BEIJING, Sept. 9, 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 second quarter ended
June 30, 2019.
Second Quarter 2019 Highlights
- Total revenues regained growth momentum increasing 4.9%
year-over-year to $58.1 million.
- Gross margin increased substantially to 41.9% from 25.4% in the
same quarter of 2018.
- Adjusted EBITDA[1] improved significantly and turned
positive, increasing to earnings of $0.9
million, compared with a loss of $8.9
million in the same quarter of 2018.
- Net loss narrowed to $7.3
million, compared with a net loss of $9.5 million in the same quarter of 2018. Net
loss included the impact from a $6.6
million non-operating loss due to the change in fair value
of the convertible promissory notes associated with the acquisition
of Ezbuy.
- Selling and marketing expenses as a percentage of total revenue
decreased to 19.8% from 20.4% in the same quarter of 2018.
Mr. Jian He, Chief Executive Officer of LightInTheBox,
commented, "I'm glad to report solid results which I
believe demonstrate just how effective our efforts over the past
few quarters have been in stabilizing and turning our business
around. Revenues during the quarter regained growth momentum by
increasing 4.9% year-over-year. Gross margin expanded significantly
to 41.9%, driven by a shift in product mix towards higher margin
products. More importantly, adjusted EBITDA turned positive,
increasing to earnings of $0.9
million compared to a loss of $8.9
million during the same period last year. We continue to cut
costs and are carefully investing in R&D in order to drive
future growth. Sales and marketing expenses as a percentage
of revenue also continued to trend downwards, decreasing to 19.8%
as our repeat purchase rate gradually increases. With our financial
and operational metrics improving since the acquisition of Ezbuy,
I'm fully confident that we have the right strategy in place to
build upon this momentum going forward."
[1] For a
discussion of the use of non-GAAP
financial measures, see "Non-GAAP Financial
Measures."
|
Second Quarter 2019 Financial Results
Total revenues increased by 4.9% year-over-year to
$58.1 million from $55.4 million in the same quarter of 2018.
Revenues from product sales were $57.1
million, compared with $52.0
million in the same quarter of 2018. Revenues from service
and others were $1.0 million,
compared with $3.4 million in the
same quarter of 2018.
The number of orders for product sales was 1.3 million in the
second quarter of 2019, compared with 0.9 million in the same
quarter of 2018. The number of customers for product sales was 0.8
million for the second 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 second
quarter of 2019, compared with $18.7
million in the same quarter of 2018. As a percentage of
product sales, apparel revenues accounted for 35.6% in the second
quarter of 2019, compared with 36.0% in the same quarter of 2018.
Product sales from other general merchandise were $36.8 million in the second quarter of
2019.
Total cost of revenues was $33.8
million in the second quarter of 2019, compared with
$41.4 million in the same quarter of
2018. Cost for product sales was $33.6
million in the second quarter of 2019, compared with
$38.2 million in the same quarter of
2018. Cost for service and others was $0.2
million in the second quarter of 2019, compared with
$3.2 million in the same quarter of
2018.
Gross profit in the second quarter of 2019 was
$24.4 million, compared with
$14.0 million in the same quarter of
2018. Gross margin was 41.9% in the second quarter of 2019,
compared with 25.4% in the same quarter of 2018. The increase in
gross margin was a result of the Company's shift in product mix
towards higher margin products.
Total operating expenses in the second quarter of 2019
were $26.9 million, compared with
$23.7 million in the same quarter of
2018.
- Fulfillment expenses in the second quarter of 2019 were
$4.9 million, compared with
$3.7 million in the same quarter of
2018. As a percentage of total revenues, fulfillment expenses were
8.4% in the second quarter of 2019, compared to 6.7% in the same
quarter of 2018 and 10.2% in the first quarter of 2019.
- Selling and marketing expenses in the second quarter of
2019 were $11.5 million, compared
with $11.3 million in the same
quarter of 2018. As a percentage of total revenues, selling and
marketing expenses were 19.8% for the second quarter of 2019,
compared to 20.4% in the same quarter of 2018 and 18.3% in the
first quarter of 2019.
- General and administrative (G&A) expenses in the
second quarter of 2019 were $6.4
million, compared with $5.9
million in the same quarter of 2018. As a percentage of
total revenues, G&A expenses were 11.0% for the second quarter
of 2019, compared with 10.6% in the same quarter of 2018 and 15.3%
in the first quarter of 2019.
- Research and development (R&D) expenses in the
second quarter of 2019 were $4.1
million, compared with $2.8
million in the same quarter of 2018. As a percentage of
total revenues, R&D expenses represented 7.1% for the second
quarter of 2019, compared with 5.1% in the same quarter of 2018 and
8.3% in the first quarter of 2019.
Gain from equity method investment was $2.0 million in the second quarter of 2019,
compared with $0.1 million in the
same quarter of 2018. The $2.0
million of gain in the second quarter of 2019 was derived
from the disposal of the equity investment in Demon Network Tech
Co., Ltd. The disposal allows the Company to focus more on
operating the cross-border platform.
Loss from operations was $2.6
million in the second quarter of 2019, compared with a loss
from operations of $9.7 million in
the same quarter of 2018.
Net loss was $7.3 million
in the second quarter of 2019, compared with a net loss of
$9.5 million in the same quarter of
2018. Net loss included the impact from a $6.6 million non-operating loss due to the change
in fair value of the convertible promissory notes associated with
the acquisition of Ezbuy.
Net loss per American Depository Share ("ADS") was
$0.11 in the second quarter of 2019,
compared with net loss per ADS of $0.14 in the same quarter of 2018. Each ADS
represents two ordinary shares.
In the second quarter of 2019, the Company's weighted average
number of ADSs used in computing the loss per ADS was
67,302,278.
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 a gain of $0.9 million
in the second quarter of 2019, compared with a loss of $8.9 million in the same quarter of 2018.
As of June 30, 2019, the Company
had cash and cash equivalents and restricted cash of $29.4 million, compared with $30.3 million as of March
31, 2019.
Business outlook
For the third quarter of 2019, based on current information
available to the Company and business seasonality, the Company
expects net revenues to be between $58
million and $61 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 June
30,2019 was $1.22 and
$1.48 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 loss arising from change in fair value of the convertible
promissory notes of $6.6 million in
the second 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.
Potential impact on adoption of ASC 606 – revenue from
contracts with customers
The Company is in the process of assessing on the announcement
of ASC 606 – revenue from contracts with customers, principal
versus agent considerations for one of the business lines of Ezbuy,
which was acquired by the Company on December 10, 2018. In the second quarter and the
first quarter of 2019, the Company recognized revenue of
$5.5 million and $5.9 million on gross basis, respectively. If
this revenue does not meet the criteria under gross basis, it will
be recorded under net basis and accordingly, both total revenues
and total cost of revenues will decrease by $4.0 million and $4.3
million for the second quarter and the first quarter of
2019, respectively.
Conference Call
The Company will hold a conference call at 8:00 a.m. Eastern Time on September 9, 2019 to discuss its financial
results and operating performance for the second quarter 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:
|
1383609
|
A telephone replay will be available two hours after the
conclusion of the conference call through September 16, 2019. The dial-in details are:
US:
|
+1-646-254-3697
|
Hong Kong:
|
+852-3051-2780
|
International:
|
+61-2-8199-0299
|
Passcode:
|
1383609
|
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 company that delivers
products directly from manufacturers to its customers around the
world. The Company offers customers a convenient way to shop for a
wide selection of products at attractive prices through its
platforms at 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
Phone: +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 June 30,
|
|
|
2018
|
|
2019
|
ASSETS
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
38,808
|
|
28,752
|
Restricted
cash
|
|
994
|
|
646
|
Accounts receivable,
net of allowance for doubtful
accounts
|
|
1,463
|
|
1,926
|
Amounts due from
related parties
|
|
-
|
|
4,398
|
Inventories
|
|
8,481
|
|
7,326
|
Prepaid expenses and
other current assets
|
|
5,811
|
|
3,847
|
Total current
assets
|
|
55,557
|
|
46,895
|
Property and
equipment, net
|
|
3,652
|
|
3,269
|
Intangible assets,
net
|
|
9,890
|
|
9,290
|
Goodwill
|
|
28,169
|
|
28,169
|
Operating lease
right-of-use assets, net
|
|
-
|
|
6,318
|
Long-term rental
deposits
|
|
1,131
|
|
864
|
Long-term
investments
|
|
5,188
|
|
2,913
|
TOTAL
ASSETS
|
|
103,587
|
|
97,718
|
|
|
|
|
|
LIABILITIES AND
DEFICIT
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable
|
|
12,941
|
|
12,885
|
Amounts due to
related parties
|
|
4,953
|
|
1,211
|
Convertible
promissory notes
|
|
51,922
|
|
63,864
|
Advance from
customers
|
|
17,732
|
|
18,162
|
Current operating
lease liabilities
|
|
-
|
|
3,326
|
Income tax
payable
|
|
26
|
|
211
|
Accrued expenses and
other current liabilities
|
|
22,662
|
|
23,308
|
Total current
liabilities
|
|
110,236
|
|
122,967
|
|
|
|
|
|
Non-current operating
lease liabilities
|
|
-
|
|
997
|
Non-current finance
lease liabilities
|
|
1,156
|
|
2,893
|
TOTAL
LIABILITIES
|
|
111,392
|
|
126,857
|
|
|
|
|
|
DEFICIT
|
|
|
|
|
Ordinary
shares
|
|
11
|
|
11
|
Additional paid-in
capital
|
|
239,269
|
|
240,225
|
Treasury shares, at
cost
|
|
(27,261)
|
|
(27,261)
|
Accumulated other
comprehensive loss
|
|
(932)
|
|
(1,822)
|
Accumulated
deficit
|
|
(218,887)
|
|
(240,391)
|
Non-controlling
interests
|
|
(5)
|
|
99
|
TOTAL
DEFICIT
|
|
(7,805)
|
|
(29,139)
|
TOTAL LIABILITIES AND
DEFICIT
|
|
103,587
|
|
97,718
|
|
|
|
|
|
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
|
|
Six-month Period Ended
|
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
2018
|
|
2019
|
2018
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
|
|
Product
sales
|
|
52,064
|
|
57,111
|
|
118,032
|
|
106,900
|
|
Services and
others
|
|
3,379
|
|
1,031
|
|
7,465
|
|
2,115
|
|
Total
revenues
|
|
55,443
|
|
58,142
|
|
125,497
|
|
109,015
|
|
Cost of
revenues
|
|
|
|
|
|
|
|
|
|
Product
sales
|
|
(38,160)
|
|
(33,618)
|
|
(84,050)
|
|
(66,403)
|
|
Services and
others
|
|
(3,210)
|
|
(162)
|
|
(6,888)
|
|
(519)
|
|
Total Cost of
revenues
|
|
(41,370)
|
|
(33,780)
|
|
(90,938)
|
|
(66,922)
|
|
Gross
profit
|
|
14,073
|
|
24,362
|
|
34,559
|
|
42,093
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Fulfillment
|
|
(3,700)
|
|
(4,906)
|
|
(8,180)
|
|
(10,171)
|
|
Selling and
marketing
|
|
(11,318)
|
|
(11,523)
|
|
(27,396)
|
|
(20,792)
|
|
General and
administrative
|
|
(5,889)
|
|
(6,371)
|
|
(10,874)
|
|
(14,175)
|
|
Research and
development
|
|
(2,822)
|
|
(4,128)
|
|
(5,836)
|
|
(8,308)
|
|
Total operating
expenses
|
|
(23,729)
|
|
(26,928)
|
|
(52,286)
|
|
(53,446)
|
|
Loss from
operations
|
|
(9,656)
|
|
(2,566)
|
|
(17,727)
|
|
(11,353)
|
|
Exchange loss on
offshore bank accounts
|
|
14
|
|
-
|
|
(43)
|
|
-
|
|
Interest
income
|
|
9
|
|
74
|
|
227
|
|
197
|
|
Interest
expense
|
|
-
|
|
(18)
|
|
-
|
|
(38)
|
|
Change in fair value
of convertible promissory notes
|
|
-
|
|
(6,605)
|
|
-
|
|
(11,942)
|
|
Total other income /
(loss)
|
|
23
|
|
(6,549)
|
|
184
|
|
(11,783)
|
|
Loss before income
taxes and gain from equity method
investment
|
|
(9,633)
|
|
(9,115)
|
|
(17,543)
|
|
(23,136)
|
|
Income tax
expense
|
|
(1)
|
|
(204)
|
|
(3)
|
|
(420)
|
|
Gain from equity
method investment
|
|
92
|
|
2,029
|
|
151
|
|
2,156
|
|
Net
loss
|
|
(9,542)
|
|
(7,290)
|
|
(17,395)
|
|
(21,400)
|
|
Less: Net income
attributable to non-controlling interests
|
|
-
|
|
72
|
|
-
|
|
104
|
|
Net loss attributable
to LightInTheBox Holding Co., Ltd.
|
|
(9,542)
|
|
(7,362)
|
|
(17,395)
|
|
(21,504)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
numbers of shares used in calculating
loss per ordinary share
|
|
|
|
|
|
|
|
|
|
—Basic
|
|
133,293,041
|
|
134,604,556
|
|
133,679,564
|
|
134,531,762
|
|
—Diluted
|
|
133,293,041
|
|
134,604,556
|
|
133,679,564
|
|
134,531,762
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per ordinary
share
|
|
|
|
|
|
|
|
|
|
—Basic
|
|
(0.07)
|
|
(0.05)
|
|
(0.13)
|
|
(0.16)
|
|
—Diluted
|
|
(0.07)
|
|
(0.05)
|
|
(0.13)
|
|
(0.16)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per ADS (2
ordinary shares equal to 1 ADS)
|
|
|
|
|
|
|
|
|
|
—Basic
|
|
(0.14)
|
|
(0.11)
|
|
(0.26)
|
|
(0.32)
|
|
—Diluted
|
|
(0.14)
|
|
(0.11)
|
|
(0.26)
|
|
(0.32)
|
|
|
|
|
|
|
|
|
|
|
|
LightInTheBox
Holding Co., Ltd.
|
Unaudited
Reconciliations of GAAP and Non-GAAP Results
|
(U.S. dollars in
thousands, or otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
Three-month Period Ended
|
|
Six-month Period Ended
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
2018
|
|
2019
|
2018
|
|
2019
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(9,542)
|
|
(7,290)
|
|
(17,395)
|
|
(21,400)
|
|
|
|
|
|
|
|
|
|
Less: Interest
income
|
|
9
|
|
74
|
|
227
|
|
197
|
Interest expense
|
|
-
|
|
(18)
|
|
-
|
|
(38)
|
Income tax expense
|
|
(1)
|
|
(204)
|
|
(3)
|
|
(420)
|
Depreciation and amortization
|
|
(153)
|
|
(634)
|
|
(306)
|
|
(1,262)
|
EBITDA
|
|
(9,397)
|
|
(6,508)
|
|
(17,313)
|
|
(19,877)
|
|
|
|
|
|
|
|
|
|
Less: Share-based
compensation
|
|
(514)
|
|
(799)
|
|
(1,019)
|
|
(956)
|
Change in fair value of convertible promissory notes
|
|
-
|
|
(6,605)
|
|
-
|
|
(11,942)
|
Adjusted
EBITDA*
|
|
(8,883)
|
|
896
|
|
(16,294)
|
|
(6,979)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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.
|
View original
content:http://www.prnewswire.com/news-releases/lightinthebox-reports-second-quarter-2019-financial-results-300913947.html
SOURCE LightInTheBox Holding Co., Ltd.