1,310,715 203,004

Lease liabilities, current 34,952 42,406 6,568

Other payables and accruals 1,178,955 1,305,834 202,248

Total current liabilities 2,810,417 3,053,389 472,910

Non-current liabilities:

Lease liabilities, non-current 44,949 47,719 7,391

Deferred tax liabilities 232,087 225,891 34,986

Total non-current liabilities 277,036 273,610 42,377

Total liabilities 3,087,453 3,326,999 515,287

Mezzanine equity:

Redeemable non-controlling interests 189,811 167,434 25,932

Shareholders' equity:

Common shares (US$0.0001 par value: 500,000,000 shares

authorized, 67,406,657 and 67,437,209 shares issued and

outstanding as of December 31, 2020 and June 30, 2021,

respectively) 54 54 8

Additional paid-in capital 5,206,154 5,301,874 821,156

Statutory reserves 18,474 18,474 2,861

Accumulated other comprehensive income 276,975 276,812 42,873

Retained earnings 6,871,090 7,109,991 1,101,197

Total 51job, Inc. shareholders' equity 12,372,747 12,707,205 1,968,095

Non-controlling interests 25,669 25,520 3,953

Total equity 12,398,416 12,732,725 1,972,048

Total liabilities, mezzanine equity and 15,675,680 16,227,158 2,513,267equity

Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is basedon the noon buying rate of RMB6.4566 to US$1.00

on June 30, 2021 in New York for cable transfers of Renminbi as set forth inthe H.10 weekly statistical release of the Federal

Reserve Board.

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SOURCE 51job