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 unaudited financial
results for the second quarter ended June 30, 2020.
Second Quarter 2020 Financial
Highlights
- Total net revenues were US$100.5
million, compared with US$87.5 million in the same quarter last
year.
- Operating loss was US$3.2 million,
compared with operating income of US$2.2 million in the same
quarter last year.
- Non-GAAP operating loss was US$2.8
million, compared with Non-GAAP operating income of US$2.6 million
in the same quarter last year.
- Net loss was US$4.5 million,
compared with net income of US$1.4 million in the same quarter last
year.
- Non-GAAP net loss was US$4.1
million, compared with net income of US$1.8 million in the same
quarter last year.
- Basic and diluted net loss per
American Depositary Share (“ADS1”) attributable to ECMOHO Limited’s
ordinary shareholders were US$0.13 and US$0.13, respectively,
compared with net earnings per ADS of US$0.05 and US$0.04,
respectively, for the same period of 2019.
- Non-GAAP basic and diluted net loss
per ADS attributable to ECMOHO Limited’s ordinary shareholders were
US$0.12 and US$0.12, respectively, compared with net earnings per
ADS of US$0.06 and US$0.05, respectively, for the same period of
2019.
Second Quarter 2020 Operational
Highlights
- Number of brands offered by the
Company increased to 78 as of June 30, 2020, from 70 as of December
31, 2019.
- Number of cumulative paying
consumers was 10.1 million as of June 30, 2020.
- Repeat purchase rate2 reached 37%
in the six months ended June 30, 2020, from 35% in the six months
ended June 30, 2019.
1 Each ADS represents four Class A ordinary shares of the
Company.
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.
“We are very pleased to report revenue of
US$100.5 million in the second quarter of 2020, representing
year-on-year growth of 14.9% and quarter-on-quarter increase of
64.3%,” said Ms. Zoe Wang, co-founder and Chief Executive Officer
of ECMOHO Limited. “During the second quarter, post-pandemic
consumer trends began to come into focus. We believe the pandemic
has negatively affected the purchasing power of Chinese consumers.
However, we also continue to see significant growth
opportunities based on our observations of a rising trend of online
shopping and increasing demand for family health management across
various consumer groups.”
“In addition to continuing to develop and refine
our online retail business, we are actively deploying resources to
cater to changes in the marketplace and consumers’ consumption
upgrade. Specifically:
(1) We are committed to strategic digital
upgrades: We will continue to invest in digital upgrades and plan
to empower participants across the industry food chain by providing
SaaS, CRM and other technology services to share the company's
resources and experiences accumulated over the years.
(2) We are expanding our business upstream by
strengthening our investment in research and development (R&D)
and production capabilities: Based on our analysis of
consumers’ needs, we will extend our business upstream and increase
our investment in the R&D and production of health-related
products. We announced our plan to establish our southwest
base in the city of Chengdu and expect our facilities there to
house a comprehensive platform integrating both R&D and
production capabilities. In addition, we have recently
entered into an investment agreement with Anze Premium Health and
Beauty Pte. Ltd., a company involved in the research and
development of Chinese herbal medicine-based health and wellness
products, to capitalize on favorable trends in the marketplace.
We believe that our current strategic layouts
will not only consolidate the company's leading position in the
non-medical health industry but also become promising earnings
drivers in the coming years.”
Second Quarter 2020 Financial
Results
Total net revenues were
US$100.5 million, representing an increase of 14.9% from US$87.5
million in the same quarter in 2019. The increase was primarily
attributable to strong growth from mother and child care products,
health supplements and food, and personal care products. Top growth
contributors included brand partners Bayer, Harbin Pharmaceutical,
Jiangzhong Shiliao, Puritan’s Pride, Tong Ren Tang, Wyeth
Nutrition, and Wyeth Pharmaceutical.
Cost of revenues was US$83.2
million, an increase of 22.4% from US$68.0 million in the same
quarter in 2019. The increase in cost of revenues was mainly
due to sales growth and higher sales to online retailers which
typically generate lower gross profit.
Operating expenses were US$20.5
million, compared with US$17.2 million in the same quarter in
2019. Operating expenses represented 20.4% of total net
revenues, compared with 19.7% of total net revenues in the same
quarter in 2019.
- Fulfillment
expenses were US$4.6 million, unchanged from the same
quarter in 2019. Fulfillment expenses did not grow as much as
revenue growth primarily due to lower unit expense we paid to
third-party logistics providers. Fulfillment expenses
represented 4.6% of total net revenues, down from 5.3% in the same
quarter in 2019.
- Sales and marketing
expenses were US$12.2 million, an increase of 22.0% from
US$10.0 million in the same quarter in 2019. Within sales and
marketing expenses, platform fees and promotional expenses grew due
to more promotion activities in the period. Sales and marketing
expenses represented 12.1% of total net revenues, up from 11.4% in
the same quarter in 2019.
- General and administrative
expenses were US$3.4 million, an increase of 54.5% from
US$2.2 million in the same quarter in 2019. The increase was
primarily due to higher professional service fees, higher labor
expense, and insurance expense. General and administrative
expenses represented 3.4% of total net revenues, up from 2.5% in
the same quarter in 2019.
- Research and development
expenses were US$0.3 million, representing a 25.0% decline
from US$0.4 million in the same quarter in 2019. The decline
was primarily due to reduced headcount in the R&D department in
the period.
Operating loss was US$3.2
million, compared with operating income of US$2.2 million in the
same quarter in 2019.
Non-GAAP operating loss was
US$2.8 million, compared with Non-GAAP operating income of US$2.6
million in the same quarter in 2019.
Net loss was US$4.5 million,
compared with net income of US$1.4 million during the same quarter
in 2019.
Non-GAAP net loss was US$4.1
million, compared with Non-GAAP net income of US$1.8 million during
the same quarter in 2019.
Net loss attributable to ECMOHO
Limited was US$4.4 million, compared with net income
attributable to ECMOHO Limited of US$1.5 million during the same
quarter in 2019.
Non-GAAP net loss attributable to ECMOHO
Limited was US$4.0 million, compared with Non-GAAP net
income attributable to ECMOHO Limited of US$1.8 million during the
same quarter in 2019.
As of June 30, 2020, the Company had US$68.5 million in cash,
cash equivalents and restricted cash, an increase from US$51.1
million as of December 31, 2019.
Inventory days in the second quarter of 2020
decreased to 54 days from 89 days in the first quarter of
2020. The decrease in inventory days were mainly due to
increased sales in the second quarter as well as our effort to
reduce inventory to reduce costs and improve working capital
efficiency.
Business Outlook
From our vantage point in the industry supply
chain, we believe our industry is still in recovery mode following
the disruption and volatility caused by the COVID-19 pandemic and
is expected to continue to recover over the second half of this
year. We will continue to position our inventory levels
appropriately and strengthen our working capital. We also
expect to cease working with certain less profitable brand partners
to improve profitability. Based on our current forecast, we
expect third quarter revenue to show a decline of 0% to 5% from the
same quarter in 2019.
The above outlook is based on current market
conditions and reflects the Company’s current and preliminary
estimates, which are subject to substantial uncertainty.
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.
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 on June 30, 2020 was US$1.00 = RMB7.0795,
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 Relations Email:
IR@ecmoho.com
ECMOHO LIMITED UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands
of U.S. dollars)
|
As of December 31, 2019 |
|
As of June 30, 2020 |
|
US$ |
|
US$ |
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
49,099 |
|
|
62,503 |
|
Restricted cash |
2,000 |
|
|
6,004 |
|
Accounts receivable, netAccounts receivable-related party |
49,829 |
|
|
50,829 282 |
|
Inventories, net |
49,895 |
|
|
51,168 |
|
Prepayments and other current assets |
21,366 |
|
|
13,309 |
|
Total current
assets |
172,189 |
|
|
184,095 |
|
Property and equipment, net |
1,429 |
|
|
1,163 |
|
Intangible assets |
1,311 |
|
|
1,118 |
|
Operating lease right-of-use assets |
1,204 |
|
|
798 |
|
Deferred tax assets |
788 |
|
|
774 |
|
Other non-current assets |
1,539 |
|
|
1,879 |
|
Total
assets |
178,460 |
|
|
189,827 |
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Short term borrowings |
34,516 |
|
|
42,768 |
|
Accounts payable |
26,439 |
|
|
38,251 |
|
Amounts due to related parties |
16,233 |
|
|
13,890 |
|
Advances from customers |
1,043 |
|
|
2,983 |
|
Operating lease liabilities, current |
1,052 |
|
|
419 |
|
Salary and welfare payable |
719 |
|
|
677 |
|
Tax payable |
3,043 |
|
|
4,036 |
|
Accrued liabilities and other current liabilities |
10,517 |
|
|
11,269 |
|
Total current
liabilities |
93,562 |
|
|
114,293 |
|
Deferred taxes liabilities |
139 |
|
|
103 |
|
Operating lease liabilities, non-current |
69 |
|
|
3 |
|
Total
liabilities |
93,770 |
|
|
114,399 |
|
|
|
|
|
Stockholders’
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 |
|
|
106,827 |
|
Accumulated other comprehensive
loss |
(2,265 |
) |
|
(3,205 |
) |
Accumulated deficit |
(19,556 |
) |
|
(28,334 |
) |
Total ECMOHO Limited
shareholders’ equity |
84,125 |
|
|
75,290 |
|
Non-controlling interests |
565 |
|
|
138 |
|
Total shareholders’
equity |
84,690 |
|
|
75,428 |
|
Total liabilities,
mezzanine equity and shareholders’ equity |
178,460 |
|
|
189,827 |
|
|
|
|
|
ECMOHO LIMITED UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands of U.S. dollars, except for share and per ADS
data)
|
For Three Months Ended |
|
For Six Months Ended |
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
US$ |
|
US$ |
|
US$ |
|
US$ |
Total net revenues |
87,463 |
|
|
100,475 |
|
|
151,325 |
|
|
161,637 |
|
Total cost of revenue |
(68,039 |
) |
|
(83,182 |
) |
|
(115,433 |
) |
|
(133,604 |
) |
Gross profit |
19,424 |
|
|
17,293 |
|
|
35,892 |
|
|
28,033 |
|
Operating expenses(1): |
|
|
|
|
|
|
|
Fulfillment expenses |
(4,572 |
) |
|
(4,610 |
) |
|
(8,448 |
) |
|
(8,384 |
) |
Sales and marketing expenses |
(9,954 |
) |
|
(12,190 |
) |
|
(19,111 |
) |
|
(21,366 |
) |
General and administrative expenses |
(2,234 |
) |
|
(3,360 |
) |
|
(4,441 |
) |
|
(6,448 |
) |
Research and development expenses |
(428 |
) |
|
(324 |
) |
|
(899 |
) |
|
(634 |
) |
Other operating income |
- |
|
|
15 |
|
|
- |
|
|
16 |
|
Total operating expenses |
(17,188 |
) |
|
(20,469 |
) |
|
(32,899 |
) |
|
(36,816 |
) |
Operating income/(loss) |
2,236 |
|
|
(3,176 |
) |
|
2,993 |
|
|
(8,783 |
) |
Finance expense, net |
(604 |
) |
|
(1,141 |
) |
|
(1,109 |
) |
|
(1,688 |
) |
Foreign exchange (loss)/income, net |
6 |
|
|
(143 |
) |
|
(51 |
) |
|
(111 |
) |
Other income, net |
11 |
|
|
7 |
|
|
262 |
|
|
1,529 |
|
Income/(loss) before income tax expenses |
1,649 |
|
|
(4,453 |
) |
|
2,095 |
|
|
(9,053 |
) |
Income taxes profit/(expenses) |
(226 |
) |
|
(6 |
) |
|
(376 |
) |
|
10 |
|
Net income/(loss) |
1,423 |
|
|
(4,459 |
) |
|
1,719 |
|
|
(9,043 |
) |
Less: Net loss attributable to the non-controlling interest
shareholders and redeemable non-controlling interest
shareholders |
(68 |
) |
|
(86 |
) |
|
(94 |
) |
|
(265 |
) |
Net income/(loss) attributable to ECMOHO
Limited |
1,491 |
|
|
(4,373 |
) |
|
1,813 |
|
|
(8,778 |
) |
Less: Accretion on Series A convertible redeemable preferred shares
to redemption value |
(306 |
) |
|
- |
|
|
(608 |
) |
|
- |
|
Less: Accretion to redemption value of redeemable non-controlling
interests |
(146 |
) |
|
- |
|
|
(312 |
) |
|
- |
|
Net loss attributable to ECMOHO Limited’s ordinary
shareholders |
1,039 |
|
|
(4,373 |
) |
|
893 |
|
|
(8,778 |
) |
|
|
|
|
|
|
|
|
Net loss per share attributable to
ECMOHO Limited’s ordinary shareholders |
|
|
|
|
|
|
|
—basic |
0.01 |
|
|
(0.03 |
) |
|
0.01 |
|
|
(0.06 |
) |
—diluted |
0.01 |
|
|
(0.03 |
) |
|
0.01 |
|
|
(0.06 |
) |
|
|
|
|
|
|
|
|
Net loss per ADS attributable to ECMOHO Limited’s ordinary
shareholders |
|
|
|
|
|
|
|
—basic |
0.05 |
|
|
(0.13 |
) |
|
0.04 |
|
|
(0.25 |
) |
—diluted |
0.04 |
|
|
(0.13 |
) |
|
0.03 |
|
|
(0.25 |
) |
|
|
|
|
|
|
|
|
Weighted average number of Ordinary Shares |
|
|
|
|
|
|
|
—basic |
90,681,400 |
|
|
139,654,099 |
|
|
90,681,400 |
|
|
139,583,487 |
|
—diluted |
111,728,446 |
|
|
139,654,099 |
|
|
111,584,966 |
|
|
139,583,487 |
|
|
|
|
|
|
|
|
|
(1)Share-based compensation expenses are
allocated in operating expenses items as follows:
|
For Three Months Ended |
For Six Months Ended |
|
June 30, |
|
|
June 30, |
|
June 30, |
|
|
June 30, |
|
|
2019 |
|
|
2020 |
|
2019 |
|
|
2020 |
|
|
US$ |
|
|
US$ |
|
US$ |
|
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
|
Fulfillment expenses |
- |
|
|
3 |
|
- |
|
|
6 |
|
Sales and marketing expenses |
94 |
|
|
103 |
|
166 |
|
|
195 |
|
General and administrative expenses |
249 |
|
|
220 |
|
502 |
|
|
441 |
|
Research and development expenses |
- |
|
|
1 |
|
- |
|
|
6 |
|
Total Share-based compensation expenses |
343 |
|
|
327 |
|
668 |
|
|
648 |
|
|
|
|
|
|
|
|
|
|
|
|
ECMOHO LIMITED
Reconciliations of GAAP and Non-GAAP
Results(In thousands of U.S. dollars, except for
share and per ADS data)
|
For Three Months Ended |
|
For Six Months Ended |
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
US$ |
|
|
US$ |
|
|
US$ |
|
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
Operating income/(loss) |
2,236 |
|
|
(3,176 |
) |
|
2,993 |
|
|
(8,783 |
) |
Add: Share-based compensation expenses |
343 |
|
|
327 |
|
|
668 |
|
|
648 |
|
Non-GAAP Operating income/(loss) |
2,579 |
|
|
(2,849 |
) |
|
3,661 |
|
|
(8,135 |
) |
|
|
|
|
|
|
|
|
|
|
Net income/(loss) |
1,423 |
|
|
(4,459 |
) |
|
1,719 |
|
|
(9,043 |
) |
Add: Share-based compensation expenses |
343 |
|
|
327 |
|
|
668 |
|
|
648 |
|
Non-GAAP Net income/(loss) |
1,766 |
|
|
(4,132 |
) |
|
2,387 |
|
|
(8,395 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss attributable to ECMOHO Limited’s ordinary
shareholders |
1,039 |
|
|
(4,373 |
) |
|
893 |
|
|
(8,778 |
) |
Add: Share-based compensation expenses |
343 |
|
|
327 |
|
|
668 |
|
|
648 |
|
Non-GAAP Net income/(loss) attributable to ECMOHO Limited’s
ordinary shareholders |
1,382 |
|
|
(4,046 |
) |
|
1,561 |
|
|
(8,130 |
) |
Non-GAAP net earnings /(loss) per
ADS attributable to ECMOHO Limited’s ordinary
shareholders |
|
|
|
|
|
|
|
|
|
—basic |
0.06 |
|
|
(0.12 |
) |
|
0.07 |
|
|
(0.23 |
) |
—diluted |
0.05 |
|
|
(0.12 |
) |
|
0.06 |
|
|
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average number of Ordinary Shares |
|
|
|
|
|
|
|
|
|
—basic |
90,681,400 |
|
|
139,654,099 |
|
|
90,681,400 |
|
|
139,583,487 |
|
—diluted |
111,728,446 |
|
|
139,654,099 |
|
|
111,584,966 |
|
|
139,583,487 |
|
|
|
|
|
|
|
|
|
|
|
|
|
ECMOHO (NASDAQ:MOHO)
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From Jun 2024 to Jul 2024
ECMOHO (NASDAQ:MOHO)
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From Jul 2023 to Jul 2024