BEIJING, Dec. 10, 2019
/PRNewswire/ -- LightInTheBox Holding Co., Ltd. (NYSE: LITB)
("LightInTheBox" or the "Company"), a cross-border e-commerce
platform that delivers products directly to consumers around the
world, today announced its unaudited financial results for the
third quarter ended September 30, 2019.
Third Quarter 2019 Highlights
- Total revenues regained significant growth momentum increasing
34.6% year-over-year to $59.9
million.
- Gross margin improved to 42.3% from 15.1% in the same quarter
of 2018.
- Net income was $10.0 million,
compared with a net loss of $17.8
million in the same quarter of 2018.
- Adjusted EBITDA[1] improved significantly,
increasing to earnings of $0.5
million, compared with a loss of $17.3 million in the same quarter of 2018.
[1] For a discussion of the use of
non-GAAP financial measures, see "Non-GAAP Financial
Measures."
|
Mr. Jian He, Chief Executive
Officer of LightInTheBox, commented, "Our results this quarter are
a strong reflection of the significant progress we have made since
we began implementing our strategy to turn the business around last
year. I am pleased to report that we are beginning to see the
tangible benefits of the changes we have been making to improve
operational efficiency, product optimization, and cost controls
which resulted in our first quarter of GAAP profitability since
2014. In particular, our focus on improving product optimization,
driving customer engagement and expanding our market scale have
been critical to the success we have seen so far. Adjusted EBITDA
was also positive for the second consecutive quarter, increasing to
earnings of $0.5 million from a loss
of $17.3 million during the same
period last year, which I believe demonstrates the growth
trajectory we are on. We remain focused on executing our strategy
to generate sustainable long-term growth and are very encouraged by
our improvements to date. We will continue to implement our
strategies in order to maintain the trend of improvement."
Third Quarter 2019 Financial Results
Total revenues increased by 34.6% year-over-year to
$59.9 million from $44.5 million in the same quarter of 2018.
Revenues generated from product sales were $58.1 million, compared with $42.9 million in the same quarter of 2018.
Revenues from service and others were $1.8
million, compared with $1.6
million in the same quarter of 2018.
The number of orders for product sales was 1.4 million in the
third quarter of 2019, compared with 0.8 million in the same
quarter of 2018. The number of customers for product sales was 0.8
million for the third quarter of 2019, compared with 0.7 million in
the same quarter of 2018.
Revenues generated from product sales in the apparel category
were $20.3 million in the third
quarter of 2019, compared with $14.4
million in the same quarter of 2018. As a percentage of
product sales, apparel revenues accounted for 34.9% in the third
quarter of 2019, compared with 33.6% in the same quarter of 2018.
Revenues generated from product sales from other general
merchandise were $37.8 million in the
third quarter of 2019.
Total cost of revenues was $34.6
million in the third quarter of 2019, compared with
$37.8 million in the same quarter of
2018. Cost for product sales was $33.8
million in the third quarter of 2019, compared with
$36.3 million in the same quarter of
2018. Cost for service and others was $0.8
million in the third quarter of 2019, compared with
$1.4 million in the same quarter of
2018.
Gross profit in the third quarter of 2019 was
$25.3 million, compared with
$6.7 million in the same quarter of
2018. Gross margin was 42.3% in the third quarter of 2019, compared
with 15.1% in the same quarter of 2018. The increase in gross
margin was a result of our continuous efforts to drive revenues
from categories with high margin.
Total operating expenses in the third quarter of 2019
were $25.7 million, compared with
$24.8 million in the same quarter of
2018.
- Fulfillment expenses in the third quarter of 2019 were
$6.8 million, compared with
$3.4 million in the same quarter of
2018. As a percentage of total revenues, fulfillment expenses were
11.3% in the third quarter of 2019, compared to 7.6% in the same
quarter of 2018 and 8.4% in the second quarter of 2019.
- Selling and marketing expenses in the third quarter of
2019 were $12.4 million, compared
with $11.3 million in the same
quarter of 2018. As a percentage of total revenues, selling and
marketing expenses were 20.8% for the third quarter of 2019,
compared to 25.4% in the same quarter of 2018 and 19.8% in the
second quarter of 2019.
- G&A expenses in the third quarter of 2019 were
$1.6 million, compared with
$7.5 million in the same quarter of
2018. As a percentage of total revenues, G&A expenses were 2.6%
for the third quarter of 2019, compared with 16.9% in the same
quarter of 2018 and 11.0% in the second quarter of 2019.
- R&D expenses in the third quarter of 2019 were
$4.9 million, compared with
$2.5 million in the same quarter of
2018. As a percentage of total revenues, R&D expenses
represented 8.2% for the third quarter of 2019, compared with 5.7%
in the same quarter of 2018 and 7.1% in the second quarter of
2019.
Loss from operations was $0.4
million in the third quarter of 2019, compared with
$18.1 million in the same quarter of
2018.
Net income was $10.0
million in the third quarter of 2019, compared with a net
loss of $17.8 million in the same
quarter of 2018. The net income as a result of the change in fair
value of the convertible promissory notes associated with the
acquisition of Ezbuy in the third quarter of 2019 was $10.3 million.
Net income per American Depository Share ("ADS") was
$0.15 in the third quarter of 2019,
compared with net loss per ADS of $0.27 in the same quarter of 2018. Each ADS
represents two ordinary shares. The diluted net loss per ADS in the
third quarter of 2019 was $0.00 and
$0.27 in the same quarter of
2018.
In the third quarter of 2019, the Company's basic weighted
average number of ADSs used in computing the income per ADS was
67,347,087, and 111,788,645 ADSs in diluted weighted average
number.
Adjusted EBITDA, which represents gain /(loss) from
operations before share-based compensation expense, change in fair
value of convertible promissory notes, interest income, interest
expense, income tax expense and depreciation and amortization
expenses, was $0.5 million of earning
in the third quarter of 2019,compared with $17.3 million of loss in the same quarter of
2018.
As of September 30, 2019, the Company had cash and cash
equivalents and restricted cash of $29.7
million, compared with $29.4
million as of June 30, 2019.
Business Outlook
For the fourth quarter of 2019, based on current information
available to the Company and business seasonality, the Company
expects net revenues to be between $71
million and $75 million.
Change in Fair Value of Convertible Promissory Notes
Associated with the Acquisition of Ezbuy
The Company entered into a share purchase agreement ("SPA") on
November 8, 2018 to acquire Ezbuy in the form of non-interest
bearing one-year convertible promissory notes. This SPA took effect
on December 10, 2018 when LITB's closing stock price was
$0.64. LITB's closing stock price on
December 31, 2018 and September 30, 2019 was $1.22 and $1.20,
respectively. The Company adopted Monte-Carlo Simulation based on a
scenario-weighted average method to estimate the fair value of the
convertible promissory notes. The estimate is based on the
probability of each scenario and pay-off of the convertible
promissory notes under each scenario. The scenarios include
different timing and corresponding conversion price of the
convertible promissory notes. The key assumptions adopted in the
convertible promissory notes valuation include risk-free rate of
interest and expected stock price volatility in the conversion
period. The Company recorded a non-cash net income arising from
change in fair value of the convertible promissory notes of
$10.3 million in the third quarter of
2019.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with U.S. GAAP, we use the
following non-GAAP financial measures to help evaluate our
operating performance:
"Adjusted EBITDA" represents gain /(loss) from operations before
share-based compensation expense, change in fair value of
convertible promissory notes, interest income, interest expense,
income tax expense and depreciation and amortization expenses.
Although other companies may calculate adjusted EBITDA differently
or not present it at all, we believe that the adjusted EBITDA helps
to identify underlying trends in our operating results, enhancing
their understanding of the past performance and future
prospects.
Recent Development
The Company received a letter from the New York Stock Exchange
("NYSE"),
indicating that the Company is "below criteria" due to the average closing price of the
Company's ADSs being less than
$1.00 over a consecutive
30-trading-day period pursuant to Section 802.01C of the NYSE
Listed Company Manual.
The Company can regain compliance at any time during the six-month
cure period if on the last trading day of any calendar month during
the cure period the Company has a closing share price of at least
$1.00 and an average closing share
price of at least $1.00 over the 30
trading-day period ending on the last trading day of that month. In
the event that at the expiration of the six-month cure period, both
a $1.00 closing share price on the
last trading day of the cure period and a $1.00 average closing share price over the 30
trading-day period ending on the last trading day of the cure
period are not attained, the NYSE will commence suspension and
delisting procedures.
The Company has notified the NYSE on November 28, 2019 of its intention to cure the
deficiency. The Company's ADSs will continue to be listed and
traded on the NYSE, subject to compliance with other NYSE continued
listing standards and other rights of the NYSE to delist the ADSs.
The Company is currently in compliance with all other NYSE
continued listing standards. The NYSE notification does not affect
the Company's business operations or its Securities and Exchange
Commission reporting requirements.
Conference Call
The Company will hold a conference call at 8:00
a.m. Eastern Time on December 10, 2019 to discuss its
financial results and operating performance for the third quarter
of 2019. To participate in the call, please dial the following
numbers:
US Toll
Free:
|
1-866-519-4004
|
Hong Kong Toll
Free:
|
800-906-601
|
Mainland
China:
|
400-620-8038
|
International:
|
+65-6713-5090
|
Passcode:
|
8998868
|
A telephone replay will be available two hours after the
conclusion of the conference call through December 17, 2019.
The dial-in details are:
US:
|
+1-646-254-3697
|
Hong Kong:
|
+852-3051-2780
|
International:
|
+61-2-8199-0299
|
Passcode:
|
8998868
|
A live and archived webcast of the conference call will be
available on the Investor Relations section of LightInTheBox's
website at http://ir.lightinthebox.com.
About LightInTheBox Holding Co., Ltd.
LightInTheBox is a cross-border e-commerce platform that
delivers products directly to consumers around the world. The
Company offers customers a convenient way to shop for a wide
selection of products at attractive prices through its
www.lightinthebox.com, www.miniinthebox.com, www.ezbuy.com and
other websites and mobile applications, which are available in 25
major languages and cover more than 140 countries.
For more information, please visit www.lightinthebox.com.
Investor Relations Contact
Christensen
Ms. Xiaoyan Su
Tel: +86 (10) 5900 3429
Email: ir@lightinthebox.com
OR
Christensen
Ms. Linda Bergkamp
Tel: +1-480-614-3004
Email: lbergkamp@ChristensenIR.com
Forward-Looking Statements
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," "potential," "continue," "ongoing,"
"targets" and similar statements. Among other things,
statements that are not historical facts, including statements
about LightInTheBox's beliefs and expectations, the business
outlook and quotations from management in this announcement, as
well as LightInTheBox's strategic and operational plans, are or
contain forward-looking statements.
LightInTheBox may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission (the "SEC"), in press releases and other
written materials and in oral statements made by its officers,
directors or employees to third parties. 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: LightInTheBox's goals and strategies; LightInTheBox's
future business development, results of operations and financial
condition; the expected growth of the global online retail market;
LightInTheBox's ability to attract customers and further enhance
customer experience and product offerings; LightInTheBox's ability
to strengthen its supply chain efficiency and optimize its
logistics network; LightInTheBox's expectations regarding demand
for and market acceptance of its products; competition;
fluctuations in general economic and business conditions and
assumptions underlying or related to any of the foregoing. Further
information regarding these and other risks is included in
LightInTheBox'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 LightInTheBox does not undertake any obligation
to update any forward-looking statement, except as required under
applicable law.
LightInTheBox
Holding Co., Ltd.
|
Unaudited
Condensed Consolidated Balance Sheets
|
(U.S. dollars in
thousands, or otherwise noted)
|
|
|
As of December 31,
|
|
As of September 30,
|
|
2018
|
|
2019
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
38,808
|
|
29,054
|
Restricted
cash
|
994
|
|
642
|
Accounts receivable,
net of allowance for doubtful accounts
|
1,463
|
|
1,721
|
Amounts due from
related parties
|
—
|
|
4,113
|
Inventories
|
8,481
|
|
6,584
|
Prepaid expenses and
other current assets
|
5,811
|
|
4,920
|
Total current
assets
|
55,557
|
|
47,034
|
Property and
equipment, net
|
3,652
|
|
2,936
|
Intangible assets,
net
|
9,890
|
|
8,973
|
Goodwill
|
28,169
|
|
28,169
|
Operating lease
right-of-use assets, net
|
—
|
|
6,923
|
Long-term rental
deposits
|
1,131
|
|
913
|
Long-term
investments
|
5,188
|
|
2,798
|
TOTAL
ASSETS
|
103,587
|
|
97,746
|
|
|
|
|
LIABILITIES AND
DEFICIT
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
12,941
|
|
12,640
|
Amounts due to
related parties
|
4,953
|
|
—
|
Convertible
promissory notes
|
51,922
|
|
53,517
|
Advance from
customers
|
17,732
|
|
17,185
|
Current operating
lease liabilities
|
—
|
|
3,124
|
Income tax
payable
|
26
|
|
147
|
Accrued expenses and
other current liabilities
|
22,662
|
|
25,326
|
Total current
liabilities
|
110,236
|
|
111,939
|
|
|
|
|
Non-current operating
lease liabilities
|
—
|
|
3,757
|
Non-current finance
lease liabilities
|
1,156
|
|
900
|
TOTAL
LIABILITIES
|
111,392
|
|
116,596
|
|
|
|
|
DEFICIT
|
|
|
|
Ordinary
shares
|
11
|
|
11
|
Additional paid-in
capital
|
239,269
|
|
240,530
|
Treasury shares, at
cost
|
(27,261)
|
|
(27,261)
|
Accumulated other
comprehensive loss
|
(932)
|
|
(1,812)
|
Accumulated
deficit
|
(218,887)
|
|
(230,279)
|
Non-controlling
interests
|
(5)
|
|
(39)
|
TOTAL
DEFICIT
|
(7,805)
|
|
(18,850)
|
TOTAL LIABILITIES AND
DEFICIT
|
103,587
|
|
97,746
|
LightInTheBox
Holding Co., Ltd.
|
Unaudited
Condensed Consolidated Statements of Operations
|
(U.S. dollars in
thousands, except per share data, or otherwise
noted)
|
|
|
Three-month Period Ended
|
|
Nine-month Period Ended
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
Product
sales
|
42,910
|
|
58,139
|
|
160,942
|
|
165,039
|
Services and
others
|
1,593
|
|
1,752
|
|
9,058
|
|
3,867
|
Total
revenues
|
44,503
|
|
59,891
|
|
170,000
|
|
168,906
|
Cost of
revenues
|
|
|
|
|
|
|
|
Product
sales
|
(36,336)
|
|
(33,790)
|
|
(120,386)
|
|
(100,193)
|
Services and
others
|
(1,442)
|
|
(794)
|
|
(8,330)
|
|
(1,313)
|
Total cost of
revenues
|
(37,778)
|
|
(34,584)
|
|
(128,716)
|
|
(101,506)
|
Gross
profit
|
6,725
|
|
25,307
|
|
41,284
|
|
67,400
|
Operating
expenses
|
|
|
|
|
|
|
|
Fulfillment
|
(3,400)
|
|
(6,763)
|
|
(11,580)
|
|
(16,934)
|
Selling and
marketing
|
(11,316)
|
|
(12,440)
|
|
(38,712)
|
|
(33,232)
|
General and
administrative
|
(7,541)
|
|
(1,559)
|
|
(18,415)
|
|
(15,734)
|
Research and
development
|
(2,546)
|
|
(4,915)
|
|
(8,382)
|
|
(13,223)
|
Total operating
expenses
|
(24,803)
|
|
(25,677)
|
|
(77,089)
|
|
(79,123)
|
Loss from
operations
|
(18,078)
|
|
(370)
|
|
(35,805)
|
|
(11,723)
|
Exchange loss on
offshore bank accounts
|
20
|
|
—
|
|
(23)
|
|
—
|
Interest
income
|
205
|
|
49
|
|
432
|
|
246
|
Interest
expense
|
—
|
|
(13)
|
|
—
|
|
(51)
|
Change in fair value
of convertible promissory notes
|
—
|
|
10,347
|
|
—
|
|
(1,595)
|
Total other
income/(loss)
|
225
|
|
10,383
|
|
409
|
|
(1,400)
|
Income/(loss) before
income taxes and gain from
equity method investment
|
(17,853)
|
|
10,013
|
|
(35,396)
|
|
(13,123)
|
Income tax
expense
|
(3)
|
|
(19)
|
|
(6)
|
|
(439)
|
Gain/(loss) from
equity method investment
|
46
|
|
(20)
|
|
197
|
|
2,136
|
Net
income/(loss)
|
(17,810)
|
|
9,974
|
|
(35,205)
|
|
(11,426)
|
Less: Net
income/(loss) attributable to non-controlling
interests
|
|
|
(138)
|
|
—
|
|
(34)
|
Net income/(loss)
attributable to LightInTheBox
Holding Co., Ltd.
|
(17,810)
|
|
10,112
|
|
(35,205)
|
|
(11,392)
|
|
|
|
|
|
|
|
|
Weighted average
numbers of shares used in
calculating income/(loss) per ordinary
share
|
|
|
|
|
|
|
|
—Basic
|
133,278,934
|
|
134,694,173
|
|
134,070,694
|
|
134,586,488
|
—Diluted
|
133,278,934
|
|
223,577,289
|
|
134,070,694
|
|
134,586,488
|
|
|
|
|
|
|
|
|
Net income/(loss) per
ordinary share
|
|
|
|
|
|
|
|
—Basic
|
(0.13)
|
|
0.08
|
|
(0.26)
|
|
(0.08)
|
—Diluted
|
(0.13)
|
|
(0.00)
|
|
(0.26)
|
|
(0.08)
|
|
|
|
|
|
|
|
|
Net income/(loss) per
ADS (2 ordinary shares equal to
1 ADS)
|
|
|
|
|
|
|
|
—Basic
|
(0.27)
|
|
0.15
|
|
(0.53)
|
|
(0.17)
|
—Diluted
|
(0.27)
|
|
(0.00)
|
|
(0.53)
|
|
(0.17)
|
LightInTheBox
Holding Co., Ltd.
|
Unaudited
Reconciliations of GAAP and Non-GAAP Results
|
(U.S. dollars in
thousands, or otherwise noted)
|
|
|
Three-month Period Ended
|
|
Nine-month Period Ended
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
(17,810)
|
|
9,974
|
|
(35,205)
|
|
(11,426)
|
|
|
|
|
|
|
|
|
Less: Interest
income
|
205
|
|
49
|
|
432
|
|
246
|
Interest
expense
|
—
|
|
(13)
|
|
—
|
|
(51)
|
Income tax
expense
|
(3)
|
|
(19)
|
|
(6)
|
|
(439)
|
Depreciation and
amortization
|
(133)
|
|
(598)
|
|
(438)
|
|
(1,860)
|
EBITDA
|
(17,879)
|
|
10,555
|
|
(35,193)
|
|
(9,322)
|
|
|
|
|
|
|
|
|
Less: Share-based
compensation
|
(532)
|
|
(305)
|
|
(1,551)
|
|
(1,261)
|
Change in fair value
of convertible promissory
notes
|
—
|
|
10,347
|
|
—
|
|
(1,595)
|
Adjusted
EBITDA*
|
(17,347)
|
|
513
|
|
(33,642)
|
|
(6,466)
|
|
* Adjusted EBITDA
represents gain/(loss) from operations before share-based
compensation expense, change in fair value of
convertible promissory notes, interest income, interest expense,
income tax expense and depreciation and amortization
expenses.
|
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content:http://www.prnewswire.com/news-releases/lightinthebox-reports-third-quarter-2019-financial-results-300972125.html
SOURCE LightInTheBox Holding Co., Ltd.