PR Newswire | Nov 16, 2021 06:36PM EST

11/16 17:34 CST

BEST Inc. Announces Unaudited Third Quarter 2021 Financial Results HANGZHOU, China, Nov. 16, 2021

HANGZHOU, China, Nov. 16, 2021 /PRNewswire/ -- BEST Inc. (NYSE: BEST) ("BEST" or the "Company"), a leading integrated smart supply chain solutions and logistics services provider in China, today announced its unaudited financial results for the quarter ended September 30, 2021.

Johnny Chou, Founder, Chairman and Chief Executive Officer of BEST, commented, "In the third quarter, we remained steadfast in driving the Company's realignment around our core competencies and unlocking value for our shareholders. As we proceed with our transaction with J&T Express Co., Ltd. (J&T Express China), we are excited about our roadmap ahead to deliver integrated supply chain, freight and global logistics services for our customers."

"Against a challenging backdrop with COVID-19 flare ups, we continued to enhance Best Freight's business capabilities of serving e-commerce customers and leveraging synergies with our Supply Chain Management. Supply Chain Management further strengthened its operations by prioritizing higher margin customers, expanding the OFCs network and leveraging our technologies to deliver quality services. On the Global front, our cross-border and local business in the Southeast Asia region continued to press forward, achieving a 78.7% year-over-year increase in parcel volume for the quarter despite the ongoing pandemic."

"Looking forward, we will continue to synergize among our business units in a strategic, value-creating way and further enhance our integrated logistic service offerings to capture the enormous growth opportunities from e-commerce and the booming demand for integrated supply chain services."

Gloria Fan, BEST's Chief Financial Officer, added, "Revenue for the quarter was RMB6.8 billion, a decrease of 14.6% year over year, as market dynamics weighed on the volume and average selling price for Express and Freight. Our balance of cash and cash equivalents, restricted cash and short-term investments were RMB3.4 billion at the end of the third quarter of 2021. The strategic transaction with J&T Express China will significantly improve our liquidity and provide us with financial flexibility to reduce leverage and increase investments, laying a solid foundation for us to return to profitability and a growth trajectory."

FINANCIAL HIGHLIGHTS[1]

For the Quarter Ended September 30, 2021:

* Revenue was RMB6,812.4 million (US$1,057.3 million), a decrease of 14.6% year-over-year ("YoY"). The decrease was primarily due to a decrease in average selling price ("ASP") in Express and Freight business segments. * Gross Loss was RMB505.1 million (US$78.4 million), compared to gross loss of RMB58.5 million in the same period of 2020. Gross Loss Margin was 7.4%, decreased by 6.7 percentage points ("ppts") YoY. * Net Loss was RMB654.9 million (US$101.6 million), compared to a net loss of RMB565.9 million in the same period of 2020. Non-GAAP Net Loss[2] [3] was RMB684.2 million (US$106.2 million), compared to non-GAAP net loss of RMB541.9 million in the same period of 2020. * Diluted EPS[4] was negative RMB1.65 (US$0.26), compared to negative RMB1.45 in the same period of 2020. Non-GAAP Diluted EPS[3] [4] was negative RMB1.73 (US$0.27), compared to negative RMB1.39 in the same period of 2020. * EBITDA[5] was negative RMB451.8 million (US$70.1 million), compared to negative RMB392.6 million in the same period of 2020. Adjusted EBITDA[3][5] was negative RMB481.1 million (US$74.7 million), compared to negative RMB369.5 million in the same period of 2020.

BUSINESS HIGHLIGHTS[6]

BEST Express -During the quarter, parcel volume decreased by 10.9% YoY to 2.1 billion. Gross margin contracted by 7.6 ppts due to a decline in ASP per parcel of 12.0% YoY, partially offset by a decrease in average cost per parcel of 5.5% YoY despite higher oil prices and rising labor costs.

On October 29, 2021, the Company announced to sell its express delivery business in China (the "Business") to J&T Express China, at approximately RMB6.8 billion (US$1.1 billion) enterprise value. The sale does not include any of BEST's other businesses, namely, Supply Chain Management, Freight, UCargo and Global. The consideration to be paid for the Business is subject to certain adjustments and conditions under the terms of a definitive agreement entered into by the parties. This sale is subject to certain closing conditions and applicable regulatory approvals, and is currently expected to close in the first quarter of 2022.

BEST Freight - During the quarter, the Company continued its effort to grow its e-commerce related transactions. The e-commerce business accounted for 20.4% of total volume compared with 15.9% in the third quarter of 2020. Freight volume decreased by 1.5% YoY and its gross margin was negative 5.4% in the quarter; 6.7 ppts lower YoY primarily due to a 7.5% YoY decline in ASP, offset by a 1.3% YoY decrease in average cost per tonne.

BEST Supply Chain Management - Supply Chain Management remained focused on projects with higher margins and clients with strong credit profiles, while continuing to expand franchised cloud OFC network. The total number of orders fulfilled by Cloud OFCs increased by 1.4% YoY to 103.6 million in the third quarter of 2021, of which the total number of orders fulfilled by franchised Cloud OFCs increased by 27.1% YoY to 68.0 million. The number of franchised OFCs increased by 1.7% YoY to 351.

BEST Global -Global maintained its robust growth in Southeast Asia with improved margin. Despite the continued impact from COVID-19, parcel volume in Southeast Asia increased by 78.7% to 37.1 million in the third quarter of 2021, with growth rate of 123.0%, 933.2% and 264.5% YoY in Thailand, Malaysia and Cambodia respectively. Global's gross margin rose by 4.1 ppts YoY, primarily driven by our growing economies of scale.

Others-For UCargo, as of September 30, 2021, the number of registered drivers on the UCargo mobile app increased by 40.2% YoY to 404,336.

^[1] All numbers presented have been rounded to the nearest integer, tenth, orhundredth, and year-over-year comparisons are based on figures beforerounding.

^[2] Non-GAAP net income/loss represents net income/loss excluding share-basedcompensation expenses, amortization of intangible assets resulting frombusiness acquisitions, and fair value change of equity investments (if any).

^[3] See the sections entitled "Use of Non-GAAP Financial Measures" and"Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures"for more information about the non-GAAP measures referred to within thisresults announcement.

^[4] Diluted earnings per share, or Diluted EPS, is calculated by dividing netincome/loss attributable to ordinary shareholders as adjusted for the effect ofdilutive ordinary equivalent shares, if any, by the weighted average number ofordinary and dilutive ordinary equivalent shares outstanding during the period.

^[5] EBITDA represents net loss excluding depreciation, amortization, interestexpense and income tax expense and minus interest income. Adjusted EBITDArepresents EBITDA excluding share-based compensation expenses and fair valuechange of equity investments (if any).

^[6] All numbers presented have been rounded to the nearest integer, tenth, orhundredth, and year-over-year comparisons are based on figures beforerounding.

Key Operational Metrics

Three Months Ended % Change YoY

September September September 30, 2020 vs 2021 vs 30, 2019 30, 2020 2019 2020 2021

Express Parcel Volume (in '000) 1,890,842 2,359,773 2,103,200 24.8% -10.9%

Freight Volume (Tonne in '000) 1,885 2,464 2,427 30.7% -1.5%

Supply Chain Management 86,371 102,171 103,638 18.3% 1.4%Orders Fulfilled (in '000)

Global Parcel Volume in 2,607 20,754 37,082 696.0% 78.7%Southeast Asia (in '000)

UCargo Number of 170 233 218 37.2% -6.5%Transactions (in '000)

FINANCIAL RESULTS

For the Quarter Ended September 30, 2021:

Revenue

The following table sets forth a breakdown of revenue by business segment for the periods indicated.

Table 1- Breakdown of Revenue by Business Segment

Three Months Ended

September 30, 2020 September 30, 2021

(In '000, RMB % of Revenue RMB US$ % of % Changeexcept for %) Revenue YoY

Express 5,090,682 63.8% 3,988,291 618,973 58.5% (21.7 %)

Freight 1,492,965 18.7% 1,358,305 210,806 19.9% (9.0%)

Supply Chain 452,691 5.7% 400,551 62,165 5.9% (11.5 %)Management

Global 216,017 2.7% 298,267 46,290 4.4% 38.1%

Others^[7] 723,784 9.1% 766,969 119,032 11.3% 6.0%

Total Revenue 7,976,139 100.0% 6,812,383 1,057,266 100.0% (14.6%)

^[7] "Others" Segment represents UCargo and Capital business units.

* Express Service Revenue decreased by 21.7% YoY to RMB3,988.3 million (US$619.0 million) from RMB5,090.7 million, primarily due to a 12.0% YoY decrease in ASP per parcel and a 10.9% YoY decrease in parcel volume. The decreases were primarily attributable to competitive market dynamics. * Freight Service Revenue decreased by 9.0% YoY to RMB1,358.3 million (US$210.8 million) from RMB1,493.0 million, primarily due to a 7.5% decrease in ASP per tonne and a 1.5% YoY decrease in freight volume. * Supply Chain Management Service Revenue decreased by 11.5% YoY to RMB400.6 million (US$62.2 million) from RMB452.7 million, primarily due to discontinuation of service to certain low-margin legacy customers, partially offset by a 1.4% YoY increase in the total number of orders fulfilled by Cloud OFCs. * Global Service Revenue increased by 38.1% YoY to RMB298.3 million (US$46.3 million) from RMB216.0 million, primarily due to strong growth in parcel volumes in Southeast Asia. * Others Services Revenue increased by 6.0% YoY to RMB767.0 million (US$119.0 million) from RMB723.8 million.

Cost of Revenue

The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.

Table 2 - Breakdown of Cost of Revenue by Business Segment

Three Months Ended % of Revenue September 30, 2020 September 30, 2021 Change

(In '000, except for %) RMB % of RMB US$ % of YoY Revenue Revenue

Express (5,205,390) 102.3% (4,384,494) (680,463) 109.9% 7.6ppts

Freight (1,473,252) 98.7% (1,431,988) (222,241) 105.4% 6.7ppts

Supply Chain (432,945) 95.6% (385,443) (59,820) 96.2% 0.6pptsManagement

Global (239,653) 110.9% (318,420) (49,418) 106.8% (4.1ppts)

Others (683,361) 94.4% (797,136) (123,714) 103.9% 9.5ppts

Total Cost of Revenue (8,034,601) 100.7% (7,317,481) (1,135,656) 107.4% 6.7ppts

Cost of Revenue was RMB7,317.5 million (US$1,135.7 million) or 107.4% of revenue in the third quarter of 2021, compared to RMB8,034.6 million or 100.7% of revenue in the same quarter of 2020. The increase of 6.7 ppts in cost of revenue as a percentage of revenue was primarily attributable to a decrease in ASP which was partially offset by reduced unit cost for Express and Freight business units.

Table 3- Breakdown of Average Cost Per Parcel and Average Cost Per Tonne

Three Months Ended % Change

(in RMB) September 30, 2020 September 30, 2021 YoY

Express:

Average Cost Per Parcel 2.21 2.08 (5.5%)

Average Transportation Cost Per Parcel 0.65 0.59 (9.2%)

Average Labor Cost Per Parcel 0.18 0.21 16.7%

Average Lease Cost Per Parcel 0.10 0.11 10.0%

Average Other Cost Per Parcel 0.10 0.06 (40.0%)

Average Last-mile Cost Per Parcel 1.18 1.11 (5.9%)

Freight:

Average Cost Per Tonne 597.8 590.0 (1.3%)

Gross Losswas RMB505.1 million (US$78.4 million) in the third quarter of 2021, compared to gross loss of RMB58.5 million in the same period of 2020. Gross Loss Marginwas 7.4%.

Operating Expenses

The following table sets forth a breakdown of operating expenses and adjusted operating expenses by category for the periods indicated.

Table 4- Breakdown of Operating Expenses and Adjusted Operating Expenses by Category

Three Months Ended

September 30, 2020 September 30, 2021

% of % of Revenue(In '000, except for %) RMB % of Revenue RMB US$ Revenue Change YoY

Selling, General and (453,463) 5.7% (423,424) (65,714) 6.2% 0.5ppts Administrative Expenses

Adjusted for (30,145) 0.4% (26,984) (4,188) 0.4% 0.0ppts SBC Expenses

Adjusted Selling, General and Administrative (423,318) 5.3% (396,440) (61,526) 5.8% 0.5ppts Expenses

Research and Development (44,935) 0.5% (61,159) (9,492) 0.9% 0.4ppts Expenses

Adjusted for SBC Expenses (2,135) 0.0% (2,056) (319) 0.0% 0.0ppts

Adjusted Research and (42,800) 0.5% (59,103) (9,173) 0.9% 0.4ppts Development Expenses

Total Operating Expenses (498,398) 6.2% (484,583) (75,206) 7.1% 0.9ppts

Adjusted for SBC (32,280) 0.4% (29,040) (4,507) 0.4% 0.0ppts Expenses

Adjusted Total Operating (466,118) 5.8% (455,543) (70,699) 6.7% 0.9ppts Expenses

Selling, General and Administrative ("SG&A") Expenses were RMB423.4 million (US$65.7 million) or 6.2% of revenue in the third quarter of 2021, compared to RMB453.5million or 5.7% of revenue in the same quarter of 2020.

Research and Development ("R&D") Expenses were RMB61.2 million (US$9.5 million) or 0.9% of revenue in the third quarter of 2021, compared to RMB44.9 million, or 0.5% of revenue in the same quarter of 2020. The increase in research and development expenses was due to increased employee compensation and benefits.

Share-based Compensation ("SBC") Expenses included in the cost and expense items above in the third quarter of 2021 were RMB29.4 million (US$4.6 million), compared to RMB32.9 million in the same quarter of 2020. In the third quarter of 2021, RMB0.3 million (US$0.05 million) was allocated to cost of revenue, RMB1.9 million (US$0.3 million) was allocated to selling expenses, RMB25.1 million (US$3.9 million) was allocated to general and administrative expenses, and RMB2.1 million (US$0.3 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss

Net Lossin the third quarter of 2021 was RMB654.9 million (US$101.6 million), compared to a net loss of RMB565.9 million in the same period of 2020. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Net Loss in the third quarter of 2021 was RMB684.2 million (US$106.2 million), compared to non-GAAP net loss of RMB541.9 million in the same period of 2020.

The following table sets forth a breakdown of non-GAAP net (loss)/income for the three months ended September 30, 2021 by segment.

Table 5-Breakdown of non-GAAP Net (Loss)/Income by Segment

Three Months Ended September 30, 2021

(In RMB'000) Express Freight Supply Chain Global Others Unallocated^[8] Total

Non-GAAP Net Income/(Loss) (471,332) (157,155) (24,909) (66,801) (84,104) 120,150 (684,151)

^[8] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Diluted EPS and Non-GAAP Diluted EPS

Diluted EPS in the third quarter of 2021 was negative RMB1.65(US$0.26), based on a weighted average of 388.5 million diluted shares outstanding during the quarter. This is compared to negative RMB1.45 on a weighted average of 385.4 million diluted shares outstanding in the same period of 2020. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Diluted EPS in the third quarter of 2021 was negative RMB1.73(US$0.27), compared to negative RMB1.39 in the same period of 2020. A reconciliation of non-GAAP diluted EPS to diluted EPS is included at the end of this results announcement.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDAin the third quarter of 2021 was negative RMB481.1million (US$74.7 million), compared to negative RMB369.5 million in same quarter of 2020. Adjusted EBITDA Margin was negative 7.1% in the third quarter of 2021, compared to negative 4.6% in the same quarter of 2020.

Adjusted EBITDA and Adjusted EBITDA Margin by Segment

The following table sets forth a breakdown of adjusted EBITDA and adjusted EBITDA margin for the three months ended September 30, 2021 by segment.

Table6-Breakdown of Adjusted EBITDA and Adjusted EBITDA Margin by Segment

Three Months Ended September 30, 2021

(In RMB'000) Express Freight Supply Chain Global Others Unallocated^^[9] Total

Adjusted EBITDA (348,474) (140,422) (15,984) (61,820) (78,491) 164,055 (481,136)

Adjusted EBITDA Margin (8.7%) (10.3%) (4.0%) (20.7%) (10.2%) - (7.1%)

^[9] Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

Cash and Cash Equivalents, Restricted Cash and Short-term Investments

As of September 30, 2021, cash and cash equivalents, restricted cash and short-term investments were RMB3,378.3 million (US$524.3 million), compared to RMB3,413.3 million as of June 30, 2021. The decrease in cash and cash equivalents, restricted cash and short-term investments was primarily due to net cash used in operations.

Net Cash Used in Operating Activities

Net cash used in continuing operating activities was RMB1,157.2 million (US$179.6 million), compared to net cash generated from continuing operating activities of RMB140.9 million in the same period of 2020, mainly due to decreased ASP for Express and Freight business segments.

Capital Expenditures ("CAPEX")

CAPEX was RMB116.9 million (US$18.1million), or 1.7% of total revenue in the third quarter ended September 30, 2021, compared to CAPEX of RMB484.3 million, or 6.1% of total revenue, in the same period of 2020.

SHARES OUTSTANDING

As of the date of this press release, the Company had approximately 388.7 million ordinary shares outstanding[10]. Each American Depositary Share represents one Class A ordinary share.

^[10] The total number of shares outstanding excludes shares reserved forfuture issuances upon exercise or vesting of awards granted under the Company'sshare incentive plans.

FINANCIAL GUIDANCE

Based on current market conditions and operations, the Company expects its revenue for the full fiscal year of 2021 to be between RMB28 billion and RMB32 billion. This forecast reflects management's current and preliminary expectation, which is subject to change.

WEBCAST AND CONFERENCE CALL INFORMATION

The Company will hold a conference call at 8:00 pm U.S. Eastern Time on November 16, 2021 (9:00 am Beijing Time on November 17, 2021), to discuss its financial results and operating performance for the third quarter of 2021.

Participants may access the call by dialing the following numbers:

United States: +1-888-317-6003

Hong Kong: 800-963976 or +852-5808-1995

Mainland China: 4001-206115

International: +1-412-317-6061

Participant Elite Entry Number:4267111

A replay of the conference call will be accessible through November 23, 2021 by dialing the following numbers:

United States: +1-877-344-7529

International: +1-412-317-0088

Replay Access Code:10161418

Please visit the Company's investor relations website, located at http://ir.best-inc.com/, to view the earnings release prior to the conference call. A live and archived webcast of the conference call and a corporate presentation will be available at the same site.

ABOUT BEST INC.

BEST Inc. (NYSE: BEST) is a leading integrated smart supply chain solutions and logistics services provider in China. Through its proprietary technology platform and extensive networks, BEST offers a comprehensive set of logistics and value-add services, including express and freight delivery, supply chain management and last-mile services, truckload service brokerage, international logistics and financial services. BEST's mission is to empower business and enrich life by leveraging technology and business model innovation to create a smarter, more efficient supply chain. For more information, please visit: http://www.best-inc.com/en/.

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" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as BEST's strategic and operational plans, contain forward-looking statements. BEST may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), 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. Statements that are not historical facts, including statements about BEST'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: BEST's goals and strategies; BEST's future business development, results of operations and financial condition; BEST 's ability to maintain and enhance its ecosystem; BEST 's ability to compete effectively; BEST 's ability to continue to innovate, meet evolving market trends, adapt to changing customer demands and maintain its culture of innovation; fluctuations in general economic and business conditions in China and other countries in which BEST operates, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in BEST's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and BEST does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

USE OF NON-GAAP FINANCIAL MEASURES

In evaluating its business, BEST considers and uses non-GAAP measures, such as non-GAAP net loss/income, non-GAAP net loss/income margin, adjusted EBITDA, adjusted EBITDA margin, EBITDA, adjusted selling expenses, adjusted general and administrative expenses, adjusted research and development expenses, and non-GAAP diluted EPS, as supplemental measures in the evaluation of the Company's operating results and in the Company's financial and operational decision-making. The Company believes these non-GAAP financial measures that help identify underlying trends in the Company's business that could otherwise be distorted by the effect of the expenses and gains that the Company includes in loss from operations and net loss. The Company believes that these non-GAAP financial measures provide useful information about its operating results, enhance the overall understanding of its 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 presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" in the results announcement.

The non-GAAP financial measures are provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the Company's current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S. GAAP results. In addition, the Company's calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Summary of Unaudited Condensed Consolidated Income Statements

(In Thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2020 2021 2020 2021

RMB RMB US$ RMB RMB US$

Revenue

Express 5,090,682 3,988,291 618,973 13,631,990 11,982,738 1,859,692

Freight 1,492,965 1,358,305 210,806 3,551,074 3,931,359 610,137

Supply Chain Management 452,691 400,551 62,165 1,369,991 1,327,767 206,066

Global 216,017 298,267 46,290 524,305 863,291 133,981

Others 723,784 766,969 119,032 1,662,310 2,578,565 400,187

Total Revenue 7,976,139 6,812,383 1,057,266 20,739,670 20,683,720 3,210,063

Cost of Revenue

Express (5,205,390) (4,384,494) (680,463) (13,570,902) (12,854,832) (1,995,039)

Freight (1,473,252) (1,431,988) (222,241) (3,532,534) (3,971,496) (616,367)

Supply Chain Management (432,945) (385,443) (59,820) (1,297,689) (1,245,479) (193,295)

Global (239,653) (318,420) (49,418) (602,511) (912,119) (141,559)

Others (683,361) (797,136) (123,714) (1,547,948) (2,542,866) (394,647)

Total Cost of Revenue (8,034,601) (7,317,481) (1,135,656) (20,551,584) (21,526,792) (3,340,907)

Gross (Loss)/ Profit (58,462) (505,098) (78,390) 188,086 (843,072) (130,844)

Selling Expenses (120,783) (119,255) (18,508) (352,935) (340,702) (52,876)

General and Administrative (332,680) (304,169) (47,206) (888,483) (957,807) (148,649) Expenses

Research and Development (44,935) (61,159) (9,492) (137,629) (175,798) (27,283) Expenses

Total Operating Expenses (498,398) (484,583) (75,206) (1,379,047) (1,474,307) (228,808)

Loss from Operations (556,860) (989,681) (153,596) (1,190,961) (2,317,379) (359,652)

Interest Income 18,106 11,188 1,736 58,106 44,736 6,943

Interest Expense (46,583) (48,731) (7,563) (121,134) (142,903) (22,178)

Foreign Exchange (7,577) 1,081 168 (7,335) 653 101 (Loss)/Gain

Other Income 40,211 391,630 60,780 109,430 738,181 114,564

Other Expense (6,187) (19,280) (2,992) (22,269) (47,355) (7,349)

Loss before Income Tax and Share of Net Loss (558,890) (653,793) (101,467) (1,174,163) (1,724,067) (267,571) of Equity Investees

Income Tax Expense (6,997) (1,051) (163) (15,856) (2,698) (419)

Loss before Share of Net (565,887) (654,844) (101,630) (1,190,019) (1,726,765) (267,990) loss of Equity Investees

Share of Net Loss of Equity (40) (16) (2) (114) (58) (9) Investees

Net Loss from continuing (565,927) (654,860) (101,632) (1,190,133) (1,726,823) (267,999) operations

Net (loss)/income from (73,582) 4,025 624 (231,027) (8,804) (1,365) discontinued operations

Net Loss (639,509) (650,835) (101,008) (1,421,160) (1,735,627) (269,364)

Net Loss from continuing operations attributable to (5,959) (12,623) (1,959) (20,390) (23,552) (3,655) non-controlling interests

Net Loss attributable to (633,550) (638,212) (99,049) (1,400,770) (1,712,075) (265,709) Best Inc.

Summary of Unaudited Condensed Consolidated Balance Sheets

(In Thousands)

As of December 31, 2020 As of September 30, 2021

RMB RMB US$

Assets

Current Assets

Cash and Cash Equivalents 1,383,317 966,026 149,925

Restricted Cash 2,102,426 1,902,703 295,295

Accounts and Notes Receivables 983,601 903,947 140,290

Inventories 44,133 33,963 5,271

Prepayments and Other Current 3,304,670 3,246,803 503,896Assets

Short-term Investments 268,647 3,233 502

Amounts Due from Related Parties 274,395 146,798 22,783

Lease Rental Receivables 497,127 378,811 58,791

Assets held for sale 509,395 496,811 77,104

Total Current Assets 9,367,711 8,079,095 1,253,857

Non-current Assets

Property and Equipment, Net 4,079,235 4,314,550 669,608

Intangible Assets, Net 12,198 10,217 1,586

Long-term Investments 221,426 174,171 27,031

Goodwill 295,758 295,758 45,901

Non-current Deposits 129,645 130,987 20,329

Other Non-current Assets 543,949 249,748 38,760

Restricted Cash 709,848 506,317 78,579

Lease Rental Receivables 647,678 311,006 48,267

Operating Lease Right-of-use Assets 3,863,375 3,726,884 578,403

Total non-current Assets 10,503,112 9,719,638 1,508,464

Total Assets 19,870,823 17,798,733 2,762,321

Liabilities and Shareholders' Equity

Current Liabilities

Securitization Debt 95,149 168,312 26,122

Secured Borrowings - 171,658 26,641

Convertible Senior Notes held by - 642,825 99,765related parties

Convertible Senior Notes held by third - 642,825 99,765parties

Short-term Bank Loans 3,082,537 1,728,990 268,335

Accounts and Notes Payable 4,144,948 3,840,533 596,041

Income Tax Payable 14,550 1,029 160

Customer Advances and Deposits and 1,526,051 1,402,773 217,707 Deferred Revenue

Accrued Expenses and Other 2,507,917 2,908,613 451,410Liabilities

Financing Lease Liabilities 1,581 1,374 213

Operating Lease Liabilities 1,032,461 1,079,335 167,510

Amounts Due to Related Parties 35,623 619,616 96,163

Liabilities held for sale 193,432 205,754 31,933

Total Current Liabilities 12,634,249 13,413,637 2,081,765

Summary of Unaudited Condensed Consolidated Balance Sheets (Cont'd)

(In Thousands)

As of December 31, 2020 As of September 30, 2021

RMB RMB US$

Non-current Liabilities

Convertible Senior Notes held by 1,617,846 971,042 150,703 related parties

Secured Borrowings - 109,466 16,989

Convertible Senior Notes held by third 642,121 - - parties

Operating Lease Liabilities 2,995,173 2,850,987 442,466

Financing Lease Liabilities 2,698 1,695 263

Other Non-current Liabilities 175,584 121,353 18,834

Long-term Bank Loans 78,548 75,918 11,782

Total Non-current Liabilities 5,511,970 4,130,461 641,037

Total Liabilities 18,146,219 17,544,098 2,722,802

Mezzanine Equity:

Convertible Non-controlling Interests - 184,421 28,622

Total mezzanine equity - 184,421 28,622

Shareholders' Equity

Ordinary Shares 25,988 25,988 4,033

Treasury Shares (211,352) (126,190) (19,584)

Additional Paid-In Capital 19,487,232 19,490,101 3,024,816

Statutory Reserves 8,038 5,103 792

Accumulated Deficit (17,710,964) (19,420,104)^[11] (3,013,953)

Accumulated Other 151,677 135,637 21,051 Comprehensive Income

BEST Inc. Shareholders' Equity 1,750,619 110,535 17,155

Non-controlling Interests (26,015) (40,321) (6,258)

Total Shareholders' Equity 1,724,604 70,214 10,897

Total Liabilities, Mezzanine Equity 19,870,823 17,798,733 2,762,321 and Shareholders' Equity

^[11] Including accumulated accretion to redemption value and deemed dividendin relation to redeemable convertible preferred shares of RMB9,493,807, andaccumulated loss from operations of RMB9,926,297

Summary of Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)



Three Months Ended September 30, Nine Months Ended September 30,

2020 2021 2020 2021

RMB RMB US$ RMB RMB US$

Net cash generated from/(used in) 140,915 (1,157,227) (179,599) (335,749) (1,848,381) (286,864) continuing operating activities

Net cash used in discontinued (25,564) (1,019) (158) (119,807) (59,408) (9,220) operating activities

Net cash generated from/(used in) 115,351 (1,158,246) (179,757) (455,556) (1,907,789) (296,084) operating activities

Net cash (used in)/generated from (540,706) 1,054,911 163,720 (709,472) 1,403,281 217,786 continuing investing activities

Net cash generated from/(used in) 1,047 - - 646 (217) (34) discontinued Investing activities

Net cash (used in) /generated (539,659) 1,054,911 163,720 (708,826) 1,403,064 217,752 from investing activities

Net cash generated from/(used in) 421,217 59,389 9,217 1,933,283 (18,525) (2,875) continuing financing activities

Net cash used in discontinued (50,000) - - (195,000) (280,000) (43,455) financing activities

Net cash generated from /(used 371,217 59,389 9,217 1,738,283 (298,525) (46,330) in) financing activities

Exchange Rate Effect on Cash, Cash Equivalents, and Restricted (106,521) 3,895 604 (81,332) (26,520) (4,116) Cash

Net (decrease)/increase in Cash and Cash Equivalents, and (159,612) (40,051) (6,216) 492,569 (829,770) (128,778) Restricted Cash

Cash and Cash Equivalents, and Restricted Cash at Beginning of 4,609,396 3,419,402 530,683 3,957,215 4,209,121 653,245 Period

Cash and Cash Equivalents, and Restricted Cash at End of 4,449,784 3,379,351 524,467 4,449,784 3,379,351 524,467 Period

Less: Cash and Cash Equivalents, and Restricted Cash held for 1,404 4,305 668 1,404 4,305 668 sales at end of the Period

Cash and Cash Equivalents, and Restricted Cash from 4,448,380 3,375,046 523,799 4,448,380 3,375,046 523,799 continuing operations at End of Period

RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

The table below sets forth a reconciliation of the Company's net (loss)/income to EBITDA, adjusted EBITDA and adjusted EBITDA margin for the periods indicated:

Table 7 -Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

Three Months Ended September 30, 2021

(In RMB'000) Express Freight Supply Chain Global Others Unallocated^^[12] Total

Net (Loss)/Profit (473,788) (160,060) (27,069) (68,869) (84,829) 159,755 (654,860)

Add:

Depreciation & 122,858 16,733 9,055 4,981 4,431 6,363 164,421Amortization

Interest Expense - - - - - 48,731 48,731

Income Tax - - (130) - 1,182 (1) 1,051(Benefit)/Expense

Subtract:

Interest Income - - - - - (11,188) (11,188)

EBITDA (350,930) (143,327) (18,144) (63,888) (79,216) 203,660 (451,845)

Add:

Share-based Compensation 2,456 2,905 2,160 2,068 725 19,038 29,352 Expenses

Subtract:

Gain fromappreciation of - - - - - (58,643) (58,643)investments

Adjusted EBITDA (348,474) (140,422) (15,984) (61,820) (78,491) 164,055 (481,136)

Adjusted EBITDA (8.7%) (10.3%) (4.0%) (20.7%) (10.2%) - (7.1%)Margin

Three Months Ended September 30, 2020

(In RMB'000) Express Freight Supply Chain Global Others Unallocated^^[13] Total

Net Loss (291,365) (56,027) (39,729) (66,984) (35,077) (76,745) (565,927)

Add:

Depreciation & 98,294 16,357 10,120 4,320 1,773 7,005 137,869Amortization

Interest Expense - - - - - 46,583 46,583

Income Tax 1,616 - - (273) 5,654 - 6,997Expense/(Benefit)

Subtract:

Interest Income - - - - - (18,106) (18,106)

EBITDA (191,455) (39,670) (29,609) (62,937) (27,650) (41,263) (392,584)

Add:

Share-based Compensation 3,712 2,702 2,948 2,238 935 20,374 32,909 Expenses

Subtract:

Gain fromappreciation of - - - - - (9,838) (9,838)investments

Adjusted EBITDA (187,743) (36,968) (26,661) (60,699) (26,715) (30,727) (369,513)

Adjusted EBITDA (3.7%) (2.5%) (5.9%) (28.1%) (3.7%) - (4.6%)Margin

^[12] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

^[13] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

The table below sets forth a reconciliation of the Company's net (loss)/income to non-GAAP net (loss)/income, non-GAAP net (loss)/income margin for the periods indicated:

Table 8 -Reconciliation of Non-GAAP Net (Loss)/Income and Non-GAAP Net (Loss)/Income Margin

Three Months Ended September 30, 2021

(In RMB'000) Express Freight Supply Chain Global Others Unallocated^^[14] Total

Net (Loss)/Profit (473,788) (160,060) (27,069) (68,869) (84,829) 159,755 (654,860)

Add:

Share-based Compensation 2,456 2,905 2,160 2,068 725 19,038 29,352 Expenses

Subtract:

Gain fromappreciation of - - - - - (58,643) (58,643)investments

Non-GAAP Net (471,332) (157,155) (24,909) (66,801) (84,104) 120,150 (684,151)(Loss)/Profit

Non-GAAP Net(Loss)/Profit (11.8%) (11.6%) (6.2%) (22.4%) (11.0%) - (10.0%)

Margin

Three Months Ended September 30, 2020

(In RMB'000) Express Freight Supply Chain Global Others Unallocated^^[15] Total

Net Profit/(Loss) (291,365) (56,027) (39,729) (66,984) (35,077) (76,745) (565,927)

Add:

Share-based Compensation 3,712 2,702 2,948 2,238 935 20,374 32,909 Expenses

Amortization of Intangible Assets - - - 916 - - 916 Resulting from Business

Subtract:

Gain fromappreciation of - - - - - (9,838) (9,838)investments

Non-GAAP Net (287,653) (53,325) (36,781) (63,830) (34,142) (66,209) (541,940)Profit/(Loss)

Non-GAAP NetProfit/(Loss) (5.7%) (3.6%) (8.1%) (29.5%) (4.7%) - (6.8%)

Margin

^[14] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

^[15] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

The table below sets forth a reconciliation of the Company's Diluted EPS to non-GAAP Diluted EPS for the periods indicated:

Table 9 - Reconciliation of Diluted EPS and Non-GAAP Diluted EPS

Three Months Ended September 30, Nine Months Ended September 30,

2021 2021

(In '000) RMB US$ RMB US$

Net Loss Attributable to Ordinary (642,237) (99,673) (1,703,271) (264,344) Shareholders

Add:

Share-based Compensation 29,352 4,556 90,052 13,976 Expenses

Subtract:

Gain from appreciation of (58,643) (9,101) (64,205) (9,964) investments

Non-GAAP Net Loss Attributable to Ordinary Shareholders for (671,528) (104,218) (1,677,424) (260,332) Computing Non-GAAP Diluted EPS

Weighted Average Diluted Shares Outstanding During the Period

Diluted 388,538,709 388,538,709 387,814,480 387,814,480

Diluted (Non-GAAP) 388,538,709 388,538,709 387,814,480 387,814,480

Diluted EPS (1.65) (0.26) (4.39) (0.68)

Add:

Non-GAAP adjustment to net (0.08) (0.01) 0.06 0.01 loss per share

Non-GAAP Diluted EPS (1.73) (0.27) (4.33) (0.67)

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SOURCE BEST Inc.