Ucommune International Ltd. Reports First Nine Months of 2020 Unaudited Financial Results of Ucommune Group Holdings Limited

BEIJING, Dec. 23, 2020 /PRNewswire/ — Ucommune Worldwide Ltd. (NASDAQ: UK) (“Ucommune Worldwide”), at this time introduced the unaudited monetary outcomes of its acquired firm, Ucommune Group Holdings Restricted (“Ucommune Group” or the “Firm”), a number one agile workplace house supervisor and supplier in China, for the primary 9 months ended September 30, 2020. The knowledge offered on this launch solely represents the historic monetary data of Ucommune Group previous to its closing of the enterprise mixture with Ucommune Worldwide on November 17, 2020.

Monetary Highlights of the First 9 Months of 2020

• Web revenues had been RMB598.5 million (US$88.1 million), in contrast with RMB874.6 million within the first 9 months of 2019.

• Working loss margin was 38%, in contrast with 64% within the first 9 months of 2019.

• Web loss was RMB358.8 million (US$52.8 million), in contrast with RMB570.7 million within the first 9 months of 2019.

• EBITDA loss (Non-GAAP) was RMB309.8 million (US$45.6 million), in contrast with RMB478.7 million within the first 9 months of 2019. For a reconciliation of EBITDA to internet loss, see the “Non-GAAP Monetary Measures” part and the desk captioned “Ucommune Group Holdings Restricted Reconciliation of GAAP and Non-GAAP Outcomes” beneath.

• EBITDA loss margin was 52%, in contrast with 55% within the first 9 months of 2019.

• Adjusted EBITDA loss (Non-GAAP) was RMB145.7 million (US$21.5 million), in contrast with RMB230.7 million within the first 9 months of 2019. For a reconciliation of adjusted EBITDA to internet loss, see the “Non-GAAP Monetary Measures” part and the desk captioned “Ucommune Group Holdings Restricted Reconciliation of GAAP and Non-GAAP Outcomes” beneath.

• Adjusted EBITDA loss margin was 24%, in contrast with 26% within the first 9 months of 2019.

• Adjusted internet loss (Non-GAAP) was RMB278.8 million (US$41.1 million), in contrast with RMB343.1 million within the first 9 months of 2019. For a reconciliation of adjusted internet loss to internet loss, see the “Non-GAAP Monetary Measures” part and the desk captioned “Ucommune Group Holdings Restricted Reconciliation of GAAP and Non-GAAP Outcomes” beneath.

Working Highlights of the First 9 Months of 2020

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• As of September 30, 2020, Ucommune Group had 222 workplace areas in 51 cities, amongst which 158 areas had been in operation, offering roughly 58,000 workstations to Ucommune Group’s 860,400 members.

• As of September 30, 2020, beneath Ucommune Group’s asset light-model, the Firm’s complete variety of areas beneath contract elevated by 126% to 106 from 47 as of December 31, 2019, whereas its complete managed space beneath contract contractual elevated by 59% to 272,900 sq. meters from 171,200 sq. meters as of December 31, 2019.¹

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1} Areas and managed areas beneath contract embrace these in operation, beneath building, and in preparation for building.

Dr. Daqing Mao, Founding father of Ucommune Group, commented, “Regardless of the varied challenges confronted by our trade in 2020, we restricted the influence of those challenges on our operations. On the finish of 2019, we determined to transition our enterprise in the direction of an asset-light mannequin, and the fast unfold of the pandemic since that point has solely accelerated our enterprise transformation. Through the first three quarters of 2020, we proactively closed workplace areas that negatively impacted our money flows and re-allocated our sources to enterprise segments able to accelerating our progress to profitability. Consequently, our workspace membership providers revenues declined by solely 18% yr over yr, whereas our EBITDA loss narrowed by greater than 35% in the course of the 9 months interval. In the meantime, a lot of our company purchasers confronted financial uncertainties and thus selected to scale back their promoting budgets, which negatively affected our advertising and marketing and branding providers revenues. However, as China continues to embark on its financial restoration, we are actually seeing companies steadily return to the outdated norm of working in workplaces, and our workspace occupancy charge and unit house income ought to enhance accordingly. As a publicly traded firm, we plan to enhance our enterprise via innovation, diversify our income streams, handle our expenditures, and generate high quality returns for our shareholders over the long term. We’ve got witnessed early success from our internally developed SAAS administration platform for workplace buildings and industrial parks. Underneath this platform, providers equivalent to lease contract administration, CRM promotion administration, IOT clever gadget administration, member operation administration and asset administration have enhanced the worth of properties managed by Ucommune Group.”

Mr. Cheong Kwok Mun, Chief Monetary Officer of Ucommune Group, added, “Our strategic transformation in the direction of an asset-light enterprise mannequin has helped us mitigate the destructive influence from COVID-19, as evidenced by our less-than-expected income decline and faster-than-expected margin enchancment. As we redirect extra of our sources in the direction of managing our workspace profitability and prudently controlling our bills, we’re assured that we’re nicely on our approach in the direction of profitability and constructive money circulation within the coming years. Wanting forward, we’re assured that our asset-light enterprise mannequin, market management in agile workplace house administration, and capital markets entry ought to pave the way in which in the direction of a sustainable, measured, and worthwhile progress trajectory.”

First 9 Months of 2020 Unaudited Monetary Outcomes

Complete internet revenues had been RMB598.5 million (US$88.1 million) within the first 9 months of 2020, representing a lower of 32% from RMB874.6 million within the first 9 months of 2019. Revenues from the asset light-model had been RMB26.3 million (US$3.9 million) within the first 9 months of 2020, representing a rise of 79% from RMB14.7 million within the first 9 months of 2019.

• Workspace membership providers revenues had been RMB346.2 million (US$51.0 million) within the first 9 months of 2020, representing a lower of 18% from RMB419.6 million within the first 9 months of 2019. This lower was primarily because of the decreased variety of areas in operation and the contraction of the Firm’s co-working house providers, primarily brought on by the outbreak of COVID-19 within the first 9 months of 2020. However, on account of China’s early success in containing the COVID-19 epidemic and the Firm’s improved working effectivity, the Firm has achieved important transformational enhancements because the third quarter of 2020, significantly when it comes to occupancy charges and unit house income.

• Advertising and marketing and branding providers revenues had been RMB207.4 million (US$30.5 million) within the first 9 months of 2020, representing a lower of 49% from RMB403.5 million within the first 9 months of 2019, primarily as a result of decreased demand for promoting and advertising and marketing providers within the first 9 months of 2020.

• Different providers revenues had been RMB45.0 million (US$6.6 million) within the first 9 months of 2020, representing a lower of 13% from RMB51.5 million within the first 9 months of 2019, primarily because of the lower in internet income generated from the Firm’s inside design and building providers, ensuing from the suspension of design and building providers brought on by COVID-19.

Complete prices of revenues had been RMB682.8 million (US$100.6 million) within the first 9 months of 2020, representing a lower of 33% from RMB1,017.4 million within the first 9 months of 2019. Prices of revenues from the asset light-model had been RMB17.6 million (US$2.6 million) within the first 9 months of 2020, representing a rise of 83% from RMB9.6 million within the first 9 months of 2019.

• Prices of workspace membership had been RMB446.5 million (US$65.8 million ) within the first 9 months of 2020, representing a lower of 26% from RMB605.2 million within the first 9 months of 2019, primarily as a result of decreased operational prices associated to leases in addition to decreased prices for property providers and workers.

• Prices of advertising and marketing and branding providers had been RMB189.1 million (US$27.8 million) within the first 9 months of 2020, representing a lower of 48% from RMB364.4 million within the first 9 months of 2019, primarily as a result of decreased promoting prices, which was according to the lower in promoting income.

• Prices of different providers had been RMB47.2 million (US$7.0 million) within the first 9 months of 2020, representing a lower of 1% from RMB47.7 million within the first 9 months of 2019, primarily as a result of decreased workers prices.

Normal and administrative bills had been RMB87.2 million (US$12.8 million) within the first 9 months of 2020, representing a lower of 32% from RMB128.8 million within the first 9 months of 2019, primarily on account of decreased workers prices as Ucommune Group optimized its workers construction and decreased its normal and administrative personnel to extend operational effectivity, and decrease skilled service charges.

Gross sales and advertising and marketing bills had been RMB22.9 million (US$3.4 million) within the first 9 months of 2020, representing a lower of 53% from RMB48.3 million within the first 9 months of 2019, primarily as the results of the discount in workers prices in addition to promotion-related value management measures, which had been according to the Firm’s decreased areas because of the destructive influence of COVID-19.

Impairment loss on long-lived property was RMB33.5 million (US$4.9 million ) within the first 9 months of 2020, representing a lower of 27% from RMB46.1 million within the first 9 months of 2019, primarily as a result of decrease impairment of these areas the place the carrying worth will not be anticipated to be absolutely recoverable.

Pre-opening bills had been nil within the first 9 months of 2020, representing a lower of 100% from RMB14.1 million within the first 9 months of 2019, primarily as the results of the Firm’s short-term slowdown in co-working house growth.

Loss from operations was RMB227.9 million (US$33.6 million) within the first 9 months of 2020, representing a lower of 59% from RMB559.3 million within the first 9 months of 2019.

Different bills, internet had been RMB84.2 million (US$12.4 million) within the first 9 months of 2020, representing a rise of 311% from RMB20.5 million within the first 9 months of 2019, primarily as a result of loss ensuing from the Firm’s disposal of areas.

Web loss was RMB358.8 million (US$52.8 million) within the first 9 months of 2020, representing a lower of 37% from RMB570.7 million within the first 9 months of 2019.

Fundamental and diluted internet loss per share had been each RMB2.61 (US$0.39) within the first 9 months of 2020, representing a lower of 55% from RMB5.84 within the first 9 months of 2019, primarily as the results of decrease internet loss and a rise in weighted common shares excellent.

Money, money equivalents and restricted money had been RMB112.4 million (US$16.6 million) as of September 30, 2020, representing a lower of 43% from RMB196.3 million as of December 31, 2019, primarily because of the reimbursement of loans.

Web money utilized in working actions was RMB2.3 million (US$0.4 million), representing a lower of 99% from RMB231.6 million within the first 9 months of 2019, primarily as a result of decreased money used for leased amenities on account of the Firm’s short-term slowdown in co-working house growth.

Enterprise Outlook

For the complete yr of 2020, the Firm expects internet revenues to be within the vary of RMB850 million to RMB870 million. The forecast displays the Firm’s present and preliminary views available on the market and its operational situations, that are topic to vary.

Latest Developments

On November 17, 2020, Ucommune Worldwide consummated its beforehand introduced enterprise mixture, which resulted in Ucommune Group being a completely owned subsidiary of Ucommune Worldwide.

In reference to the closing of the Firm’s enterprise mixture, as of November 18, 2020, sure backstop buyers had invested an mixture quantity of $68.0 million pursuant to backstop agreements, together with an mixture funding of $60.9 million in a PIPE financing.

As of November 25, there have been 80,451,843 bizarre shares excellent, consisting of 70,999,436 Class A bizarre shares and 9,452,407 Class B bizarre shares. The Class A bizarre shares and warrants of the Firm are buying and selling on The Nasdaq Inventory Market beneath the symbols “UK” and “UKOMW,” respectively.

About Ucommune Worldwide Ltd.

Ucommune Worldwide is China’s main agile workplace house supervisor and supplier. Based in 2015, Ucommune Worldwide has created a large-scale clever agile workplace ecosystem overlaying economically vibrant areas all through China to empower its members with versatile and cost-efficient workplace house options. Ucommune Worldwide’s varied offline agile workplace house providers embrace self-operated fashions, equivalent to U Area, U Studio, and U Design, in addition to asset-light fashions, equivalent to U Model and U Accomplice. By using its experience in the true property and retail industries, Ucommune Worldwide operates its agile workplace areas with excessive effectivity and engages within the city transformation of older and under-utilized buildings to redefine business actual property in China.

Change Price Data

This announcement accommodates translations of sure RMB quantities into U.S. {dollars} (“US$”) at specified charges solely for the comfort of the reader. Until in any other case said, all translations from RMB to US$ had been made on the charge of RMB6.7896 to US$1.00, the trade charge on September 30, 2020, set forth within the H.10 statistical launch of the Federal Reserve Board. The Firm makes no illustration that the RMB or US$ quantities referred might be transformed into US$ or RMB, because the case could also be, at any explicit charge or in any respect.

Assertion Relating to Preliminary Unaudited Monetary Data

The unaudited monetary data set out on this earnings launch is preliminary and topic to potential changes. Changes to the consolidated monetary statements could also be recognized when audit work has been carried out for the Firm’s year-end audit, which might lead to important variations from this preliminary unaudited monetary data.

Protected Harbor Statements

This announcement accommodates forward-looking statements throughout the which means of Part 21E of the Securities Change Act of 1934, as amended. These forward-looking statements are made beneath the “protected harbor” provisions of the U.S. Non-public Securities Litigation Reform Act of 1995. These statements might be recognized by terminology equivalent to “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “potential,” “proceed,” “ongoing,” “targets,” “steerage” and related statements. The Firm may make written or oral forward-looking statements in its periodic studies to the U.S. Securities and Change Fee (the “SEC”), in its annual report back to shareholders, in press releases and different written supplies and in oral statements made by its officers, administrators or workers to 3rd events. Any statements that aren’t historic information, together with statements concerning the Firm’s beliefs and expectations, are forward-looking statements. Ahead-looking statements contain inherent dangers and uncertainties. Numerous components might trigger precise outcomes to vary materially from these contained in any forward-looking assertion, together with however not restricted to the next: the Firm’s progress methods; its future enterprise improvement, outcomes of operations and monetary situation; its skill to know purchaser wants and supply services and products to draw and retain patrons; its skill to keep up and improve the popularity and status of its model; its skill to depend on retailers and third-party logistics service suppliers to offer supply providers to patrons; its skill to keep up and enhance high quality management insurance policies and measures; its skill to determine and preserve relationships with retailers; developments and competitors in China’s e-commerce market; modifications in its revenues and sure value or expense gadgets; the anticipated progress of China’s e-commerce market; PRC governmental insurance policies and rules regarding the Firm’s trade, and normal financial and enterprise situations globally and in China and assumptions underlying or associated to any of the foregoing. Additional data relating to these and different dangers, uncertainties or components is included within the Firm’s filings with the SEC. All data offered on this press launch and within the attachments is as of the date of this press launch, and the Firm undertakes no obligation to replace any forward-looking assertion, besides as required beneath relevant legislation.

Non-GAAP Monetary Measures

To complement the Firm’s mixed and consolidated monetary statements, that are ready and introduced in accordance with U.S. GAAP, Ucommune Group makes use of the next non-GAAP monetary measures for Ucommune Group’s mixed and consolidated outcomes: EBITDA (together with EBITDA margin), adjusted EBITDA (together with adjusted EBITDA margin) and adjusted internet loss. The Firm believes that EBITDA, adjusted EBITDA and adjusted internet loss assist perceive and consider the Firm’s core working efficiency.

EBITDA, adjusted EBITDA and adjusted internet loss are introduced to reinforce buyers’ total understanding of the Firm’s monetary efficiency and shouldn’t be thought-about an alternative choice to, or superior to, the monetary data ready and introduced in accordance with U.S. GAAP. Traders are inspired to overview the reconciliation of the historic non-GAAP monetary measure to its most straight comparable GAAP monetary measures. As EBITDA, adjusted EBITDA and adjusted internet loss have materials limitations as analytical metrics and will not be calculated in the identical method by all firms, they will not be similar to different equally titled measures utilized by different firms.

In mild of the foregoing limitations, you shouldn’t contemplate EBITDA, adjusted EBITDA and adjusted internet loss as substitutes for, or superior to, internet loss ready in accordance with GAAP. The Firm encourages buyers and others to overview its monetary data in its entirety and never depend on any single monetary measure. For extra data on these non-GAAP monetary measures, please see the desk captioned “Ucommune Group Holdings Restricted Reconciliation of GAAP and Non-GAAP Outcomes” close to the tip of this launch.

EBITDA represents internet loss earlier than curiosity revenue, curiosity expense, provision for revenue taxes, depreciation of property and gear and amortization of intangible property.

Adjusted EBITDA represents internet loss earlier than (i) curiosity revenue, curiosity expense, different expense, internet, provision for revenue taxes and loss on disposal of subsidiaries and (ii) sure non-cash bills, consisting of impairment loss on long-term investments. impairment loss on long-lived property, depreciation of property and gear, amortization of intangible property and alter in truthful worth of liabilities to be settled in shares, which we don’t consider are reflective of our core working efficiency in the course of the durations introduced.

Adjusted internet loss represents internet loss earlier than impairment loss on long-lived property, impairment loss on long-term investments, change in truthful worth of liabilities to be settled in shares and loss on disposal of subsidiaries.

For investor and media inquiries, please contact:

Ucommune Worldwide Ltd.
ir@ucommune.com

ICR, LLC.
Sharon Zhou
ucommune@icrinc.com
+1 (212) 537-3847

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