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NIO Inc. Reports Unaudited Third Quarter 2018 Financial Results

November 6, 2018 4:28 AM

Quarterly Total Revenues reached RMB1,469.6 million (US$214.0 million)(1)Quarterly Deliveries of the ES8 reached 3,268 vehicles

SHANGHAI, China, Nov. 06, 2018 (GLOBE NEWSWIRE) -- NIO Inc. (“NIO” or the “Company”) (NYSE: NIO), a pioneer in China’s premium electric vehicle market, today announced its unaudited financial results for the quarter ended September 30, 2018.

Financial Highlights for the Third Quarter of 2018

(1) All translations from RMB to USD were made at the rate of RMB6.8680 to US$1.00, the noon buying rate in effect on September 28, 2018 in the H.10 statistical release of the Federal Reserve Board.(2) See "Reconciliation of GAAP and Non-GAAP Results" included in the accompanying tables of this release for further details.(3) Each ADS represents one ordinary share.

Key Financial Results
(in RMB million, 2018 2017 % Change
except for per ordinary share data and percentage) Q3 2018Q2 2018 Q3 2017 QoQYoY
Total Revenue 1,469.646.0 - 3095.3%-
Gross Margin -7.9%-333.1% - 97.6%-
Loss from Operations (2,809.9)(1,875.0) (1,287.9) 49.9%118.2%
Adjusted Loss from Operations (non-GAAP) (2,377.7)(1,811.5) (1,270.4) 31.3%87.2%
Net Loss (2,810.4)(1,794.5) (1,300.7) 56.6%116.1%
Adjusted Net Loss (non-GAAP) (2,378.2)(1,731.1) (1,283.3) 37.4%85.3%
Net Loss Attributable to Ordinary Shareholders (9,756.8)(6,110.6) (1,648.5) 59.7%491.9%
Net Loss per ordinary share-Basic and Diluted (42.59)(204.93) (75.47) -79.2%-43.6%
Adjusted Net Loss per ordinary share-Basic and Diluted (non-GAAP) (10.35)(57.82) (58.52) -82.1%-82.3%

Operating Highlights for the Third Quarter of 2018

(4) NIO started deliveries of ES8 on June 28, 2018. Deliveries for the second quarter of 2018 represent the 3-day period from June 28 to June 30, 2018.

Key Operating Results
2018 % Change
Q3 2018Q2 2018 QoQ
Production
ES8 4,206500 741.2%
Deliveries
ES8 3,268100 3,168.0%

Recent Developments

CEO and CFO Comments

“The third quarter 2018 marked multiple milestones for NIO in the journey to achieve our ‘blue sky coming’ vision,” said William Li, Founder, Chairman and Chief Executive Officer of NIO Inc. “We completed our first full quarter of production and delivery of the ES8 and successfully executed the Company’s initial public offering on the New York Stock Exchange.”

Mr. Li continued, “We have delivered 4,941 ES8s to users in over 170 cities in China by the end of October 2018. NIO Power has successfully supported initial needs of ES8 users and NIO Service has exceeded expectations. We have been receiving valuable feedback from the NIO community, represented by increasing active users of NIO APP, and the NIO brand is gaining acceptance as a premium brand. Our focus remains resolute to deliver vehicles with the highest quality, to improve the holistic experience and to prepare for the launch of the ES6, the Company’s five-seater electric SUV. ”

Louis T. Hsieh, NIO’s Chief Financial Officer, added “We delivered solid results in the third quarter of 2018 as production accelerated and we began generating meaningful revenue of over RMB1.4 billion. We now have 12 NIO Houses and 9 pop-up NIO Houses across 19 major cities in China. Our ES8 order pipeline continues to grow and production is on track, giving us confidence in our ability to meet our delivery goal of 10,000 ES8s by the end of 2018.”

Financial Results for the Third Quarter of 2018

Revenues

Cost of Sales and Gross Margin

Operating Expenses

Operating Income/Loss and Operating Margin

Share-based Compensation Expenses

Net Income/Loss and Earnings Per Share

Balance Sheets

Business Outlook

For the fourth quarter of 2018, the Company expects:

This business outlook reflects the Company’s current and preliminary view on the business situation and market condition, which is subject to change.

Conference Call

Management will hold a conference call at 8:00 a.m. Eastern Time on Tuesday, November 6, 2018 (9:00 p.m. Beijing Time on November 6, 2018) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

United States:+1-845-675-0437
International:+65-6713-5090
Hong Kong:+852-3018-6771
Conference ID:7667738

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.nio.com.

A replay of the conference call will be accessible by phone approximately two hours after the conclusion of the live call at the following numbers, until November 14, 2018 07:59 a.m. ET:

United States:+1-646-254-3697
International:+61-2-8199-0299
Hong Kong:+852-3051-2780
Conference ID:7667738

About NIO Inc.

NIO Inc. is a pioneer in China’s premium electric vehicle market, founded in November 2014. NIO’s mission is to shape a joyful lifestyle by offering premium smart electric vehicles and being the best user enterprise. NIO designs, jointly manufactures, and sells smart and connected premium electric vehicles, driving innovations in next generation technologies in connectivity, autonomous driving and artificial intelligence. Redefining the user experience, NIO provides users with comprehensive, convenient and innovative charging solutions and other user-centric services. NIO began deliveries of the ES8, a 7-seater high performance electric SUV in China from June 2018 and plans to launch ES6, a 5-seater electric SUV in late 2018.

Safe Harbor Statement

This press release contains statements that may constitute “forward-looking” statements pursuant to 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,” “likely to” and similar statements. Among other things, the Business Outlook and quotations from management in this announcement, as well as NIO’s strategic and operational plans, contain forward-looking statements. NIO 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. Statements that are not historical facts, including statements about NIO’s beliefs, plans 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: NIO’s strategies; NIO’s future business development, financial condition and results of operations; NIO’s ability to develop and manufacture a car of sufficient quality and appeal to customers on schedule and on a large scale; its ability to grow manufacturing in collaboration with partners; its ability to provide convenient charging solutions to our customers; its ability to satisfy the mandated safety standards relating to motor vehicles; its ability to secure supply of raw materials or other components used in our vehicles; its ability to secure sufficient reservations and sales of the ES8; its ability to control costs associated with our operations; its ability to build our NIO brand; 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 NIO’s filings with the SEC. All information provided in this press release is as of the date of this press release, and NIO does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Non-GAAP Disclosure

The Company uses non-GAAP measures, such as non-GAAP cost of sales, non-GAAP operating expenses, non-GAAP loss from operations, non-GAAP net loss attributable to ordinary shareholders, non-GAAP basic loss per weighted average number of ordinary shares and non-GAAP basic loss per ADS, in evaluating its operating results and for financial and operational decision-making purposes. By excluding the impact of share-based compensation expenses, accretion on convertible redeemable preferred shares to redemption value and accretion on redeemable non-controlling interests to redemption value, the Company believes that the non-GAAP financial measures help identify underlying trends in its business and enhance the overall understanding of the Company’s past performance and future prospects. The Company also believes that the non-GAAP financial measures 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 presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measures have limitations as analytical tools and when assessing the Company’s operating performance, investors should not consider them in isolation, or as a substitute for net loss or other consolidated statements of comprehensive loss data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

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 “Reconciliation of GAAP and non-GAAP Results” set forth at the end of this press release.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.8680 to US$1.00, the noon buying rate in effect on September 28, 2018 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all.

Statement Regarding Preliminary Unaudited Financial Information

The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company’s year-end audit, which could result in significant differences from this preliminary unaudited financial information.

For more information, please visit: http://ir.nio.com

Contacts:

NIO Inc.Jade WeiTel: +86-21-6908-3681Email: [email protected]

Heather DiwuTel: +86-10-5687-4108Email: [email protected]

The Piacente Group, Inc.Brandi PiacenteTel: +1-212-481-2050Email: [email protected]

Ross WarnerTel: +86-10-5730-6201Email: [email protected]

Source: NIO

NIO Inc.
Consolidated Balance Sheets
Amounts expressed in Renminbi ("RMB"), unless otherwise stated
(in thousands, except for share and per share data)
December 31, 2017 September 30, 2018 September 30, 2018
(audited) (unaudited) (unaudited)
(USD)
ASSETS
Current assets:
Cash and cash equivalents7,505,954 6,743,487 981,871
Restricted cash10,606 32,536 4,737
Short-term investment- 2,377,384 346,154
Trade receivable- 248,873 36,237
Amount due from related parties29,556 35,303 5,140
Inventory89,464 1,361,434 198,229
Prepayments and other current assets674,425 1,505,378 219,187
Total current assets 8,310,005 12,304,395 1,791,555
Non-current assets:
Long-term restricted cash14,293 37,825 5,507
Property, plant and equipment, net1,911,013 3,821,209 556,379
Intangible assets, net4,457 3,988 581
Land use rights, net- 219,969 32,028
Long-term investments47,125 139,083 20,251
Amounts due from related parties50,000 53,821 7,836
Other non-current assets131,141 439,025 63,923
Total non-current assets 2,158,029 4,714,920 686,505
Total assets 10,468,034 17,019,315 2,478,060
LIABILITIES
Current liabilities:
Short-term borrowings28,787 430,583 62,694
Trade payable234,011 1,786,727 260,152
Amount due to related parties40,069 189,773 27,631
Taxes payable30,055 40,543 5,903
Current portion of long-term borrowings- 168,940 24,598
Accurals and other liabilities1,285,592 2,184,032 318,000
Total current liabilities 1,618,514 4,800,598 698,978
Non-current liabilities:
Long-term borrowings642,401 1,079,202 157,135
Other non-current liabilities141,113 681,043 99,164
Total non-current liabilities 783,514 1,760,245 256,299
Total liabilities2,402,028 6,560,843 955,277
MEZZANINE EQUITY
Convertible redeemable preferred shares19,657,786 - -
Redeemable non-controlling interests- 1,296,299 188,745
Total mezzanine equity 19,657,786 1,296,299 188,745
SHAREHOLDERS’ DEFICIT
Ordinary shares60 1,767 257
Treasury shares(9,186) (9,186) (1,338)
Additional paid in capital131,907 40,762,274 5,935,101
Accumulated other comprehensive loss(13,922) (71,888) (10,467)
Accumulated deficit(11,711,948) (31,523,325) (4,589,884)
Total NIO Inc. shareholders’ (deficit)/equity (11,603,089) 9,159,642 1,333,669
Non-controlling interests11,309 2,531 369
Total shareholders’ (deficit)/equity (11,591,780) 9,162,173 1,334,038
Total liabilities, mezzanine equity and shareholders' equity 10,468,034 17,019,315 2,478,060
Note: All translations from RMB to USD were made at the rate of RMB6.8680 to US$1.00, the noon buying rate in effect on September 28, 2018 in the H.10 statistical release of the Federal Reserve Board.

NIO Inc.
Consolidated Statements of Comprehensive Loss
Amounts expressed in Renminbi ("RMB"), unless otherwise stated
(in thousands, except for share and per share data)
Three Months Ended
September 30, 2017 June 30, 2018 September 30, 2018 September 30, 2018
(unaudited) (unaudited) (unaudited) (unaudited)
(USD)
Revenue:
- Vehicle sales - 44,399 1,426,879 207,758
- Other sales - 1,592 42,694 6,216
Total revenues - 45,991 1,469,573 213,974
Cost of Sales:
- Vehicle sales - (185,531) (1,488,538) (216,735)
- Other sales - (13,648) (97,353) (14,175)
Total cost of sales - (199,179) (1,585,891) (230,910)
Gross loss - (153,188) (116,318) (16,936)
Operating expenses:
Research and development expenses(747,209) (765,205) (1,023,435) (149,015)
Selling, general and administrative expenses(540,648) (956,568) (1,670,100) (243,171)
Total operating expenses (1,287,857) (1,721,773) (2,693,535) (392,186)
Loss from operations (1,287,857) (1,874,961) (2,809,853) (409,122)
Interest income 4,802 21,128 21,820 3,177
Interest expenses (2,304) (14,442) (27,582) (4,016)
Share of losses of equity investee(1,900) (6,525) (4,035) (588)
Investment income 1,507 - - -
Other (loss)/income, net (13,667) 82,778 10,588 1,542
Loss before income tax expense (1,299,419) (1,792,022) (2,809,062) (409,007)
Income tax expense (1,256) (2,485) (1,374) (200)
Net loss (1,300,675) (1,794,507) (2,810,436) (409,207)
Accretion on convertible redeemable preferred shares to redemption value(352,892) (4,323,154) (6,923,008) (1,008,009)
Accretion on redeemable non-controlling interests to redemption value- - (31,399) (4,572)
Net loss attributable to non-controlling interests5,102 7,036 8,000 1,165
Net loss attributable to ordinary
shareholders of NIO Inc. (1,648,465) (6,110,625) (9,756,843) (1,420,623)
Net loss (1,300,675) (1,794,507) (2,810,436) (409,207)
Other comprehensive (loss)/income
Foreign currency translation adjustment, net of nil tax(68,497) 1,217 95,189 13,860
Total other comprehensive (loss)/income (68,497) 1,217 95,189 13,860
Total comprehensive loss (1,369,172) (1,793,290) (2,715,247) (395,347)
Accretion on convertible redeemable preferred shares to redemption value(352,892) (4,323,154) (6,923,008) (1,008,009)
Accretion on redeemable non-controlling interests to redemption value- - (31,399) (4,572)
Net loss attributable to non-controlling interests5,102 7,036 8,000 1,165
Comprehensive loss attributable to
ordinary shareholders of NIO Inc. (1,716,962) (6,109,408) (9,661,654) (1,406,763)
Weighted average number of ordinary shares used
in computing net loss per share, basic and diluted21,841,382 29,818,067 229,083,029 229,083,029
Weighted average number of ADS used in
computing net loss per share, basic and diluted— — 229,083,029 229,083,029
Net loss per share attributable to
ordinary shareholders, basic and diluted(75.47) (204.93) (42.59) (6.20)
Net loss per ADS attributable to
ordinary shareholders, basic and diluted— — (42.59) (6.20)
Note: All translations from RMB to USD were made at the rate of RMB6.8680 to US$1.00, the noon buying rate in effect on September 28, 2018 in the H.10 statistical release of the Federal Reserve Board.

NIO Inc.
Unaudited Reconciliation of GAAP and Non-GAAP Results
Amounts expressed in Renminbi ("RMB"), unless otherwise stated
(in thousands, except for percentage and per share data)
Three Months Ended September 30, 2018
GAAP Result % of Net Non-GAAP % of Net Non-GAAP % of Net
Revenue Adjustment Revenue Result Revenue
Share-based compensation included in Cost of sales and Operating expenses is as follows:
Cost of sales (1,585,891) -107.9% 8,020 0.5% (1,577,871) -107.4%
Research and development expenses (1,023,435) -69.6% 76,148 5.2% (947,287) -64.5%
Selling, general and administrative expenses (1,670,100) -113.6% 348,025 23.7% (1,322,075) -90.0%
Total (4,279,426) -291.2% 432,193 29.4% (3,847,233) -261.8%
Loss from operations (2,809,853) -191.2% 432,193 29.4% (2,377,660) -161.8%
Accretion on convertible redeemable preferred shares to redemption value (6,923,008) -471.1% 6,923,008 471.1% - 0.0%
Accretion on redeemable non-controlling interests to redemption value (31,399) -2.1% 31,399 2.1% - 0.0%
Net loss attributable to ordinary shareholders of NIO Inc. (9,756,843) -663.9% 7,386,600 502.6% (2,370,243) -161.3%
Net loss per share attributable to ordinary shareholders, basic and diluted (RMB) (42.59) 32.24 (10.35)
Net loss per ADS attributable to ordinary shareholders, basic and diluted (RMB) (42.59) 32.24 (10.35)
Net loss per ADS attributable to ordinary shareholders, basic and diluted (USD) (6.20) 4.69 (1.51)
Three Months Ended June 30, 2018
GAAP Result % of Net Non-GAAP % of Net Non-GAAP % of Net
Revenue Adjustment Revenue Result Revenue
Share-based compensation included in Cost of sales and Operating expenses is as follows:
Cost of sales (199,179) -433.1% - 0.0% (199,179) -433.1%
Research and development expenses (765,205) -1,663.8% 3,498 7.6% (761,707) -1,656.2%
Selling, general and administrative expenses (956,568) -2,079.9% 59,946 130.3% (896,622) -1,949.6%
Total (1,920,952) -4,176.8% 63,444 137.9% (1,857,508) -4,038.9%
Loss from operations (1,874,961) -4,076.8% 63,444 137.9% (1,811,517) -3,938.9%
Accretion on convertible redeemable preferred shares to redemption value (4,323,154) -9,400.0% 4,323,154 9,400.0% - 0.0%
Net loss attributable to ordinary shareholders of NIO Inc. (6,110,625) -13,286.6% 4,386,598 9,537.9% (1,724,027) -3,748.6%
Net loss per share attributable to ordinary shareholders, basic and diluted (RMB) (204.93) 147.11 (57.82)
Three Months Ended September 30, 2017
GAAP Result % of Net Non-GAAP % of Net Non-GAAP % of Net
Revenue Adjustment Revenue Result Revenue
Share-based compensation included in Cost of sales and Operating expenses is as follows:
Cost of sales - — - — - —
Research and development expenses (747,209) — 4,075 — (743,134) —
Selling, general and administrative expenses (540,648) — 13,348 — (527,300) —
Total (1,287,857) — 17,423 — (1,270,434) —
Loss from operations (1,287,857) — 17,423 — (1,270,434) —
Accretion on convertible redeemable preferred shares to redemption value (352,892) — 352,892 — - —
Net loss attributable to ordinary shareholders of NIO Inc. (1,648,465) — 370,315 — (1,278,150) —
Net loss per share attributable to ordinary shareholders, basic and diluted (RMB) (75.47) 16.95 (58.52)
Note: All translations from RMB to USD were made at the rate of RMB6.8680 to US$1.00, the noon buying rate in effect on September 28, 2018 in the H.10 statistical release of the Federal Reserve Board.

Source: NIO

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