111, Inc. today announced its unaudited financial results for the first quarter ended March 31, 2024.
SHANGHAI, May 23, 2024 /PRNewswire/ -- 111, Inc. (“111" or the “Company”) (NASDAQ: YI), a leading tech-enabled healthcare platform company committed to reshaping the value chain of healthcare industry by digitally empowering the upstream and downstream in China, today announced its unaudited financial results for the first quarter ended March 31, 2024. First Quarter 2024 Highlights
Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive Officer of 111, commented, “We are delighted to start the year with a major milestone in the first quarter of 2024 as our continuous operational enhancements empowered us to turn to operational profitability for the first time. Notably, income from operations reached RMB3.7 million during the period, a wonderfully positive shift from an operational loss of RMB21.7 million a year ago. This was achieved despite a decrease in first-quarter revenue because of a higher baseline set in the corresponding period of 2023 during the peak of the pandemic. Non-GAAP income from operations even more than tripled year over year to a record high of RMB8.9 million. Our performance in the quarter validates the effectiveness of our business model as a leading tech-enabled healthcare platform company committed to digitally empower the entire healthcare value chain as well as our growth strategies. Mr. Liu added, “We successfully elevated our operational efficiency after disciplined expense optimization across the whole organization. Our operating expenses as a percentage of net revenues decreased 120 basis points to 5.8%, while the ratio for non-GAAP operating expenses fell 60 basis points to 5.7%, reflecting our efforts for prudent resource management in the pursuit of sustainable growth. We anticipate the possibility of further operating cost reductions and higher efficiency as we scale up our business and refine operations. Our ambition is to stand out as the pinnacle of efficiency in the pharmaceutical e-commerce realm, and we strive to amplify our operational effectiveness to sharpen our competitive edge.” “Furthermore, our investments in technology empowerment effectively drove up operational efficiency and customer engagement. We also made novel supply chain advancement that will unlock new growth opportunities, highlighted by our launch of a new delivery and transit model for streamlining logistics and saving fulfilment costs. Our pioneering role in digital commerce transformation and commitment to innovative excellence has also been recognized as we obtained significant accolades and a new patent from government agencies and professional institutions.” “Looking ahead, we will remain dedicated to delivering one-stop shopping experiences supported by the most comprehensive and cost-effective product portfolio. With our internal 100% digital operating system at our core, we’ve attained unmatched operational efficiency within the industry. We are well positioned to empower both upstream and downstream customers to improve efficiency for the entire industry and reshape the traditional value chain. Our focus on strengthened partnership with pharmaceutical companies, strategic investments in operational efficiency, as well as relentless commitment to digitalization and AI innovation will enable us to capture greater market share and growth for higher revenue and profit levels. We are confident that these initiatives will solidify our leadership in the market, and we look forward to continuously generating value to our shareholders, customers, and stakeholders in the quarters ahead.” First Quarter 2024 Financial Results Net revenues were RMB3.5 billion (US$488.7 million), representing a decrease of 4.6% from RMB3.7 billion in the same quarter of last year.
Operating costs and expenses were RMB3.5 billion (US$488.2 million), representing a decrease of 5.2% from RMB3.7 billion in the same quarter of last year.
Income from operations was RMB3.7 million (US$0.5 million), compared to loss from operations was RMB21.7 million in the same quarter of last year. Non-GAAP income from operations was RMB8.9 million (US$1.2 million), compared to RMB2.5 million in the same quarter of last year. As a percentage of net revenues, non-GAAP income from operations accounted for 0.3% in the quarter as compared to 0.1% in the same quarter of last year. Net loss was RMB2.7 million (US$0.4 million), compared to RMB19.4 million in the same quarter of last year. As a percentage of net revenues, net loss decreased to 0.1% in the quarter from 0.5% in same quarter of last year. Non-GAAP net income(4) was RMB2.5 million (US$0.3 million), compared to RMB4.9 million in the same quarter of last year. As a percentage of net revenues, non-GAAP net income accounted for 0.1% in the quarter, which was same as last year. Net loss attributable to ordinary shareholders was RMB13.8 million (US$1.9 million), compared to RMB31.8 million in the same quarter of last year. As a percentage of net revenues, net loss attributable to ordinary shareholders decreased to 0.4% in the quarter from 0.9% in same quarter of last year. Non-GAAP net loss attributable to ordinary shareholders(5) was RMB8.6 million (US$1.2 million), compared to RMB7.6 million in the same quarter of last year. As a percentage of net revenues, non-GAAP net loss attributable to ordinary shareholders accounted for 0.2% in the quarter, which was same as last year.
As of March 31, 2024, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB627.3 million (US$86.9 million), compared to RMB673.7 million as of December 31, 2023. To this date, the Company has a total outstanding amount of RMB1.1 billion, which has been included in the balances of redeemable non-controlling interests and accrued expenses and other current liabilities, owed to a group of investors of 1 Pharmacy Technology pursuant to their equity investments made in 2020 as previously disclosed. 111 has received redemption requests from certain of such investors for a total redemption amount of RMB0.2 billion in accordance with the terms of their initial investments in 1 Pharmacy Technology. Furthermore, the Company has entered into written agreements and/or commitment letters with investors representing the majority of the total carrying amounts. For more information about the terms of 111’s arrangements with these investors, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” in the Company’s annual report for the fiscal year ended December 31, 2023. Conference Call 111’s management team will host an earnings conference call at 7:30 AM U.S. Eastern Time on Thursday, May 23, 2024 (7:30 PM Beijing Time on the same day). Details for the conference call are as follows: Event Title: 111, Inc. First Quarter 2024 Unaudited Financial Results All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique Registration ID, which can be used to join the conference call. Please dial in 15 minutes before the call is scheduled to begin and provide the Direct Event passcode and unique Registration ID you have received upon registering to join the call. A telephone replay of the call will be available after the conclusion of the conference call until May 30, 2024 on: China: 4001 209 216 A live and archived webcast of the conference call will be available on the website at https://edge.media-server.com/mmc/p/83ojreww. Use of Non-GAAP Financial Measures In evaluating the business, the Company considers and uses non-GAAP income from operations, non-GAAP net income, non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS, as supplemental measures to review and assess its operating performance. The Company defines non-GAAP income from operations as income (loss) from operations excluding share-based compensation expenses. The Company defines non-GAAP net income as net loss excluding share-based compensation expenses, net of tax. The Company defines non-GAAP net loss attributable to ordinary shareholders as net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. The Company defines non-GAAP loss per ADS as net loss attributable to ordinary shareholders per ADS excluding share-based compensation expenses, net of tax per ADS. 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. The Company believes that non-GAAP income from operations, non-GAAP net income, non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that it includes in income (loss) from operations and net loss. Share-based compensation expenses is a non-cash expense that varies from period to period. As a result, management excludes the items from its internal operating forecasts and models. Management believes that the adjustments for share-based compensation expenses provide investors with a reasonable basis to measure the company’s core operating performance, in a more meaningful comparison with the performance of other companies. The Company believes that non-GAAP income from operations, non-GAAP net income, non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS provide useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the management in their 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. One of the key limitations of using non-GAAP income from operations, non-GAAP net income, non-GAAP net loss attributable to ordinary shareholders, or non-GAAP loss per ADS is that it does not reflect all items of income and expense that affect the Company’s operations. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP measures, all of which should be considered when evaluating the Company’s performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure. Reconciliation of the non-GAAP financial measures to the most comparable U.S. GAAP measures is included at the end of this press release. Exchange Rate Information Statement This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2203 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of March 31, 2024. Forward-Looking Statements This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in 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,” “target,” “confident” and similar statements. Among other things, the Business Outlook and quotations from management in this announcement, as well as 111’s strategic and operational plans, contain forward-looking statements. 111 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. Such statements are based upon management’s current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company’s control. Forward-looking statements involve inherent risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to the Company’s ability comply with extensive and evolving regulatory requirements, its ability to compete effectively in the evolving PRC general health and wellness market, its ability to manage the growth of its business and expansion plans, its ability to achieve or maintain profitability in the future, its ability to control the risks associated with its pharmaceutical retail and wholesale businesses, and the Company’s ability to meet the standards necessary to maintain listing of its ADSs on the Nasdaq Global Market, including its ability to cure any non-compliance with Nasdaq’s continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and 111 does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law. About 111, Inc. 111, Inc. (NASDAQ: YI) (“111" or the “Company”) is a leading tech-enabled healthcare platform company committed to reshaping the value chain of healthcare industry by digitally empowering the upstream and downstream in China. The Company provides consumers with better access to pharmaceutical products and healthcare services directly through its online retail pharmacy, 1 Pharmacy, and indirectly through its offline virtual pharmacy network. The Company also offers online healthcare services through its internet hospital, 1 Clinic, which provides consumers with cost-effective and convenient online consultation, electronic prescription service, and patient management service. In addition, the Company’s online platform, 1 Medicine, serves as a one-stop shop for pharmacies to source a vast selection of pharmaceutical products. With the largest virtual pharmacy network in China, 111 enables offline pharmacies to better serve their customers with cloud-based services. 111 also provides an omni-channel drug commercialization platform to its strategic partners, which includes services such as digital marketing, patient education, data analytics, and pricing monitoring. For more information on 111, please visit: http://ir.111.com.cn/. For more information, please contact: 111, Inc. 111, Inc.
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