ECMOHO Limited (Nasdaq: MOHO) (“ECMOHO” or the “Company”), a
leading integrated solutions provider in the non-medical health and
wellness market in China, today announced its audited financial
results for the fiscal year ended December 31, 2020.
Fourth Quarter 2020
Highlights
- Total net
revenue was US$71.9 million for the fourth quarter of 2020.
- Gross margin for
the fourth quarter of 2020 was 25%, compared to 17% for the fourth
quarter of 2019.
- The number of
cumulative paying consumers1 was 10.9 million as of December 31,
2020 as compared to 8.2 million as of December 31, 2019.
- Repeat purchase
rate2 reached 37.1% in the year ended December 31, 2020 as compared
to 35% in the year ended December 31, 2019.
1 “Cumulative paying consumers” refers to the
customers that have placed one or more orders purchasing products
through our self-operated flagship stores on third-party e-commerce
platforms, the Company's channels on Douyin.
2 “Repeat purchase rate” refers to the percentage
of paying consumers in the period indicated who had made more than
one purchase with us in such period or in prior periods.
“As a result of our continued efforts to optimize
our brand portfolios and improve operating efficiency, we are
thrilled to report sequentially improved fourth quarter and
full-year results,” said Ms. Zoe Wang, co-founder and Chief
Executive Officer of ECMOHO Limited. “We believe ECMOHO is poised
to benefit from the rising penetration of our online health and
wellness products, taking full advantage of the tremendous
structural growth opportunities within the health and wellness
industry. We are well-positioned to capture the growth potential of
shopping platform channel diversification such as Douyin, Kuai
Shou, and PDD.”
Mr. Leo Zeng, Chief Operating Officer and Acting
Chief Financial Officer, commented, “We are pleased to report
positive operating cash flow in 2020. Our total cash conversion
days have further decreased in the fourth quarter, reflecting a
healthy and stable working capital position while meeting our
stated guidance from last quarter. Our gross margin has
significantly improved compared to a year ago due to our operating
efficiency improvement strategy. Going forward, we intend on
focusing our efforts to further executing our key business
initiatives and providing high quality products that will fuel
further margin growth for our Company.”
Full Year 2020 Financial
Results
Total net revenues were
US$304.9 million in 2020, compared to US$329.5 million in 2019.
Cost of revenues were US$246.3
million in 2020, compared to US$257.4 million in 2019.
Operating expenses were US$72.3
million in 2020, as compared with US$67.5 million in 2019.
Operating expenses represented 23.7% of net revenues in 2020,
compared with 20.5% of net revenues in 2019.
-
Fulfillment expenses were US$14.4 million in 2020,
compared to US$17.0 million in 2019. The decrease was primarily due
to a 19.3% decrease in logistic expense as we experienced a
decrease in the number of product shipments in line with our
decreased revenues in 2020 and lower unit expenses that we paid to
third-party logistics providers. As a percentage of total net
revenues, our fulfillment expenses decreased from 5.2% in 2019 to
4.7% in 2020.
- Sales
and marketing expenses were US$45.8 million in 2020,
compared to US$40.2 million in 2019. The increase was primarily due
to an increase in advertising costs as we launched more promotional
events to market our products. As a percentage of total net
revenues, our sales and marketing expenses increased from 12.2% in
2019 to 15.0% in 2020.
- General
and administrative expenses were US$11.0 million in 2020,
compared to US$8.5 million in 2019. The increase was primarily due
to higher professional service fees post IPO, such as audit fee,
legal fee and insurance expense. As a percentage of total net
revenues, our general and administrative expenses increased from
2.6% in 2019 to 3.6% in 2020.
-
Research and development expenses were US$1.0
million in 2020, compared to US$1.8 million in 2019. The decrease
was primarily due to a reduced headcount in the R&D department
in the period.
Operating loss was US$13.7
million in 2020, as compared to operating income of US$4.6 million
in 2019.
Non-GAAP operating loss was
US$13.2 million in 2020, compared with Non-GAAP operating income of
US$6.2 million in 2019.
Net loss was US$13.5 million in
2020, compared with net income of US$1.9 million in 2019.
Non-GAAP net loss was US$13.0
million in 2020, compared with Non-GAAP net income of US$3.5
million in 2019.
Balance Sheet and Cash Flow
As of December 31, 2020, the Company had
US$45.28 million in cash, cash equivalents and restricted cash. Our
operating cash flow was US$21.60 million, which turned to positive
in 2020, compared to negative in 2019. Inventories as of December
31, 2020 decreased by 29% from September 30, 2020, as the company
committed to improve the efficiency of inventory and cash flow
management.
Use of Non-GAAP Financial
Measures
The Company uses non-GAAP financial measures in
evaluating its business. For example, the Company uses non-GAAP
income (loss) from operations, non-GAAP operating margin, non-GAAP
net income (loss), non-GAAP net margin, non-GAAP net income (loss)
attributable to ordinary shareholders of ECMOHO
Limited and non-GAAP net income (loss) attributable to
ordinary shareholders of ECMOHO Limited per ADS, as
supplemental measures to review and assess its financial and
operating performance.
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. Non-GAAP income (loss) from operations
is income (loss) from operations excluding the impact of
share-based compensation expenses. Non-GAAP operating margin is
non-GAAP income from operations as a percentage of total net
revenues. Non-GAAP net income (loss) is net income (loss) excluding
the impact of share-based compensation expenses. Non-GAAP net
margin is non-GAAP net income as a percentage of total net
revenues. Non-GAAP net income (loss) attributable to ordinary
shareholders of ECMOHO Limited is net income (loss)
attributable to ordinary shareholders of ECMOHO Limited excluding
the impact of share-based compensation expenses. Non-GAAP net
income (loss) attributable to ordinary shareholders of ECMOHO
Limited per ADS is non-GAAP net income (loss) attributable to
ordinary shareholders of ECMOHO Limited divided by weighted
average number of shares used in calculating net income (loss) per
ordinary share multiplied by four.
The Company presents the non-GAAP financial
measures because they are used by the Company’s management to
evaluate the Company’s financial and operating performance and
formulate business plans. Non-GAAP income (loss) from operations
and non-GAAP net income (loss) enable the Company’s management to
assess the Company’s financial and operating results without
considering the impact of share-based compensation expenses. The
Company also believes that the use of the non-GAAP measures
facilitates investors’ assessment of the Company’s financial and
operating performance.
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 (loss)
from operations, non-GAAP net income (loss), non-GAAP net income
(loss) attributable to ordinary shareholders of ECMOHO
Limited, and non-GAAP net income (loss) attributable to ordinary
shareholders of ECMOHO Limited per ADS is that they do
not reflect all items of income and expense that affect the
Company’s operations. Share-based compensation expenses have been
and may continue to be incurred in the Company’s business and is
not reflected in the presentation of non-GAAP income (loss) from
operations and non-GAAP net income (loss). Further, the non-GAAP
measures may differ from the non-GAAP measures used by other
companies, including peer companies, and therefore their
comparability may be limited. In light of the foregoing
limitations, the non-GAAP income (loss) from operations, non-GAAP
operating margin, non-GAAP net income (loss), non-GAAP net margin,
non-GAAP net income (loss) attributable to ordinary shareholders
of ECMOHO Limited and non-GAAP net income (loss)
attributable to ordinary shareholders of ECMOHO
Limited per ADS for the period should not be considered in
isolation from or as an alternative to income (loss) from
operations, operating margin, net income (loss), net margin, net
income (loss) attributable to ordinary shareholders of ECMOHO
Limited and net income (loss) attributable to ordinary
shareholders of ECMOHO Limited per ADS, or other
financial measures prepared in accordance with U.S. GAAP.
The Company compensates for these limitations by
reconciling the non-GAAP financial measures to the nearest U.S.
GAAP performance measures, which should be considered when
evaluating the Company’s performance. For reconciliations of these
non-GAAP financial measures to the most directly comparable GAAP
financial measures, please see the section of the accompanying
tables titled “Reconciliations of GAAP and Non-GAAP Results.”
All quarterly results referred to in the text,
tables and attachments to this press release are unaudited.
Recent Developments
On April 27, 2021, Ms. Grace Fu was appointed as
a successor independent director to serve on the board of directors
(the “Board”) of ECMOHO, replacing Dr. Rachel Sang, effective April
27, 2021. Dr. Rachel Sang resigned from her position as an
independent director of the Company, effective on the same date.
Ms. Fu also replaced Dr. Sang as a member of the audit committee of
the Board, a member of the compensation committee of the Board and
the chair and a member of the nominating and corporate governance
committee of the Board. Dr. Sang’s resignation was for personal
reasons, which did not result from any disagreement with the
Company on any matter relating to the Company’s operations,
policies or practice.
ECMOHO filed its annual report on Form 20-F (the
“Annual Report”) for the fiscal year ended December 31, 2020 with
the U.S. Securities and Exchange Commission (the “SEC”) on April
30, 2021. The Annual Report can be accessed on the Company’s
investor relations website at https://ir.ecmoho.com/ and on the the
SEC’s website at https://www.sec.gov/. The Company will provide a
hard copy of the Annual Report containing the audited consolidated
financial statements, free of charge, to its shareholders and ADS
holders upon request. Requests should be directed to the Company’s
Investor Relations Department at ir@ecmoho.com.
Exchange Rate Information
This press release contains translations of
certain Renminbi amounts into U.S. dollars at specified rates
solely for the convenience of readers. The exchange rate used for
translation at December 31, 2020 was US$1.00 = RMB6.5249
representing the index rates stipulated by the People’s Bank of
China.
The Company makes no representation that the
Renminbi or U.S. dollar amounts referred could be converted into
U.S. dollar or Renminbi, as the case may be, at any particular rate
or at all.
Safe Harbor Statements
This news release contains 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,” “going forward,” “outlook” and
similar statements. For example, the Company’s statements about its
expectations for Company performance in 2020, its strategy and
industry outlook are forward-looking statements and are inherently
uncertain. 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, such as the significant volatility and
disruption caused by the COVID-19 pandemic, the Company’s expected
growth of the online retail industry in China, the Company’s
expectations regarding demand for and market acceptance of its
products and services, the Company’s expectations regarding its
relationships with its brand partners and e-commerce channels, and
the level of consumer economic activity in China, all of which are
difficult to predict and many of which are beyond the Company's
control, which may cause the Company's actual results, performance
or achievements to differ materially from those in the
forward-looking statements. 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. The
Company 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 ECMOHO Ltd.
ECMOHO is a leading integrated solution provider
in the non-medical health and wellness market in China. The Company
acts as the bridge between brand owners and Chinese consumers by
marketing and distributing health supplements and food, mother and
child care products, personal care products, household healthcare
equipment and other health and wellness products. Through over
eight years of operation, ECMOHO has built an ecosystem where
Chinese consumers are provided with customized health and wellness
solutions that include quality products and trustworthy
content.
For more information, please visit
http://ir.ecmoho.com/.
For investor and media inquiries, please
contact:
ECMOHO Ltd.Investor
RelationsEmail: IR@ecmoho.com
ECMOHO LIMITED
CONSOLIDATED BALANCE SHEETS(In thousands
of U.S. dollars)
|
As of December 31,2019 |
|
As of December 31,2020 |
|
US$ |
|
US$ |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
49,099 |
|
|
45,284 |
|
Restricted cashAccounts receivable, net |
2,000 49,829 |
|
|
- 42,006 |
|
Inventories, net |
49,895 |
|
|
33,263 |
|
Prepayments and other current assets |
21,366 |
|
|
9,200 |
|
Loan receivable |
- |
|
|
646 |
|
Total current assets |
172,189 |
|
|
130,399 |
|
Property and equipment, net |
1,429 |
|
|
967 |
|
Intangible assets |
1,312 |
|
|
565 |
|
Operating lease right-of-use assets |
1,204 |
|
|
2,434 |
|
Long-term investments |
- |
|
|
5,904 |
|
Deferred tax assets, net |
787 |
|
|
829 |
|
Other non-current assets |
1,539 |
|
|
1,530 |
|
Total assets |
178,460 |
|
|
142,628 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Short-term borrowings |
34,516 |
|
|
16,943 |
|
Accounts payable |
26,439 |
|
|
24,191 |
|
Amounts due to related parties |
16,233 |
|
|
9,401 |
|
Advances from customers |
1,043 |
|
|
731 |
|
Operating lease liabilities, current |
1,052 |
|
|
411 |
|
Salary and welfare payable |
719 |
|
|
821 |
|
Tax payable |
3,043 |
|
|
3,574 |
|
Accrued liabilities and other current liabilities |
10,517 |
|
|
5,039 |
|
Total current liabilities |
93,562 |
|
|
61,111 |
|
Deferred taxes liabilities |
139 |
|
|
24 |
|
Operating lease liabilities, non-current |
69 |
|
|
1,939 |
|
Total liabilities |
93,770 |
|
|
63,074 |
|
|
|
|
|
Shareholders’ equity: |
|
|
|
Class A Ordinary Shares, US$ 0.00001 par value |
1 |
|
|
1 |
|
Class B Ordinary Shares, US$ 0.00001 par value |
1 |
|
|
1 |
|
Additional paid-in capital |
105,944 |
|
|
108,370 |
|
Accumulated other comprehensive (loss) income |
(2,265) |
|
|
4,037 |
|
Accumulated deficit |
(19,556) |
|
|
(32,855) |
|
Total ECMOHO Limited shareholders’ equity |
84,125 |
|
|
79,554 |
|
Non-controlling interests |
565 |
|
|
- |
|
Total shareholders’ equity |
84,690 |
|
|
79,554 |
|
Total liabilities and shareholders’ equity |
178,460 |
|
|
142,628 |
|
ECMOHO LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands of U.S. dollars, except for share and
per ADS data)
|
|
For The Years Ended |
|
|
December 31, |
|
December 31, |
|
|
2019 |
|
|
2020 |
|
|
|
US$ |
|
US$ |
Total net revenues |
|
329,480 |
|
|
304,939 |
|
Total cost of revenue |
|
(257,431) |
|
|
(246,300) |
|
Gross profit |
|
72,049 |
|
|
58,639 |
|
Operating expenses(1): |
|
|
|
|
Fulfillment expenses |
|
(16,957) |
|
|
(14,399) |
|
Sales and marketing expenses |
|
(40,206) |
|
|
(45,754) |
|
General and administrative expenses |
|
(8,497) |
|
|
(11,037) |
|
Research and development expenses |
|
(1,808) |
|
|
(1,106) |
|
Other operating income |
|
35 |
|
|
- |
|
Total operating expenses |
|
(67,433) |
|
|
(72,296) |
|
Operating income (loss) |
|
4,616 |
|
|
(13,657) |
|
Finance expense, net |
|
(2,514) |
|
|
(2,615) |
|
Foreign exchange (loss) gain, net |
|
(393) |
|
|
979 |
|
Other income, net |
|
475 |
|
|
1,800 |
|
Income (loss) before income tax expenses |
|
2,184 |
|
|
(13,493) |
|
Income taxes (expenses) benefits |
|
(250) |
|
|
7 |
|
Net income (loss) |
|
1,934 |
|
|
(13,486) |
|
Less: Net loss attributable to the non-controlling interest
shareholders and redeemable non-controlling interest
shareholders |
|
(362) |
|
|
(186) |
|
Net income (loss) attributable to ECMOHO
Limited |
|
2,296 |
|
|
(13,300) |
|
Less: Accretion on Series A convertible redeemable preferred shares
to redemption value |
|
(1,022) |
|
|
- |
|
Less: Accretion to redemption value of redeemable non-controlling
interests |
|
(312) |
|
|
- |
|
Net income (loss) attributable to ECMOHO Limited’s ordinary
shareholders |
|
962 |
|
|
(13,300) |
|
|
|
|
|
|
Net earnings (loss) per share attributable to ECMOHO
Limited’s ordinary shareholders |
|
|
|
|
—basic |
|
0.01 |
|
|
(0.10) |
|
—diluted |
|
0.01 |
|
|
(0.10) |
|
|
|
|
|
|
Net earnings (loss) per ADS attributable to ECMOHO
Limited’s ordinary shareholders |
|
|
|
|
—basic |
|
0.04 |
|
|
(0.38) |
|
—diluted |
|
0.03 |
|
|
(0.38) |
|
|
|
|
|
|
Weighted average number of Ordinary Shares |
|
|
|
|
—basic |
|
98,104,216 |
|
|
139,619,496 |
|
—diluted |
|
115,644,864 |
|
|
139,619,496 |
|
|
|
|
|
|
(1)Share-based compensation expenses are
allocated in operating expenses items as follows:
|
For The Years Ended |
|
December 31, |
|
December 31, |
|
2019 |
|
2020 |
|
US$ |
|
US$ |
|
|
|
|
Fulfillment expenses |
3 |
|
41 |
Sales and marketing expenses |
366 |
|
193 |
General and administrative expenses |
1,198 |
|
212 |
Research and development expenses |
8 |
|
29 |
Total Share-based compensation expenses |
1,575 |
|
475 |
ECMOHO LIMITED
Reconciliations of GAAP and Non-GAAP
Results(In thousands of U.S. dollars,
except for share and per ADS
data)
|
|
For The Years Ended |
|
|
December 31, |
|
December 31, |
|
|
2019 |
|
2020 |
|
|
|
US$ |
|
US$ |
|
|
|
|
|
Operating income (loss) |
|
4,616 |
|
(13,656) |
|
Add: Share-based compensation expenses |
|
1,575 |
|
475 |
|
Non-GAAP Operating income (loss) |
|
6,191 |
|
(13,181) |
|
|
|
|
|
|
Net income (loss) |
|
1,934 |
|
(13,486) |
|
Add: Share-based compensation expenses |
|
1,575 |
|
475 |
|
Non-GAAP Net income (loss) |
|
3,509 |
|
(13,011) |
|
|
|
|
|
|
Net income (loss) attributable to ECMOHO Limited’s ordinary
shareholders |
|
962 |
|
(13,300) |
|
Add: Share-based compensation expenses |
|
1,575 |
|
475 |
|
Non-GAAP Net income (loss) attributable to ECMOHO Limited’s
ordinary shareholders |
|
2,537 |
|
(12,825) |
|
Non-GAAP net earnings (loss) per ADS attributable to ECMOHO
Limited’s ordinary shareholders |
|
|
|
|
—basic |
|
0.10 |
|
(0.37) |
|
—diluted |
|
0.09 |
|
(0.37) |
|
|
|
|
|
|
Weighted average number of Ordinary Shares |
|
|
|
|
—basic |
|
98,104,216 |
|
139,619,496 |
|
—diluted |
|
115,644,864 |
|
139,619,496 |
|
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