GUANGZHOU, China, Aug. 9, 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 June 30,
2012.
Second Quarter 2012 Highlights
- Net revenues increased by 233.5% over prior year period to
US$135.3 million, primarily
attributable to a 227.3% increase in the number of active
customers[1] to 1.5 million and a 242.3% increase in total
orders[2] to 4.7 million.
- Gross margin increased to 21.8% from 18.3% in the prior year
period and 21.2% in the first quarter of 2012.
- Non-GAAP loss from operations[3] decreased to US$3.8 million from US$6.9
million in the prior year period. Non-GAAP operating loss
margin[4] improved to 2.8% from 17.1% in the prior year period and
6.5% in the first quarter of 2012.
- Net loss attributable to ordinary shareholders decreased to
US$5.8 million from US$19.5 million in the prior year period. Net
loss margin improved to 4.3% from 48.1% in the prior year period
and 8.5% in the first quarter of 2012.
Mr. Eric Shen, Chairman and CEO
of Vipshop, stated, "We are excited to have had another quarter of
solid growth in both financial and operational results, further
underscoring our strong operational expertise and capabilities in
China's rapidly growing e-commerce
market. Even with the backdrop of slowing economic growth in
China, demand for discounted
branded products on our platform grew by over 227% year over year
to 4.7 million total orders as our 1.5 million shoppers
increasingly search for bargain deals. Looking ahead, we expect to
leverage our increasing scale, expand our relationships with brand
partners and focused on further streamlining fulfillment
operations, which we believe will lead to further improvement in
our bottom line performance. We believe that these initiatives will
further reinforce our market leadership and growth capabilities
over the long run."
Mr. Donghao Yang, CFO of Vipshop,
commented, "Our robust growth in both top line and bottom line
continues to highlight the network and scale effect associated with
the value that we provide to our customers and brand
partners. This effect resulted in gross margin further
improving to 21.8% as our negotiating position with our brand
partners improves and we continue to attract more shoppers.
In addition, our focus on optimizing the efficiency of our
fulfillment operations resulted in our non-GAAP net loss margin[5]
improving dramatically to 3.1% as compared to 17.6% in the second
quarter of 2011 and 6.4% in the first quarter of 2012. The
growing scalability of our brand partnerships, products portfolio,
and active user base will drive increased operational leverage,
providing us increased confidence in the sustainability of our
business model."
Second Quarter 2012 Financial Results
NET REVENUES
Net revenues for the second quarter of 2012 increased by 233.5%
to US$135.3 million from US$40.6 million in the prior year period,
primarily driven by growth in the number of active customers and
total orders. On a sequential basis, net revenues grew 33.6%
in the second quarter of 2012 primarily due to seasonality
associated with the pent-up demand following the Chinese holiday
season in the first quarter.
The number of active customers for the second quarter of 2012
increased by 227.3% to 1.5 million from approximately 447,000 in
the prior year period. The number of total orders for the second
quarter of 2012 increased by 242.3% to 4.7 million from
approximately 1.4 million in the prior year period. This
increase was primarily due to the Company's addition of several
regional sub-sites in 2011, as well as continued efforts to
optimize product selection, increase the number of sales events and
increase the number of SKUs available on its website. In addition,
the Company's regional warehouse expansion into Shanghai, Chengdu and Beijing has enhanced its ability to
accommodate increased demand from end customers.
GROSS PROFIT
Gross profit for the second quarter of 2012 increased by 297.8%
to US$29.6 million from US$7.4 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 21.8% in the
second quarter of 2012 from 18.3% in the prior year period and
21.2% in the first quarter of 2012. This increase is attributable
to the Company's increased bargaining power with its suppliers due
to the Company's increased scale.
OPERATING EXPENSES
Total operating expenses for the second quarter of 2012
increased by 30.9% to US$35.0 million
from US$26.7 million in the prior
year period. As a percentage of net revenues, total operating
expenses decreased to 25.9% from 65.9% in the prior year period and
29.7% in the first quarter of 2012.
- Fulfillment expenses increased by 143.7% to
US$20.5 million for the second
quarter of 2012 from US$8.4 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 15.2% from 20.8% in the
prior year period and 16.7% in the first quarter of 2012, which
reflects the Company's strategy of shifting towards using regional
delivery services and capacity expansion of regional
warehouses.
- Marketing expenses increased to US$6.6 million from US$2.3
million in the prior year period. As a percentage of net
revenues, marketing expenses decreased to 4.9% from 5.7% in the
prior year period and 5.8% in the first quarter of 2012,
demonstrating the Company's ability to control marketing expenses
and leverage word-of-mouth referrals.
- Technology and content expenses increased to
US$2.7 million from US$850,118 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 slightly decreased to
2.0% from 2.1% in the prior year period and 2.4% in the first
quarter of 2012.
- General and administrative expenses decreased to
US$5.6 million from US$15.2 million in the prior year period. As a
percentage of net revenues, general and administrative expenses
decreased to 4.1% from 37.5% in the prior year period and 5.7% in
the first quarter of 2012, primarily due to decreased share-based
compensation charges compared to the prior year period, increased
operational leverage as well as the Company's continued
cost-control efforts.
Loss from operations was US$5.4
million compared to a loss from operations of US$19.3 million in the prior year period
reflecting the growing scale of the Company's operations, improved
gross margin and costs control. Operating loss margin improved to
4.0% from 47.6% in the prior year period and 8.6% in the first
quarter of 2012.
Non-GAAP loss from operations, which excludes the impact of
share-based compensation expense, decreased to US$3.8 million from US$6.9
million in the prior year period. Non-GAAP operating loss
margin improved to 2.8% from 17.1% in the prior year period and
6.5% in the first quarter of 2012.
NET LOSS
Net loss attributable to ordinary shareholders decreased to
US$5.8 million from US$19.5 million in the prior year period. Net
loss margin improved to 4.3% from 48.1% in the prior year period
and from 8.5% from the first quarter of 2012. Net loss attributable
to ordinary shareholders per diluted ADS[6] was US$0.11 compared to US$0.85 in the prior year period.
Non-GAAP net loss attributable to ordinary shareholders, which
excludes share-based compensation expenses, was US$4.2 million compared to US$7.1 million in the prior year period. Non-GAAP
net loss margin improved to 3.1% from 17.6% in the prior year
period and 6.4% from the first quarter of 2012. Non-GAAP net loss
attributable to ordinary shareholders per diluted ADS was
US$0.08 in the second quarter of 2012
compared to US$0.31 in the prior year
period.
For the quarter ended June 30,
2012, the Company's weighted average number of ADSs used in
computing diluted loss per ADS was 50,569,283.
As of June 30, 2012, the Company
had cash and cash equivalents of US$115.6
million.
For the second quarter of 2012, net cash from operating
activities was $17.0 million.
Business Outlook
For the third quarter of 2012, the Company expects its net
revenues to be between US$145 million and
US$150 million, representing a year-over-year growth rate of
approximately 176% to 186%. These forecasts reflect the Company's
current and preliminary view on the market and operational
conditions, which are subject to change.
Recent Developments
In June 2012, Vipshop appointed
Mr. Daniel Kao as the Company's
Chief Technology Officer ("CTO"). Mr. Kao has more than 16 years'
industry experience with leading e-commerce and Internet companies
in the U.S. and China. Prior to
joining the Company, Mr. Kao was the director of site operation and
quality engineering at eBay Inc., the worldwide leader in online
shopping and payments.
Conference Call Information
The Company will hold a conference call at 8:00 a.m. Eastern Time on August 10, 2012 to discuss its financial results
and operating performance for the second 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:
|
#16687587
|
A replay of the call will be available through August 16, 2012 by dialing the following
numbers:
United States:
|
+1-718-354-1232
|
International Toll Free:
|
+1-866-214-5335
|
China Domestic:
|
400-6920026
|
Conference ID:
|
#16687587
|
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 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 Vipshop does not undertake any obligation to
update any forward-looking statement, except as required under
applicable law.
Use of Non-GAAP Financial Measures
The unaudited condensed consolidated financial information is
prepared in conformity with accounting principles generally
accepted in the United States of
America ("U.S. GAAP"), except that the consolidated
statement of shareholders' equity 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 non-GAAP net
income/(loss) attributable to ordinary shareholders, non-GAAP net
income/(loss) attributable to ordinary shareholders per diluted ADS
and non-GAAP income/(loss) from operations, each of which is a
non-GAAP financial measure. Non-GAAP net income income/(loss)
attributable to ordinary shareholders is net income/(loss)
attributable to ordinary shareholders excluding share-based
compensation expenses. Non-GAAP income/(loss) from operations is
income/(loss) 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
non-GAAP 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
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 U.S. 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.
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
|
|
June 30,
2011
|
June 30,
2012
|
March 31, 2012
|
|
USD
|
USD
|
USD
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
Net revenues
|
40,557,739
|
135,279,785
|
101,262,023
|
Cost of goods
sold
|
(33,129,354)
|
(105,727,006)
|
(79,837,020)
|
Gross profit
|
7,428,385
|
29,552,779
|
21,425,003
|
Operating
expenses
|
|
|
|
Fulfillment
expenses*
|
(8,427,225)
|
(20,540,533)
|
(16,877,142)
|
Marketing
expenses
|
(2,317,286)
|
(6,593,048)
|
(5,873,102)
|
Technology and content
expenses
|
(850,118)
|
(2,656,044)
|
(2,433,157)
|
General and
administrative expenses
|
(15,198,844)
|
(5,575,356)
|
(5,756,147)
|
Other income
|
63,873
|
369,609
|
841,428
|
Total operating
expenses
|
(26,729,600)
|
(34,995,372)
|
(30,098,120)
|
Loss from
operations
|
(19,301,215)
|
(5,442,593)
|
(8,673,117)
|
Interest
expenses
|
(17,188)
|
(33,977)
|
(186,725)
|
Interest
income
|
4,313
|
375,826
|
165,939
|
Exchange (loss)
gain
|
(181,211)
|
(678,866)
|
107,664
|
Loss before income
taxes
|
(19,495,301)
|
(5,779,610)
|
(8,586,239)
|
Income tax
expense
|
-
|
-
|
-
|
Net loss
|
(19,495,301)
|
(5,779,610)
|
(8,586,239)
|
|
|
|
|
Net loss attributable to
ordinary shareholders
|
(19,495,301)
|
(5,779,610)
|
(8,586,239)
|
|
|
|
|
Weighted average numbers
of shares used in calculating net loss per share:
|
|
|
|
—Basic
|
45,986,482
|
101,138,565
|
51,664,716
|
—Diluted
|
45,986,482
|
101,138,565
|
51,664,716
|
|
|
|
|
Net loss per
share
|
|
|
|
—Basic
|
(0.42)
|
(0.06)
|
(0.17)
|
—Diluted
|
(0.42)
|
(0.06)
|
(0.17)
|
|
|
|
|
Net loss per ADS (2
ordinary shares equal to 1 ADS)
|
|
|
|
—Basic
|
(0.85)
|
(0.11)
|
(0.33)
|
—Diluted
|
(0.85)
|
(0.11)
|
(0.33)
|
*Including shipping
and handling expenses, which amounted US$5.2 million, US$12 million
and US$9.4 million in the three month periods ended June 30, 2011,
June 30, 2012 and March 31, 2012, respectively.
|
|
|
|
|
|
Three Months
Ended
|
|
June 30,
2011
|
June 30,
2012
|
March 31,
2012
|
|
USD
|
USD
|
USD
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Share-based compensation
expenses included are follows:
|
|
|
|
Fulfillment
expenses
|
27,868
|
75,540
|
60,007
|
Marketing
expenses
|
6,153
|
29,628
|
27,820
|
Technology and
content expenses
|
51,937
|
212,248
|
162,606
|
General and
administrative expenses
|
12,273,556
|
1,286,408
|
1,852,786
|
Total
|
12,359,514
|
1,603,824
|
2,103,219
|
Vipshop Holdings
Limited
|
Condensed
Consolidated Balance Sheets
|
(Amounts in US
dollars)
|
|
As of December 31,
2011
|
As of
June 30, 2012
|
|
USD
|
USD
|
ASSETS
|
(Audited)
|
(Unaudited)
|
CURRENT
ASSETS
|
|
|
Cash and cash
equivalents
|
44,954,778
|
115,555,040
|
Restricted
deposits
|
14,214,585
|
-
|
Accounts
receivable
|
4,150,664
|
1,317,695
|
Amounts due from related
parties
|
2,101,853
|
-
|
Other
receivables
|
9,410,481
|
5,804,461
|
Inventories
|
69,742,200
|
62,737,047
|
Advance to
suppliers
|
12,626,286
|
4,817,656
|
Prepaid
expenses
|
1,077,194
|
846,725
|
Total current
assets
|
158,278,041
|
191,078,624
|
NON-CURRENT
ASSETS
|
|
|
Property and equipment,
net
|
9,148,162
|
8,930,231
|
Deposits for property,
plant and equipment
|
-
|
216,118
|
Other assets
|
9,117
|
6,719
|
Total non-current
assets
|
9,157,279
|
9,153,068
|
TOTAL ASSETS
|
167,435,320
|
200,231,692
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
CURRENT
LIABILITIES
|
|
|
Accounts payable
(Including accounts
payable of the VIE without recourse to the
Company of $2,243,711 and $253,416 as of
December 31, 2011 and June 30,2012,
respectively)
|
88,020,376
|
76,080,738
|
Advance from
customers(Including
advance from customers of the VIE without
recourse to the Company of $15,378,465 and
$18,392,865 as of December 31, 2011 and
June 30,2012, respectively)
|
15,381,357
|
18,463,318
|
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
$10,750,523 as of December 31, 2011 and June 30,2012,
respectively)
|
26,666,502
|
26,933,646
|
Amounts due to related
parties(Including
amounts due to related parties of the VIE
without recourse to the Company of
$2,992,516 and $527,282 as of December
31, 2011 and June 30,2012, respectively)
|
3,797,508
|
620,317
|
Deferred income(Entire
amounts are
liabilities of the VIE without recourse to the
Company)
|
2,569,655
|
5,454,869
|
Bank
borrowings
|
12,710,720
|
-
|
Total current
liabilities
|
149,146,118
|
127,552,888
|
Total
liabilities
|
149,146,118
|
127,552,888
|
|
|
|
EQUITY
|
|
|
Ordinary shares
(US$0.0001 par value,471,620,833 shares authorized and 46,234,659
shares issued and outstanding as of December 31,2011;US$0.0001 par
value, 101,138,565 shares issued and outstanding as of June
30,2012)
|
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 June 30,2012)
|
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 June 30,2012)
|
41,147,021
|
-
|
Additional paid-in
capital
|
124,341,953
|
254,262,023
|
Accumulated
losses
|
(166,553,261)
|
(180,919,110)
|
Accumulated other
comprehensive income (loss)
|
(765,033)
|
(674,223)
|
Total shareholders'
equity
|
18,289,202
|
72,678,804
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
167,435,320
|
200,231,692
|
Vipshop Holdings
Limited
|
Reconciliations of
GAAP and Non-GAAP Results
|
|
|
|
|
|
June 30,
2011
|
June 30,
2012
|
March 31,
2012
|
|
USD
|
USD
|
USD
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Loss from
operations
|
(19,301,215)
|
(5,442,593)
|
(8,673,117)
|
Share-based compensation
expenses
|
12,359,514
|
1,603,824
|
2,103,219
|
Non-GAAP loss from
operations
|
(6,941,701)
|
(3,838,769)
|
(6,569,898)
|
|
|
|
|
|
|
|
|
Net loss attributable to
ordinary shareholders
|
(19,495,301)
|
(5,779,610)
|
(8,586,239)
|
Share-based compensation
expenses
|
12,359,514
|
1,603,824
|
2,103,219
|
Non-GAAP net loss
attributable to ordinary shareholders
|
(7,135,787)
|
(4,175,786)
|
(6,483,020)
|
|
|
|
|
Weighted average numbers
of shares used in calculating net loss per share:
|
|
|
|
—Basic
|
45,986,482
|
101,138,565
|
51,664,716
|
—Diluted
|
45,986,482
|
101,138,565
|
51,664,716
|
|
|
|
|
Non-GAAP net loss per
attributable to ordinary shareholders per share
|
|
|
|
—Basic
|
(0.16)
|
(0.04)
|
(0.13)
|
—Diluted
|
(0.16)
|
(0.04)
|
(0.13)
|
|
|
|
|
Non-GAAP net loss per
attributable to ordinary shareholders per ADS (2 ordinary shares
equal to 1 ADS)
|
|
|
—Basic
|
(0.31)
|
(0.08)
|
(0.25)
|
—Diluted
|
(0.31)
|
(0.08)
|
(0.25)
|
[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] Non-GAAP loss from
operations is a non-GAAP financial measure, which is defined as
loss from operations excluding share-based compensation
expenses.
|
[4] Non-GAAP operating
loss margin is a non-GAAP financial measure, which is defined as
non-GAAP loss from operations as a percentage of net
revenues.
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[5] Non-GAAP net loss is
a non-GAAP financial measure, which is defined as net loss
excluding share-based compensation expenses. Non-GAAP net
loss margin, a non-GAAP financial measure, is defined as non-GAAP
net loss as a percentage of net revenues.
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[6] "ADS" is American
Depositary Share. Each ADS represents two ordinary
shares.
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SOURCE Vipshop Holdings Limited