GUANGZHOU, China, May 14, 2012 /PRNewswire-Asia/ -- Vipshop
Holdings Limited (NYSE: VIPS) ("Vipshop" or the "Company"),
China's leading online discount
retailer for brands, today announced its unaudited financial
results for the quarter ended March 31,
2012.
First Quarter 2012 Highlights
- Net revenues for the first quarter of 2012 increased by 250.7%
year-over-year to US$101.3 million,
primarily attributable to a 247.2% increase in the number of active
customers(1) to 1.0 million and a 276.4% increase in total
orders(2) to 3.1 million.
- Gross margin increased to 21.2% from 17.0% in the prior year
period and 20.0% in the fourth quarter of 2011.
- Net loss was US$8.6 million
compared to US$6.7 million in the
prior year period. Net loss margin improved to 8.5% from 23.2% in
the prior year period and 60.4% in the fourth quarter of 2011.
- Non-GAAP loss from operations(3) was US$6.6 million compared to US$4.2 million in the prior year period. Non-GAAP
operating loss margin improved to 6.5% from 14.6% in the prior year
period and 10.6% in the fourth quarter of 2011.
Mr. Eric Shen, Chairman and CEO
of Vipshop, stated, "We are excited to report our first quarter
2012 financial results that reflect our continued strong growth
momentum and increasing operational efficiencies. Despite the first
quarter typically being our seasonally weakest quarter, we not only
grew our net revenue by 250.7% year-over-year, but also expanded
gross margin to 21.2%. We believe these results attest to both the
sustainability of our model and our superior operational expertise
and execution capabilities. By offering our consumers great savings
on popular brands and our brand partners an effective means of
monetizing excess inventory, we are confident in our ability to
deliver strong returns for our shareholders over the long
term."
Mr. Donghao Yang, CFO of Vipshop,
commented, "In addition to strong top-line growth, we also remain
focused on leveraging our brand, scale and market leadership to
further enhance our gross and operating margins. Sequentially, we
achieved increased operating leverage, as demonstrated by our
continued gross and operating margin improvements. In particular,
we continued to decrease fulfillment expenses as a percentage of
net revenues to 16.7%. This was primarily due to new capacity
ramp-up in our four warehouses and a continued shift to lower-cost
local couriers from national couriers for order fulfillment.
Overall, we are confident that our dual focus on growth and
efficiency will lead to stronger shareholder returns as well as
customer and brand partner loyalty."
First Quarter 2012 Financial Results
NET REVENUES
Net revenues for the first quarter of 2012 increased by 250.7%
to US$101.3 million from US$28.9 million in the first quarter of 2011,
primarily driven by growth in the number of active customers and
total orders.
The number of active customers for the first quarter of 2012
increased by 247.2% to 1.0 million from approximately 300,000 in
the prior year period. The number of total orders for the first
quarter of 2012 increased by 276.4% to 3.1 million from
approximately 800,000 in the prior year period. This increase
was primarily due to the Company's continued efforts to optimize
product selection, increase the number of sales events and increase
the number of SKUs available on its website. In addition, recent
regional warehouse expansion to Shanghai, Chengdu and Beijing also provided the Company with the
ability to accommodate such growth.
GROSS PROFIT
Gross profit increased by 335.3% to US$21.4 million from US$4.9 million in the prior year period. This
reflects both the significant increase in net revenues as well as
continued margin expansion. Gross margin increased to 21.2% from
17.0% in the prior year period and 20.0% in the fourth quarter of
2011. This is attributable to the Company's increased bargaining
power with its suppliers due to the Company's increased scale.
OPERATING EXPENSES
Total operating expenses increased by 158.7% to US$30.1 million from US$11.6 million in the prior year period. As a
percentage of net revenues, total operating expenses decreased to
29.7% from 40.3% in the prior year period and 80.3% in the fourth
quarter of 2011.
- Fulfillment expenses increased by 180.1% to
US$16.9 million for the first quarter
of 2012 from US$6.0 million in the
prior year period, primarily reflecting the increase in sales
volume and number of orders fulfilled. As a percentage of net
revenues, fulfillment expenses decreased to 16.7% from 20.9% in the
prior year period and 18.6% in the fourth quarter of 2011, which
reflects the Company's ability to attain economies of scale as well
as its shift towards using regional delivery services and capacity
expansion of regional warehouses.
- Marketing expenses increased to US$5.9 million from US$1.7
million in the prior year period. As a percentage of net
revenues, marketing expenses remained stable at 5.8% compared to
5.7% in the prior year period and was down from 6.4% in the fourth
quarter of 2011, demonstrating the Company's ability to control
marketing expenses and leverage word-of-mouth advertising.
- Technology and content expenses increased to
US$2.4 million from US$493,883 in the prior year period, primarily
reflecting the Company's continued efforts to invest in its website
and IT system to better support future growth. As a percentage of
net revenues, technology and content expenses were 2.4% compared to
1.7% in the prior year period and 2.8% in the fourth quarter of
2011.
- General and administrative expenses increased to
US$5.8 million from US$3.5 million in the prior year period. As a
percentage of net revenues, general and administrative expenses
decreased to 5.7% from 12.2% in the prior year period and 52.8% in
the fourth quarter of 2011, primarily due to decreased share-based
compensation charges compared to the prior year period.
Loss from operations(3) was US$8.7
million compared to a loss from operations of US$6.7 million in the prior year period
reflecting the growing scale of the Company's operations. Operating
loss margin improved to 8.6% from 23.2% in the prior year period
and 60.3% in the fourth quarter of 2011.
Non-GAAP loss from operations(3), which excludes the impact of
share-based compensation expense, was US$6.6
million compared to US$4.2
million in the prior year period. Non-GAAP operating loss
margin improved to 6.5% from 14.6% in the prior year period and
10.6% in the fourth quarter of 2011.
NET LOSS
Net loss was US$8.6 million
compared to US$6.7 million in the
first quarter of 2011. Net loss margin improved to 8.5% from 23.2%
in the prior year period and from 60.4% from the fourth quarter of
2011. Net loss per diluted ADS(4) was US$0.33 compared to US$2.40 in the prior year period. Net loss
attributable to ordinary shareholders was US$8.6 million, compared with US$56.0 million, which included a deemed dividend
on issuance of Series A preferred shares of US$49.2 million in the prior year period. The
deemed dividend on issuance of Series A preferred shares was a
charge related to the beneficial conversion feature, and such
Series A preferred shares have been converted into ordinary shares
of the Company upon its initial public offerings in March 2012.
Non-GAAP net loss(3), which excludes share-based compensation
expenses, was US$6.5 million compared
to US$4.2 million in the prior year
period. Non-GAAP net loss margin improved to 6.4% from 14.6% in the
prior year period and 10.6% from the fourth quarter of 2011.
Non-GAAP net loss per diluted ADS was US$0.25 in the first quarter of 2012 compared to
US$0.18 in the prior year period.
For the quarter ending March 31,
2012, the Company's weighted average number of ADSs used in
computing diluted loss per ADS was 25,832,358.
As of March 31, 2012, the Company
had cash and cash equivalents of US$98.5
million.
(1)
|
Active customers are
defined as any registered member who has purchased products from
the Company at least once during the quarter.
|
(2)
|
Total orders are defined
as the total number of orders placed during the quarter.
|
(3)
|
An explanation of the
Company's non-GAAP financial measures is included in the section
entitled "Use of Non-GAAP Financial Measures" below, and the
related reconciliations to GAAP financial measures are presented in
the accompanying financial information. Share-based compensation
charges for the quarters ended March 31, 2012, March 31, 2011 and
December 31, 2011 were US$2.1 million, US$2.5 million and US$52.3
million, respectively.
|
(4)
|
"ADS" is American
Depositary Share. Each ADS represents two ordinary
shares.
|
Business Outlook
For the second quarter of 2012, the Company expects its net
revenues to be between US$120 million and
US$125 million, representing a year-over-year growth rate of
approximately 196% to 208%. These forecasts reflect the Company's
current and preliminary view on the market and operational
conditions, which are subject to change.
Recent Developments
The Company successfully completed its initial public offering
and listing of 11,004,600 ADSs on the New York Stock Exchange on
March 23, 2012. The Company raised
net proceeds of US$71.5 million from
the offering.
Conference Call Information
The Company will hold a conference call at 8:00 a.m. Eastern Time on May 15, 2012 to discuss its financial results and
operating performance for the first quarter of 2012.
To participate in the call, please dial the following
numbers:
United
States:
|
+1-646-254-3515
|
International Toll
Free:
|
+1-855-500-8701
|
China
Domestic:
|
400-1200654
|
Hong
Kong:
|
+852-3051-2745
|
Conference
ID:
|
# 78299364
|
A replay of the call will be available through May 22, 2012 by dialing the following
numbers:
United
States:
|
+1-718-354-1232
|
International Toll
Free:
|
+1-866-214-5335
|
Conference
ID:
|
# 78299364
|
A live and archived webcast of the conference call will also be
available at the Company's investor relations website at
http://ir.vipshop.com.
About Vipshop Holdings Limited
Vipshop Holdings Limited ("Vipshop" or the "Company") is
China's leading online discount
retailer for brands. Vipshop offers high quality and popular
branded products to consumers throughout China at a significant discount to retail
prices. Since it was founded in August
2008, the Company has rapidly built a sizeable and growing
base of customers and brand partners. For more information, please
visit ir.vipshop.com.
Safe Harbor Statement
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" and similar statements. Among other things,
the business outlook and quotations from management in this
announcement, as well as Vipshop's strategic and operational plans,
contain forward-looking statements. Vipshop may also make written
or oral forward-looking statements in its periodic reports to the
U.S. Securities and Exchange Commission ("SEC"), 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. Statements that are not historical
facts, including statements about Vipshop's beliefs and
expectations, are forward-looking statements. 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: Vipshop's goals and strategies; Vipshop's
future business development, results of operations and financial
condition; the expected growth of the online discount retail market
in China; Vipshop's ability to
attract customers and brand partners and further enhance its brand
recognition; Vipshop's expectations regarding demand for and market
acceptance of flash sales products and services; competition in the
discount retail industry; fluctuations in general economic and
business conditions in China and
assumptions underlying or related to any of the foregoing. Further
information regarding these and other risks is included in
Vipshop's registration statement on Form F-1, as amended, filed
with the SEC. All information provided in this press release and in
the attachments is as of the date of this press release, and
Vipshop does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
Use of Non-GAAP Financial Measures
To supplement the unaudited condensed consolidated financial
information except that the consolidated statement of shareholders'
equity (deficit) and comprehensive income (loss), consolidated
statements of cash flows, and the detailed notes required by
Accounting Standards Codification 270 Interim Reporting ("ASC270"),
have not been presented. Vipshop uses adjusted net income/(loss),
adjusted net income/(loss) attributable to ordinary shareholders,
adjusted net income/(loss) per share, and adjusted net
income/(loss) attributable to ordinary shareholders per diluted
ADS, and adjusted operating income/(loss), each of which is a
non-GAAP financial measure. Adjusted net income income/(loss)
attributable to ordinary shareholders is net income/(loss)
attributable to ordinary shareholders excluding share-based
compensation expenses. Adjusted operating income/(loss) is income
from operations excluding share-based compensation expenses. The
Company believes that separate analysis and exclusion of the
non-cash impact of share-based compensation adds clarity to the
constituent parts of its performance. The Company reviews adjusted
net income/(loss) together with net income/(loss) to obtain a
better understanding of its operating performance. It uses these
non-GAAP financial measures for planning, forecasting and measuring
results against the forecast. The Company believes that using
multiple measures to evaluate its business allows both management
and investors to assess the company's performance against its
competitors and ultimately monitor its capacity to generate returns
for its investors. The Company also believes that non-GAAP
financial measures are useful supplemental information for
investors and analysts to assess its operating performance without
the effect of non-cash share-based compensation expenses, which
have been and will continue to be significant recurring expenses in
its business. However, the use of non-GAAP financial measures have
material limitations as an analytical tools. One of the limitations
of using non-GAAP financial measures is that they do not include
all items that impact the Company's net income/(loss) for the
period. In addition, because non-GAAP financial measures are not
measured in the same manner by all companies, they may not be
comparable to other similar titled measures used by other
companies. In light of the foregoing limitations, you should not
consider non-GAAP financial measure in isolation from or as an
alternative to the financial measure prepared in accordance with
U.S. GAAP.
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation from, or as a substitute
for, the financial information prepared and presented in accordance
with GAAP. For more information on these non-GAAP financial
measures, please see the table captioned "Vipshop Holdings Limited
Reconciliations of GAAP and Non-GAAP Results" at the end of this
release.
Investor Relations Contact
Vipshop Holdings Limited
Millicent Tu
Tel: +86 (20) 2233-0732
Email: IR@vipshop.com
ICR, Inc.
Jeremy Peruski
Tel: +1 (646) 405-4866
Email: IR@vipshop.com
Vipshop Holdings
Limited
|
Condensed
Consolidated Statements of Operations
|
(Amounts in US
dollars, except for number of shares and ADS and per share and per
ADS data)
|
|
|
Three Months
Ended
|
|
March 31,
2011
|
March 31,
2012
|
Dec 31,
2011
|
|
USD
|
USD
|
USD
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
Net revenues
|
28,872,040
|
101,262,023
|
105,205,829
|
Cost of goods
sold
|
(23,949,749)
|
(79,837,020)
|
(84,211,219)
|
Gross profit
|
4,922,291
|
21,425,003
|
20,994,610
|
|
|
|
|
Fulfillment
expenses(1)
|
(6,026,465)
|
(16,877,142)
|
(19,592,188)
|
Marketing
expenses
|
(1,655,106)
|
(5,873,102)
|
(6,721,359)
|
Technology and content
expenses
|
(493,883)
|
(2,433,157)
|
(2,981,439)
|
General and
administrative expenses
|
(3,514,259)
|
(5,756,147)
|
(55,510,374)
|
Other income
|
56,724
|
841,428
|
327,199
|
Total operating
expenses
|
(11,632,989)
|
(30,098,120)
|
(84,478,161)
|
Loss from
operations
|
(6,710,698)
|
(8,673,117)
|
(63,483,551)
|
Interest
expense
|
-
|
(186,725)
|
(287,576)
|
Interest
income
|
687
|
165,939
|
103,772
|
Exchange gain
|
-
|
107,664
|
142,428
|
Loss before income
taxes
|
(6,710,011)
|
(8,586,239)
|
(63,524,927)
|
Income tax
expenses
|
|
|
|
Net loss
|
(6,710,011)
|
(8,586,239)
|
(63,524,927)
|
Deemed dividend on
issuance of Series A Preferred Shares
|
(49,214,977)
|
-
|
-
|
Net loss attributable to
ordinary shareholders
|
(55,924,988)
|
(8,586,239)
|
(63,524,927)
|
|
|
|
|
Weighted average numbers
of shares used in calculating net loss per share:
|
|
|
——Basic
|
46,570,417
|
51,664,716
|
46,234,659
|
——Diluted
|
46,570,417
|
51,664,716
|
46,234,659
|
|
|
|
|
Net Loss per
share
|
|
|
|
——Basic
|
(1.20)
|
(0.17)
|
(1.37)
|
——Diluted
|
(1.20)
|
(0.17)
|
(1.37)
|
|
|
|
|
Net Loss per ADS (2
ordinary shares equal to 1 ADS)
|
|
|
|
——Basic
|
(2.40)
|
(0.33)
|
(2.75)
|
——Diluted
|
(2.40)
|
(0.33)
|
(2.75)
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
2011
|
March 31,
2012
|
Dec 31,
2011
|
|
USD
|
USD
|
USD
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
Share-based compensation
charges included are as follows:
|
|
|
|
Fulfillment
expenses
|
1,983
|
60,007
|
225,047
|
Marketing
expenses
|
438
|
27,820
|
168,497
|
Technology and
content expenses
|
3,695
|
162,606
|
595,149
|
General and
administrative expenses
|
2,479,704
|
1,852,786
|
51,352,722
|
Total
|
2,485,820
|
2,103,219
|
52,341,415
|
|
|
|
|
(1) Including shipping
and handling expense, which amounted US$3.9 million, US$9.4 million
and US$13.0 million in the three month periods ended March 31,
2011, March 31, 2012 and December 31, 2011,
respectively.
|
Vipshop Holdings
Limited
|
Condensed
Consolidated Balance Sheets
|
(Amounts in US
dollars)
|
|
|
As of December 31,
2011
|
As of March 31,
2012
|
|
USD
|
USD
|
ASSETS
|
|
(Unaudited)
|
CURRENT
ASSETS
|
|
|
Cash and cash
equivalents
|
44,954,778
|
98,473,344
|
Restricted
deposits
|
14,214,585
|
9,022,318
|
Accounts
receivable
|
4,150,664
|
1,635,632
|
Amounts due from related
parties
|
2,101,853
|
573,197
|
Other
receivables
|
9,410,481
|
6,119,672
|
Inventories
|
69,742,200
|
66,242,773
|
Advance to
suppliers
|
12,626,286
|
5,503,815
|
Prepaid
expenses
|
1,077,194
|
1,032,713
|
Total current
assets
|
158,278,041
|
188,603,464
|
NON-CURRENT
ASSETS
|
|
|
Property and equipment,
net
|
9,148,162
|
8,826,822
|
Deposits for property,
plant and equipment
|
-
|
328,877
|
Other asset,
net
|
9,117
|
7,908
|
Total non-current
asset
|
9,157,279
|
9,163,607
|
TOTAL
ASSETS
|
167,435,320
|
197,767,071
|
|
|
|
LIABILTIES AND
EQUITY
|
|
|
CURRENT
LIABILITIES
|
|
|
Accounts payable
(Including accounts payable of the VIE without recourse to
the Company of $2,243,711 and $765,672 as of December 31, 2011 and
March 31,2012 , respectively)
|
88,020,376
|
71,043,448
|
Advance from customers
(Including advance from customers of the VIE without
recourse
to the Company of $15,378,465 and $17,946,093 as of December 31,
2011 and March 31,2012 , respectively)
|
15,381,357
|
17,946,093
|
Accrued expenses and
other current liabilities (Including accrued expenses and other
current liabilities of the VIE without recourse to the Company of
$11,825,417 and $7,220,370
as of December 31, 2011 and March 31,2012 ,
respectively)
|
26,666,502
|
19,162,426
|
Amounts due to related
parties (Including amounts due to related parties of the VIE
without
recourse to the Company of $2,992,516 and $2,953,896 as of December
31, 2011 and March 31, 2012, respectively)
|
3,797,508
|
3,185,648
|
Deferred income (Entire
amounts are liabilities of the VIE without recourse to the
Company)
|
2,569,655
|
4,010,665
|
Bank
borrowings
|
12,710,720
|
7,939,659
|
Total current
liabilities
|
149,146,118
|
123,287,939
|
Total
liabilities
|
149,146,118
|
123,287,939
|
|
|
|
EQUITY
|
|
|
Ordinary shares
(US$0.0001 par value, 471,620,833 shares authorized and 46,234,650
shares issued and outstanding as of December 31, 2011; US$0.0001
par value, 101,138,565 shares issued and outstanding as of March
31, 2012)
|
4,624
|
10,114
|
Series A Preferred
Shares (US$0.0001 par value: 20,212,500 shares authorized, issued
and outstanding as of December 31, 2011; nil authorized, issued and
outstanding as of March 31, 2012)
|
20,113,898
|
-
|
Series B Preferred
Shares (US$0.0001 par value: 8,166,667 shares authorized, issued
and outstanding as of December 31, 2011; nil authorized, issued and
outstanding as of March 31, 2012)
|
41,147,021
|
-
|
Additional paid-in
capital
|
124,341,953
|
250,365,437
|
Accumulated
losses
|
(166,553,261)
|
(175,139,500)
|
Accumulated other
comprehensive loss
|
(765,033)
|
(756,919)
|
Total shareholders'
equity
|
18,289,202
|
74,479,132
|
TOTAL LIABILITIES AND
EQUITY
|
167,435,320
|
197,767,071
|
Vipshop Holdings
Limited
|
Reconciliations of
GAAP and Non-GAAP Results
|
|
|
Three Months
Ended
|
|
|
March 31,
2011
|
March 31,
2012
|
Dec 31,
2011
|
|
USD
|
USD
|
USD
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Loss from
operations
|
(6,710,698)
|
(8,673,117)
|
(63,483,551)
|
Share-based compensation
expenses
|
2,485,820
|
2,103,219
|
52,341,415
|
Adjusted loss from
operations
|
(4,224,878)
|
(6,569,898)
|
(11,142,136)
|
|
|
|
|
|
|
|
|
Net loss
|
(6,710,011)
|
(8,586,239)
|
(63,524,927)
|
Share-based compensation
expenses
|
2,485,820
|
2,103,219
|
52,341,415
|
Adjusted net
loss
|
(4,224,191)
|
(6,483,020)
|
(11,183,512)
|
|
|
|
|
|
|
|
|
Net loss attributable to
ordinary shareholders
|
(55,924,988*)
|
(8,586,239)
|
(63,524,927)
|
Share-based compensation
expenses
|
2,485,820
|
2,103,219
|
52,341,415
|
Adjusted net loss
attributable to ordinary shareholders
|
(53,439,168)
|
(6,483,020)
|
(11,183,512)
|
|
|
|
|
Weighted average numbers
of shares used in calculating net loss per share:
|
|
|
——Basic
|
46,570,417
|
51,664,716
|
46,570,417
|
——Diluted
|
46,570,417
|
51,664,716
|
46,570,417
|
|
|
|
|
Adjusted net loss per
share
|
|
|
|
——Basic
|
(1.15)
|
(0.13)
|
(0.24)
|
——Diluted
|
(1.15)
|
(0.13)
|
(0.24)
|
|
|
|
|
Adjusted net loss
attributable to ordinary shareholders per ADS (2 ordinary shares
equal to 1 ADS)
|
|
|
|
——Basic
|
(2.29)
|
(0.25)
|
(0.48)
|
——Diluted
|
(2.29)
|
(0.25)
|
(0.48)
|
|
* Including deemed
dividends on issuance of Series A Preferred Shares, which have all
been converted into ordinary shares upon the Company's initial
public offering in March 2012.
|
SOURCE Vipshop Holdings Limited