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 third quarter ended September 30, 2020.
Third Quarter 2020
Financial Highlights
- Total net revenues were US$71.5 million, compared with US$74.9
million in the same quarter last year.
- Operating loss was US$4.2 million, compared with operating
income of US$2.7 million in the same quarter last year.
- Non-GAAP operating loss was US$4.0 million, compared with
Non-GAAP operating income of US$3.1 million in the same quarter
last year.
- Net loss was US$4.1 million, compared with net income of US$1.9
million in the same quarter last year.
- Non-GAAP net loss was US$3.9 million, compared with net income
of US$2.3 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$0.12 and US$0.12, respectively, compared with net earnings
per ADS of US$0.07 and US$0.06, 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$0.11 and US$0.11,
respectively, compared with net earnings per ADS of US$0.09 and
US$0.07, respectively, for the same period of 2019.
Third Quarter
2020 Operational
Highlights
- Number of brands offered by the Company decreased to 63 as of
September 30, 2020, from 70 as of December 31, 2019.
- Number of cumulative paying consumers was 10.5 million as of
September 30, 2020 as compared to 8.2 million as of December 31,
2019 and 7.6 million as of September 30, 2019.
- Repeat purchase rate2 reached 37% in the nine months ended
September 30, 2020 as compared to 35% as of the nine months ended
September 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 happy to see the sequential improvement
in profitability on a quarterly basis and our efforts to strengthen
our working capital and lower our liability position started to
contribute to our operational results,” said Ms. Zoe Wang,
co-founder and Chief Executive Officer of ECMOHO Limited. “In the
third quarter, the total revenue was USD 71.5 million. Thanks to
our efforts on strict cost control, projects portfolio optimization
and actively strategic layout on health industry’s digitalization,
our profitability has further improved on quarterly basis. With
continuous optimization and investment in IT infrastructure, our
operational efficiency improved as well. Our inventory turnover
days were down to 77 days in the third quarter of 2020 from 89 days
in the same quarter of last year. The cash turnover days also were
down to 75 days in the third quarter 2020 from 97 days in the same
period of last year.”
“As of the end of September 2020, the
accumulated paying users and repurchase rate reached 10.5 million
and 37%, respectively. In the third quarter of this year, we
continued to optimize our cooperating brands, and put more focus on
introducing high value partners. As of the reporting date, we have
ceased cooperation with AHC, Tongrentang, and Abbott, and
introduced new brands covering medical care equipment, health care
and cross-border OTC industry, such as Nordic Naturals, Arkray,
Kanghong Pharmaceutical, Beurer, Vitanergy and Modilac. We expect
to see these and potential new high value partners to contribute to
our future profitability and growth.”
“Under a volatile and unpredictable geopolitical
environment, we proactively refined our liability structure and
improved our management of working capital. During the quarter, our
liability was down to a more healthy level. Meanwhile, we entered
into a strategic cooperation with Eternal Asia, a top A-share
listed supply chain company. Based on their advantages in capital
capability and a leading position in supply chain, this cooperation
will enable us to be in a vantage position for introducing and
exploring new brand partners.”
“ECMOHO has kept on innovating on strategy
digitalization, supply chain, IT infrastructure, and marketing, and
promoting consolidation of our leading position as an online
service and integrated solutions provider in the health industry.
During the Double 11 shopping festival this year, we used multiple
promotion channels and methods including a live broadcast and
inviting celebrities, which empowered our brand partners and
brought high growth for them.”
“Looking forward, we are quite confident in our
strong strategic position. We believe our current strategic layout
in the industry will enable us to further expand our business and
improve our profitability, which will contribute to our revenue
growth and sustainable development in the coming years.”
Third Quarter 2020
Financial Results
Total net
revenues were US$71.5 million,
representing a decrease of 4.6% from US$74.9 million in the same
quarter in 2019 with increases in our product sales offset by
declines in other revenues. Among brand partners, the Company saw
revenue growth from existing partners Wyeth Nutrition, Harbin
Pharmaceutical, Jiangzhong Shiliao, and new partners Bayer and
Mediheal.
Cost of revenues were US$58.8
million, representing an increase of 4.0% from US$56.5 million in
the same quarter in 2019. The increase in cost of revenues was
mainly due to higher sales to online retailers.
Operating expenses were US$16.9
million, as compared with US$15.7 million in the same quarter in
2019. Operating expenses represented 23.6% of net revenues,
compared with 21.0% of net revenues in the same quarter in
2019.
-
Fulfillment expenses were US$3.4 million,
representing a decrease of 18.8% from US$4.2 million in the same
quarter in 2019. The decrease was mainly due to lower unit expenses
that we pay to third-party logistics providers. Fulfillment
expenses represented 4.7% of net revenues, down from 5.6% in the
same quarter in 2019.
- Sales and
marketing expenses were US$10.2 million, representing an
increase of 11.0% from US$9.2 million in the same quarter in 2019.
Within sales and marketing expenses, platform fees and promotional
expenses grew due to more promotional activities in the period.
Sales and marketing expenses represented 14.3% of net revenues, up
from 12.3% in the same quarter in 2019.
- General
and administrative expenses were US$3.0 million,
representing an increase of 56.0% from US$1.9 million in the same
quarter in 2019. The increase was primarily due to higher
professional service fees post IPO, such as audit fee, legal fee
and insurance expense. General and administrative expenses
represented 4.3% of net revenues, up from 2.5% in the same quarter
in 2019.
- Research
and development expenses were US$0.3 million, representing
a 41.0% decline from US$0.4 million in the same quarter in 2019.
The decline was primarily due to a reduced headcount in the R&D
department in the period.
Operating loss was US$4.2
million, compared with operating income of US$2.7 million in the
same quarter in 2019.
Non-GAAP operating loss was
US$4.0 million, compared with Non-GAAP operating income of US$3.1
million in the same quarter in 2019.
Net loss was US$4.1 million,
compared with net income of US$1.9 million during the same quarter
in 2019.
Non-GAAP net loss was US$3.9
million, compared with Non-GAAP net income of US$2.3 million during
the same quarter in 2019.
Net loss attributable to ECMOHO
Limited was US$4.1 million, compared with net income
attributable to ECMOHO Limited of US$2.0 million during the same
quarter in 2019.
Non-GAAP net loss
attributable to ECMOHO Limited was US$3.9 million,
compared with Non-GAAP net income attributable to ECMOHO Limited of
US$2.4 million during the same quarter in 2019.
As of September 30, 2020, the Company had
US$54.4 million in cash, cash equivalents and restricted cash, an
increase from US$51.1 million as of December 31, 2019.
Inventories as of September 30, 2020 decreased
by 9% from June 30, 2020, as the company committed to improve the
efficiency of inventory and cash flow management.
Business Outlook
The sequential improvement in profitability on a
quarterly basis and improved inventory and liability position
consolidated our determination to improve our operational
efficiency and profitability going forward. We will keep optimizing
our existing brand portfolio and introducing new brands with higher
profitability. Therefore in the fourth quarter, we estimate the
revenue will decrease year over year, while we expect the net
loss will be significantly narrowed compared with last quarter, or
even breakeven.
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 at September 30, 2020 was US$1.00 = RMB6.8101,
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 UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands
of U.S. dollars)
|
As of December 31,2019 |
|
As of September 30,2020 |
|
US$ |
|
US$ |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
49,099 |
|
|
51,379 |
|
Restricted cash |
2,000 |
|
|
3,004 |
|
Accounts receivable, net |
49,829 |
|
|
51,275 |
|
Inventories, net |
49,895 |
|
|
46,688 |
|
Prepayments and other current assets |
21,366 |
|
|
10,815 |
|
Total current assets |
172,189 |
|
|
163,161 |
|
Property and equipment, net |
1,429 |
|
|
1,072 |
|
Intangible assets |
1,311 |
|
|
1,081 |
|
Operating lease right-of-use assets |
1,204 |
|
|
486 |
|
Long-term investments |
- |
|
|
4,050 |
|
Deferred tax assets, net |
788 |
|
|
805 |
|
Other non-current assets |
1,539 |
|
|
1,536 |
|
Total assets |
178,460 |
|
|
172,191 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Short-term borrowings |
34,516 |
|
|
23,681 |
|
Accounts payable |
26,439 |
|
|
45,935 |
|
Amounts due to related parties |
16,233 |
|
|
11,426 |
|
Advances from customers |
1,043 |
|
|
1,206 |
|
Operating lease liabilities, current |
1,052 |
|
|
320 |
|
Salary and welfare payable |
719 |
|
|
627 |
|
Tax payables |
3,043 |
|
|
4,432 |
|
Accrued liabilities and other current liabilities |
10,517 |
|
|
8,596 |
|
Total current liabilities |
93,562 |
|
|
96,223 |
|
Deferred taxes liabilities |
139 |
|
|
89 |
|
Operating lease liabilities, non-current |
69 |
|
|
- |
|
Total liabilities |
93,770 |
|
|
96,312 |
|
|
|
|
|
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 |
|
|
109,132 |
|
Accumulated other comprehensive loss |
(2,265 |
) |
|
(946 |
) |
Accumulated deficit |
(19,556 |
) |
|
(32,455 |
) |
Total ECMOHO Limited shareholders’ equity |
84,125 |
|
|
75,733 |
|
Non-controlling interests |
565 |
|
|
146 |
|
Total shareholders’ equity |
84,690 |
|
|
75,879 |
|
Total liabilities and shareholders’ equity |
178,460 |
|
|
172,191 |
|
|
|
|
|
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 Nine Months
Ended |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
Total net revenues |
74,929 |
|
|
71,450 |
|
|
226,254 |
|
|
233,087 |
|
Total cost of revenue |
(56,513 |
) |
|
(58,791 |
) |
|
(171,946 |
) |
|
(192,395 |
) |
Gross profit |
18,416 |
|
|
12,659 |
|
|
54,308 |
|
|
40,692 |
|
Operating expenses(1): |
|
|
|
|
|
|
|
Fulfillment expenses |
(4,178 |
) |
|
(3,392 |
) |
|
(12,626 |
) |
|
(11,776 |
) |
Sales and marketing expenses |
(9,181 |
) |
|
(10,195 |
) |
|
(28,292 |
) |
|
(31,560 |
) |
General and administrative expenses |
(1,948 |
) |
|
(3,039 |
) |
|
(6,389 |
) |
|
(9,487 |
) |
Research and development expenses |
(442 |
) |
|
(261 |
) |
|
(1,341 |
) |
|
(895 |
) |
Other operating income |
- |
|
|
- |
|
|
- |
|
|
16 |
|
Total operating expenses |
(15,749 |
) |
|
(16,887 |
) |
|
(48,648 |
) |
|
(53,702 |
) |
Operating income (loss) |
2,667 |
|
|
(4,228 |
) |
|
5,660 |
|
|
(13,010 |
) |
Finance expense, net |
(719 |
) |
|
(519 |
) |
|
(1,828 |
) |
|
(2,207 |
) |
Foreign exchange income, net |
145 |
|
|
416 |
|
|
94 |
|
|
304 |
|
Other income, net |
137 |
|
|
188 |
|
|
399 |
|
|
1,717 |
|
Income (loss) before income tax
expenses |
2,230 |
|
|
(4,143 |
) |
|
4,325 |
|
|
(13,196 |
) |
Income taxes (expenses) benefits |
(308 |
) |
|
17 |
|
|
(684 |
) |
|
26 |
|
Net income (loss) |
1,922 |
|
|
(4,126 |
) |
|
3,641 |
|
|
(13,170 |
) |
Less: Net loss attributable to the non-controlling interest
shareholders and redeemable non-controlling interest
shareholders |
(55 |
) |
|
(5 |
) |
|
(149 |
) |
|
(271 |
) |
Net income (loss) attributable
to ECMOHO Limited |
1,977 |
|
|
(4,121 |
) |
|
3,790 |
|
|
(12,899 |
) |
Less: Accretion on Series A convertible redeemable preferred shares
to redemption value |
(310 |
) |
|
- |
|
|
(918 |
) |
|
- |
|
Less: Accretion to redemption value of redeemable non-controlling
interests |
- |
|
|
- |
|
|
(312 |
) |
|
- |
|
Net income
(loss)
attributable to ECMOHO Limited’s ordinary
shareholders |
1,667 |
|
|
(4,121 |
) |
|
2,560 |
|
|
(12,899 |
) |
|
|
|
|
|
|
|
|
Net earnings
(loss)
per share attributable to ECMOHO Limited’s ordinary
shareholders |
|
|
|
|
|
|
|
—basic |
0.02 |
|
|
(0.03 |
) |
|
0.03 |
|
|
(0.09 |
) |
—diluted |
0.01 |
|
|
(0.03 |
) |
|
0.02 |
|
|
(0.09 |
) |
|
|
|
|
|
|
|
|
Net earnings
(loss)
per ADS attributable to ECMOHO Limited’s ordinary
shareholders |
|
|
|
|
|
|
|
—basic |
0.07 |
|
|
(0.12 |
) |
|
0.11 |
|
|
(0.37 |
) |
—diluted |
0.06 |
|
|
(0.12 |
) |
|
0.09 |
|
|
(0.37 |
) |
|
|
|
|
|
|
|
|
Weighted average number of Ordinary Shares |
|
|
|
|
|
|
|
—basic |
90,681,400 |
|
|
139,786,746 |
|
|
90,681,400 |
|
|
139,651,735 |
|
—diluted |
112,072,446 |
|
|
139,786,746 |
|
|
111,747,459 |
|
|
139,651,735 |
|
|
|
|
|
|
|
|
|
(1)Share-based compensation expenses are
allocated in operating expenses items as follows:
|
For Three Months Ended |
For Nine Months
Ended |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
|
|
|
|
|
|
|
Fulfillment expenses |
2 |
|
5 |
|
2 |
|
11 |
Sales and marketing expenses |
114 |
|
32 |
|
280 |
|
227 |
General and administrative expenses |
266 |
|
220 |
|
768 |
|
661 |
Research and development expenses |
4 |
|
4 |
|
4 |
|
10 |
Total Share-based compensation expenses |
386 |
|
261 |
|
1,054 |
|
909 |
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 Nine Months
Ended |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
|
|
|
|
|
|
|
Operating income (loss) |
2,667 |
|
(4,228 |
) |
|
5,660 |
|
(13,010 |
) |
Add: Share-based compensation expenses |
386 |
|
261 |
|
|
1,054 |
|
909 |
|
Non-GAAP Operating income
(loss) |
3,053 |
|
(3,967 |
) |
|
6,714 |
|
(12,101 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
1,922 |
|
(4,126 |
) |
|
3,641 |
|
(13,170 |
) |
Add: Share-based compensation expenses |
386 |
|
261 |
|
|
1,054 |
|
909 |
|
Non-GAAP Net income (loss) |
2,308 |
|
(3,865 |
) |
|
4,695 |
|
(12,261 |
) |
|
|
|
|
|
|
|
|
Net income
(loss)
attributable to ECMOHO Limited’s ordinary
shareholders |
1,667 |
|
(4,121 |
) |
|
2,560 |
|
(12,899 |
) |
Add: Share-based compensation expenses |
386 |
|
261 |
|
|
1,054 |
|
909 |
|
Non-GAAP Net income (loss) attributable to
ECMOHO Limited’s ordinary shareholders |
2,053 |
|
(3,860 |
) |
|
3,614 |
|
(11,990 |
) |
|
|
|
|
|
|
|
|
Non-GAAP net earnings (loss) per ADS attributable to ECMOHO
Limited’s ordinary shareholders |
|
|
|
|
|
|
|
—basic |
0.09 |
|
(0.11 |
) |
|
0.16 |
|
(0.34 |
) |
—diluted |
0.07 |
|
(0.11 |
) |
|
0.13 |
|
(0.34 |
) |
|
|
|
|
|
|
|
|
Weighted average number of Ordinary Shares |
|
|
|
|
|
|
|
—basic |
90,681,400 |
|
139,786,746 |
|
|
90,681,400 |
|
139,651,735 |
|
—diluted |
112,072,446 |
|
139,786,746 |
|
|
111,747,459 |
|
139,651,735 |
|
ECMOHO (NASDAQ:MOHO)
Historical Stock Chart
From Jun 2024 to Jul 2024
ECMOHO (NASDAQ:MOHO)
Historical Stock Chart
From Jul 2023 to Jul 2024