PR Newswire | Nov 15, 2021 05:00AM EST

11/15 04:00 CST

Dingdong (Cayman) Limited Announces Third Quarter 2021 Financial Results SHANGHAI, Nov. 15, 2021

SHANGHAI, Nov. 15, 2021 /PRNewswire/ -- Dingdong (Cayman) Limited ("Dingdong" or the "Company") (NYSE: DDL), a leading and fastest-growing company in the domestic neighborhood retail industry in China, with advanced supply chain capabilities, today announced its unaudited financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Highlights:

* GMV for the third quarter of 2021 increased by 107.7% year over year to RMB 7,018.5 million (US$ 1,089.3 million) from RMB 3,379.0 million in the same quarter of 2020. * Total revenue for the third quarter of 2021 increased by 111.0% year over year to RMB 6,189.5 million (US$ 960.6 million) from RMB 2,933.5 million in the same quarter of 2020. * The number of average monthly transacting users for the third quarter of 2021 increased by 120.3% year over year to 10.5 million from 4.8 million in the same quarter of 2020. * The number of frontline fulfillment station was 1,375 as of September 30, 2021, increased from 711 as of September 30, 2020.

Mr. Changlin Liang, Founder and Chief Executive Officer of Dingdong, stated, "In the third quarter, we proactively adjusted our strategic focus to "Efficiency first, with due consideration of scale." As such, we rapidly improved efficiency and significantly narrowed our non-GAAP net loss margin. We are confident that we will further reduce the non-GAAP net loss margin substantially in the fourth quarter. We are more optimistic now than we were during the IPO process about our expected profitability timeline. China has transitioned from an era of simply meeting basic human needs to a period of prosperity, leading to tremendous changes in people's consumption habits. This is a momentous era. Through deeper engagement in our supply chain and enhancement of our product development capabilities, we will live up to the opportunities presented by the times, create value for consumers, and generate long-term returns for our investors."

Ms. Le Yu, Chief Strategy Officer of Dingdong, stated, "For the fourth quarter, we will remain focused on serving higher-value users, improving our non-GAAP net loss margin, and growing our GMV on a year-over-year basis. We will continue to improve our gross margin while further benefiting from our upfront investments in the supply chain, increasing the GMV contribution from our private label brands and in-house products, and optimizing our product mix. In terms of non-GAAP net loss margin, we expect to achieve a greater sequential improvement in the fourth quarter than in the third quarter. In Shanghai, the home of our first operation, we expect our unit economics to reach breakeven in the coming quarter, driving unit economics in the Yangtze Delta region to steadily turn positive in the future."

Third Quarter 2021 Financial Results

Total revenues were RMB 6,189.5 million (US$ 960.6 million), representing an increase of 111.0% from the same period of 2020, mainly driven by the robust growth in the Company's GMV.

* Product Revenues were RMB 6,122.3 million (US$ 950.2 million), an increase of 111.2% from RMB 2,899.2 million in the same quarter of 2020. * Service Revenues were RMB 67.2 million (US$ 10.4 million), an increase of 95.9% from RMB 34.3 million in the same quarter of 2020.

Total operating costs and expenseswere RMB 8,208.3 million (US$ 1,273.9 million), an increase of 117.3% from RMB 3,777.4 million in the same quarter of 2020, mainly driven by the increase in business scale.

* Cost of Goods Sold were RMB 5,061.2 million (US$ 785.5 million), an increase of 109.2% from RMB 2,419.7 million in the same quarter of 2020, generally in line with the increase in total revenue. * Fulfillment expenses were RMB 2,308.7 million (US$ 358.3 million), an increase of 120.8% from RMB 1,045.6 million in the same quarter of 2020, generally in line with the increase in total revenues. * Sales and marketing expenses were RMB 428.3 million (US$ 66.5 million), an increase of 206.8% from RMB 139.6 million in the same quarter of 2020, mainly due to increased spending on sales and marketing expenses to acquire new customers. * General and administrative expenses were RMB 152.9 million (US$ 23.7 million), an increase of 78.0% from RMB 85.9 million in the same quarter of 2020, mainly due to the growth in business scale. * Product development expenses were RMB 257.3 million (US$ 39.9 million), an increase of 197.5% from RMB 86.5 million in the same quarter of 2020, mainly due to the increase in the spending on the Company's supply chain system to further improve efficiency and reduce operating costs, as well as the increase in spending on agricultural technology to empower upstream partners.

Loss from operations was RMB 2,018.9 million (US$ 313.3 million), compared with operating loss of RMB 843.9 million in the same quarter of 2020.

Net loss was RMB 2,010.6 million (US$ 312.0 million), compared with net loss of RMB 828.6 million in the same quarter of 2020.

Non-GAAP net loss, which is a non-GAAP measure that excludes share-based compensation expenses, was RMB 1,975.6 million (US$ 306.6 million), compared with non-GAAP net loss of RMB 826.8 million in the same quarter of 2020.

Basic and diluted net loss per sharewere RMB 6.19(US$ 0.96), compared with RMB 14.14 in the same quarter of 2020. Non-GAAP net loss per share, basic and diluted, was RMB 6.08 (US$ 0.94), compared with RMB 14.11 in the same quarter of 2020. The weighted average number of ordinary shares outstanding used to compute the basic and diluted net loss per share and non-GAAP net loss per share was 64,908,700 in the third quarter of 2020. All the then outstanding convertible redeemable preferred shares were not included in the computation until July 2021 when converted into ordinary shares after the Company's IPO.

Cash and cash equivalents and short-term investments were RMB 6,816.7 million (US$ 1,057.9 million) as of September 30, 2021, compared with RMB 2,382.4 million as of December 31, 2020.

Conference Call

The Company's management will hold an earnings conference call at 7:00 A.M. Eastern Time on Monday, November 15, 2021 (8:00 P.M. Beijing Time on the same day) to discuss the financial results. The presentation and question and answer session will be presented in both Mandarin and English. Listeners may access the call by dialing the following numbers:

International: 1-412-317-6061

United States Toll Free: 1-888-317-6003

Mainland China Toll Free: 4001-206115

Hong Kong Toll Free: 800-963976

Conference ID: 0648844

The replay will be accessible through November 22, 2021 by dialing the following numbers:

International: 1-412-317-0088

United States: 1-877-344-7529

Access Code: 10162000

A live and archived webcast of the conference call will also be available on the Company's investor relations website at https://ir.100.me.

About Dingdong (Cayman) Limited

Dingdong (Cayman) Limited is a leading and fastest-growing company in the domestic neighborhood retail industry in China providing users with fresh produce, meat and seafood, and other daily necessities through a convenient and excellent shopping experience supported by an extensive self-operated frontline fulfillment grid. From its core product category of fresh groceries, Dingdong has expanded to provide other daily necessities to grow into a leading one-stop online shopping destination in China for consumers to make purchases for their daily lives. At the same time, Dingdong is working to modernize China's traditional agricultural supply chain through standardization and digitalization, empowering upstream farms and suppliers to make their production more efficient and tailored to actual demand.

For more information, please visit: www.100.me.

Use of Non-GAAP Financial Measures

The Company uses non-GAAP measures, such as non-GAAP net loss, non-GAAP net loss attributable to ordinary shareholders and non-GAAP net loss per share, basic and diluted, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses, which are non-cash charges and do not correlate to any operating activity trends. The Company believes that the non-GAAP financial measures provide useful information about the Company's results of operations, enhance the overall understanding of the Company's past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools, and when assessing the Company's operating performance, cash flows or liquidity, investors should not consider them in isolation, or as a substitute for net loss, cash flows provided by operating activities or other consolidated statements of operations and cash flows data prepared in accordance with U.S. GAAP. The Company's definition of non-GAAP financial measures may differ from those of industry peers and may not be comparable with their non-GAAP financial measures.

The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company's performance.

For more information on the non-GAAP financial measures, please see the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this announcement.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB 6.4434 to US$ 1.00, the exchange rate on September 30, 2021 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

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," "aims," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continue," or other similar expressions. Among other things, the impact of COVID-19, outlook and quotations from management in this announcement, as well as Dingdong's strategic and operational plans, contain forward-looking statements. Dingdong may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its interim and annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Dingdong'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 impact of the COVID-19 pandemic on Dingdong's business, results of operations, financial condition, and stock price; Dingdong's strategies; Dingdong's future business development, financial condition and results of operations; Dingdong's ability to retain and increase the number of users, members and advertising customers, provide quality content, products and services, and expand its product and service offerings; competition in the online entertainment industry; Dingdong's ability to maintain its culture and brand image within its addressable user communities; Dingdong's ability to manage its costs and expenses; PRC governmental policies and regulations relating to the e-commerce industry, general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company's filings with the Securities and Exchange Commission. All information provided in this announcement and in the attachments is as of the date of the announcement, and the Company undertakes no duty to update such information, except as required under applicable law.

For investor inquiries, please contact:

Dingdong Fresh ir@100.me

DINGDONG (CAYMAN) LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of RMB and US$)

As of

December September September 31, 30, 30,

2020 2021 2021

RMB RMB US$

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents 1,376,153 3,097,640 480,746

Restricted cash 74,295 6,476 1,005

Short-term investments 1,006,245 3,719,019 577,183

Accounts receivable, net 38,805 154,127 23,920

Amounts due from related parties 10,100 - -

Inventories 386,431 648,861 100,702

Advance to suppliers 37,133 88,228 13,693

Prepayments and other current assets 97,878 370,591 57,514

Total current assets 3,027,040 8,084,942 1,254,763

Non-current assets:

Property and equipment, net 272,691 434,646 67,457

Operating lease right-of-use assets 1,503,222 2,040,602 316,696

Other non-current assets 121,459 184,310 28,604

Total non-current assets 1,897,372 2,659,558 412,757

TOTAL ASSETS 4,924,412 10,744,500 1,667,520

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' (DEFICIT) /EQUITY

Current liabilities:

Accounts payable 1,579,948 2,797,392 434,148

Customer advances and deferred revenue 140,404 226,796 35,198

Accrued expenses and other current liabilities 857,738 895,508 138,981

Salary and welfare payable 136,960 207,676 32,231

Operating lease liabilities 594,787 841,013 130,523

Short-term borrowings 1,234,522 2,718,474 421,901

Current portion of long-term borrowings 86,500 64,500 10,010

Warrant liabilities 108,160 - -

Total current liabilities 4,739,019 7,751,359 1,202,992

Non-current liabilities:

Long-term borrowings 58,375 9,500 1,474

Operating lease liabilities 871,685 1,115,372 173,103

Total non-current liabilities 930,060 1,124,872 174,577

TOTAL LIABILITIES 5,669,079 8,876,231 1,377,569

DINGDONG (CAYMAN) LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - (Continued)

(Amounts in thousands of RMB and US$)

As of

September September December 30, 31, 30, 2020 2021 2021

RMB RMB US$

(Unaudited)

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' (DEFICIT) /EQUITY (CONTINUED)

MEZZANINE EQUITY 5,174,910 - -

Shareholders' (deficit)/equity:

Ordinary shares 1 4 1

Additional paid-in capital 151,657 13,622,775 2,114,221

Accumulated deficit (6,048,274) (11,669,373) (1,811,058)

Accumulated other comprehensive loss (22,961) (85,137) (13,213)

TOTAL SHAREHOLDERS' (DEFICIT)/EQUITY (5,919,577) 1,868,269 289,951

TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' (DEFICIT) /EQUITY 4,924,412 10,744,500 1,667,520

DINGDONG (CAYMAN) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands of RMB and US$, except for number of shares and per sharedata)

For the three months ended September 30,

2020 2021 2021

RMB RMB US$

(Unaudited)

Revenues:

Product revenues 2,899,191 6,122,324 950,170

Service revenues 34,274 67,155 10,422

Total revenues 2,933,465 6,189,479 960,592

Operating costs and expenses:

Cost of goods sold (2,419,697) (5,061,160) (785,480)

Fulfillment expenses (1,045,648) (2,308,712) (358,307)

Sales and marketing expenses (139,640) (428,283) (66,468)

Product development expenses (86,536) (257,286) (39,930)

General and administrative expenses (85,855) (152,897) (23,729)

Total operating costs and expenses (3,777,376) (8,208,338) (1,273,914)

Loss from operations (843,911) (2,018,859) (313,322)

Interest income 4,800 14,130 2,193

Interest expenses (3,613) (24,640) (3,824)

Other income 27,796 25,770 3,999

Other expenses (924) (6,978) (1,083)

Changes in fair value of warrant liabilities (12,715) - -

Loss before income tax (828,567) (2,010,577) (312,037)

Income tax expenses - - -

Net loss (828,567) (2,010,577) (312,037)

Accretion of redeemable convertible preferred shares (89,016) - -

Net loss attributable to ordinary shareholders (917,583) (2,010,577) (312,037)

DINGDONG (CAYMAN) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands of RMB and US$, except for number of shares and per sharedata)

For the three months ended September 30,

2020 2021 2021

RMB RMB US$

(Unaudited)

Net loss per share:

Basic and diluted (14.14) (6.19) (0.96)

Weighted average common shares outstanding used in net loss per share 64,908,700 computation 324,709,928

Other comprehensive loss, net of tax ofnil:

Foreign currency translation adjustments (22,107) 19,172 2,976

Comprehensive loss (850,676) (1,991,405) (309,061)

Accretion of redeemable convertible (89,016) - -preferred shares

Comprehensive loss attributable to (939,692) (1,991,405) (309,061)ordinary shareholders

DINGDONG (CAYMAN) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands of RMB and US$)

For the three months ended September 30,

2020 2021 2021

RMB RMB US$

(Unaudited)

Net cash used in operating activities (614,615) (1,267,965) (196,785)

Net cash (used in)/provided by investing activities (642,030) 2,419,438 375,491

Net cash generated from financing activities 224,707 907,039 140,770

Effect of exchange rate changes on cash and cash equivalents and restricted (48,566) (6,368) (988) cash

Net (decrease)/increase in cash and cash equivalents and restricted cash (1,080,504) 2,052,144 318,488

Cash and cash equivalents and restricted cash at the beginning of the period 3,054,295 1,051,972 163,263

Cash and cash equivalents and restricted cash at the end of the period 1,973,791 3,104,116 481,751

DINGDONG (CAYMAN) LIMITED

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(Amounts in thousands of RMB and US$, except for number of shares and per sharedata)

For the three months ended September 30,

2020 2021 2021

RMB RMB US$

(Unaudited)

Net loss (828,567) (2,010,577) (312,037)

Add: share-based compensation expenses^ (1) 1,795 34,980 5,429

Non-GAAP net loss (826,772) (1,975,597) (306,608)

Net loss attributable to ordinary shareholders (917,583) (2,010,577) (312,037)

Add: share-based compensation expenses ^(1) 1,795 34,980 5,429

Non-GAAP net loss attributable to ordinary shareholders (915,788) (1,975,597) (306,608)

Net loss per share:

Basic and diluted (14.14) (6.19) (0.96)

Add: share-based compensation expenses 0.03 0.11 0.02

Non-GAAP net loss per share:

Basic and diluted (14.11) (6.08) (0.94)

(1) Share-based compensation expenses are recognized as follows:

For the three months ended September 30,

2020 2021 2021

RMB RMB US$

(Unaudited)

Fulfillment expenses 126 15,713 2,439

Sales and marketing expenses 173 240 37

Product development expenses 1,097 5,894 915

General and administrative expenses 399 13,133 2,038

Total 1,795 34,980 5,429

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SOURCE Dingdong (Cayman) Limited