LightInTheBox Reports Second Quarter 2019 Financial Results
Second Quarter 2019 Highlights
- Total revenues regained growth momentum increasing 4.9% year-over-year to
$58.1 million . - Gross margin increased substantially to 41.9% from 25.4% in the same quarter of 2018.
- Adjusted EBITDA[1] improved significantly and turned positive, increasing to earnings of
$0.9 million , compared with a loss of$8.9 million in the same quarter of 2018. - Net loss narrowed to
$7.3 million , compared with a net loss of$9.5 million in the same quarter of 2018. Net loss included the impact from a$6.6 million non-operating loss due to the change in fair value of the convertible promissory notes associated with the acquisition of Ezbuy. - Selling and marketing expenses as a percentage of total revenue decreased to 19.8% from 20.4% in the same quarter of 2018.
Mr. Jian He, Chief Executive Officer of LightInTheBox, commented, "I'm glad to report solid results which I believe demonstrate just how effective our efforts over the past few quarters have been in stabilizing and turning our business around. Revenues during the quarter regained growth momentum by increasing 4.9% year-over-year. Gross margin expanded significantly to 41.9%, driven by a shift in product mix towards higher margin products. More importantly, adjusted EBITDA turned positive, increasing to earnings of
[1] For a discussion of the use of non-GAAP financial measures, see "Non-GAAP Financial Measures." |
Second Quarter 2019 Financial Results
Total revenues increased by 4.9% year-over-year to
The number of orders for product sales was 1.3 million in the second quarter of 2019, compared with 0.9 million in the same quarter of 2018. The number of customers for product sales was 0.8 million for the second quarter of 2019, compared with 0.7 million in the same quarter of 2018.
Revenues generated from product sales in the apparel category were
Total cost of revenues was
Gross profit in the second quarter of 2019 was
Total operating expenses in the second quarter of 2019 were
- Fulfillment expenses in the second quarter of 2019 were
$4.9 million , compared with$3.7 million in the same quarter of 2018. As a percentage of total revenues, fulfillment expenses were 8.4% in the second quarter of 2019, compared to 6.7% in the same quarter of 2018 and 10.2% in the first quarter of 2019. - Selling and marketing expenses in the second quarter of 2019 were
$11.5 million , compared with$11.3 million in the same quarter of 2018. As a percentage of total revenues, selling and marketing expenses were 19.8% for the second quarter of 2019, compared to 20.4% in the same quarter of 2018 and 18.3% in the first quarter of 2019. - General and administrative (G&A) expenses in the second quarter of 2019 were
$6.4 million , compared with$5.9 million in the same quarter of 2018. As a percentage of total revenues, G&A expenses were 11.0% for the second quarter of 2019, compared with 10.6% in the same quarter of 2018 and 15.3% in the first quarter of 2019. - Research and development (R&D) expenses in the second quarter of 2019 were
$4.1 million , compared with$2.8 million in the same quarter of 2018. As a percentage of total revenues, R&D expenses represented 7.1% for the second quarter of 2019, compared with 5.1% in the same quarter of 2018 and 8.3% in the first quarter of 2019.
Gain from equity method investment was
Loss from operations was
Net loss was
Net loss per American Depository Share ("ADS") was
In the second quarter of 2019, the Company's weighted average number of ADSs used in computing the loss per ADS was 67,302,278.
Adjusted EBITDA, which represents gain /(loss) from operations before share-based compensation expense, change in fair value of convertible promissory notes, interest income, interest expense, income tax expense and depreciation and amortization expenses, was a gain of
As of
Business outlook
For the third quarter of 2019, based on current information available to the Company and business seasonality, the Company expects net revenues to be between
Change in Fair Value of Convertible Promissory Notes Associated with the Acquisition of Ezbuy
The Company entered into a Share Purchase Agreement ("SPA") on
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use the following non-GAAP financial measures to help evaluate our operating performance:
"Adjusted EBITDA" represents gain /(loss) from operations before share-based compensation expense, change in fair value of convertible promissory notes, interest income, interest expense, income tax expense and depreciation and amortization expenses. Although other companies may calculate adjusted EBITDA differently or not present it at all, we believe that the adjusted EBITDA helps to identify underlying trends in our operating results, enhancing their understanding of the past performance and future prospects.
Potential impact on adoption of ASC 606 – revenue from contracts with customers
The Company is in the process of assessing on the announcement of ASC 606 – revenue from contracts with customers, principal versus agent considerations for one of the business lines of Ezbuy, which was acquired by the Company on
Conference Call
The Company will hold a conference call at
US Toll Free: |
1-866-519-4004 |
Hong Kong Toll Free: |
800-906-601 |
Mainland China: |
400-620-8038 |
International: |
+65-6713-5090 |
Passcode: |
1383609 |
A telephone replay will be available two hours after the conclusion of the conference call through
US: |
+1-646-254-3697 |
Hong Kong: |
+852-3051-2780 |
International: |
+61-2-8199-0299 |
Passcode: |
1383609 |
A live and archived webcast of the conference call will be available on the Investor Relations section of
About LightInTheBox Holding Co., Ltd.
For more information, please visit www.lightinthebox.com.
Investor Relations Contact
Christensen
Ms. Xiaoyan Su
Tel: +86 (10) 5900 3429
Email: ir@lightinthebox.com
OR
Christensen
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: lbergkamp@ChristensenIR.com
Forward-Looking Statements
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "potential," "continue," "ongoing," "targets" and similar statements. Among other things, statements that are not historical facts, including statements about
LightInTheBox Holding Co., Ltd. |
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Unaudited Condensed Consolidated Balance Sheets |
||||
(U.S. dollars in thousands, or otherwise noted) |
||||
As of December 31, |
As of June 30, |
|||
2018 |
2019 |
|||
ASSETS |
||||
Current Assets |
||||
Cash and cash equivalents |
38,808 |
28,752 |
||
Restricted cash |
994 |
646 |
||
Accounts receivable, net of allowance for doubtful |
1,463 |
1,926 |
||
Amounts due from related parties |
- |
4,398 |
||
Inventories |
8,481 |
7,326 |
||
Prepaid expenses and other current assets |
5,811 |
3,847 |
||
Total current assets |
55,557 |
46,895 |
||
Property and equipment, net |
3,652 |
3,269 |
||
Intangible assets, net |
9,890 |
9,290 |
||
Goodwill |
28,169 |
28,169 |
||
Operating lease right-of-use assets, net |
- |
6,318 |
||
Long-term rental deposits |
1,131 |
864 |
||
Long-term investments |
5,188 |
2,913 |
||
TOTAL ASSETS |
103,587 |
97,718 |
||
LIABILITIES AND DEFICIT |
||||
Current Liabilities |
||||
Accounts payable |
12,941 |
12,885 |
||
Amounts due to related parties |
4,953 |
1,211 |
||
Convertible promissory notes |
51,922 |
63,864 |
||
Advance from customers |
17,732 |
18,162 |
||
Current operating lease liabilities |
- |
3,326 |
||
Income tax payable |
26 |
211 |
||
Accrued expenses and other current liabilities |
22,662 |
23,308 |
||
Total current liabilities |
110,236 |
122,967 |
||
Non-current operating lease liabilities |
- |
997 |
||
Non-current finance lease liabilities |
1,156 |
2,893 |
||
TOTAL LIABILITIES |
111,392 |
126,857 |
||
DEFICIT |
||||
Ordinary shares |
11 |
11 |
||
Additional paid-in capital |
239,269 |
240,225 |
||
Treasury shares, at cost |
(27,261) |
(27,261) |
||
Accumulated other comprehensive loss |
(932) |
(1,822) |
||
Accumulated deficit |
(218,887) |
(240,391) |
||
Non-controlling interests |
(5) |
99 |
||
TOTAL DEFICIT |
(7,805) |
(29,139) |
||
TOTAL LIABILITIES AND DEFICIT |
103,587 |
97,718 |
||
LightInTheBox Holding Co., Ltd. |
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Unaudited Condensed Consolidated Statements of Operations |
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(U.S. dollars in thousands, except per share data, or otherwise noted) |
|||||||||
Three-month Period Ended |
Six-month Period Ended |
||||||||
June 30, |
June 30, |
June 30, |
June 30, |
||||||
2018 |
2019 |
2018 |
2019 |
||||||
Revenues |
|||||||||
Product sales |
52,064 |
57,111 |
118,032 |
106,900 |
|||||
Services and others |
3,379 |
1,031 |
7,465 |
2,115 |
|||||
Total revenues |
55,443 |
58,142 |
125,497 |
109,015 |
|||||
Cost of revenues |
|||||||||
Product sales |
(38,160) |
(33,618) |
(84,050) |
(66,403) |
|||||
Services and others |
(3,210) |
(162) |
(6,888) |
(519) |
|||||
Total Cost of revenues |
(41,370) |
(33,780) |
(90,938) |
(66,922) |
|||||
Gross profit |
14,073 |
24,362 |
34,559 |
42,093 |
|||||
Operating expenses |
|||||||||
Fulfillment |
(3,700) |
(4,906) |
(8,180) |
(10,171) |
|||||
Selling and marketing |
(11,318) |
(11,523) |
(27,396) |
(20,792) |
|||||
General and administrative |
(5,889) |
(6,371) |
(10,874) |
(14,175) |
|||||
Research and development |
(2,822) |
(4,128) |
(5,836) |
(8,308) |
|||||
Total operating expenses |
(23,729) |
(26,928) |
(52,286) |
(53,446) |
|||||
Loss from operations |
(9,656) |
(2,566) |
(17,727) |
(11,353) |
|||||
Exchange loss on offshore bank accounts |
14 |
- |
(43) |
- |
|||||
Interest income |
9 |
74 |
227 |
197 |
|||||
Interest expense |
- |
(18) |
- |
(38) |
|||||
Change in fair value of convertible promissory notes |
- |
(6,605) |
- |
(11,942) |
|||||
Total other income / (loss) |
23 |
(6,549) |
184 |
(11,783) |
|||||
Loss before income taxes and gain from equity method |
(9,633) |
(9,115) |
(17,543) |
(23,136) |
|||||
Income tax expense |
(1) |
(204) |
(3) |
(420) |
|||||
Gain from equity method investment |
92 |
2,029 |
151 |
2,156 |
|||||
Net loss |
(9,542) |
(7,290) |
(17,395) |
(21,400) |
|||||
Less: Net income attributable to non-controlling interests |
- |
72 |
- |
104 |
|||||
Net loss attributable to LightInTheBox Holding Co., Ltd. |
(9,542) |
(7,362) |
(17,395) |
(21,504) |
|||||
Weighted average numbers of shares used in calculating |
|||||||||
—Basic |
133,293,041 |
134,604,556 |
133,679,564 |
134,531,762 |
|||||
—Diluted |
133,293,041 |
134,604,556 |
133,679,564 |
134,531,762 |
|||||
Net loss per ordinary share |
|||||||||
—Basic |
(0.07) |
(0.05) |
(0.13) |
(0.16) |
|||||
—Diluted |
(0.07) |
(0.05) |
(0.13) |
(0.16) |
|||||
Net loss per ADS (2 ordinary shares equal to 1 ADS) |
|||||||||
—Basic |
(0.14) |
(0.11) |
(0.26) |
(0.32) |
|||||
—Diluted |
(0.14) |
(0.11) |
(0.26) |
(0.32) |
|||||
LightInTheBox Holding Co., Ltd. |
||||||||
Unaudited Reconciliations of GAAP and Non-GAAP Results |
||||||||
(U.S. dollars in thousands, or otherwise noted) |
||||||||
Three-month Period Ended |
Six-month Period Ended |
|||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||
2018 |
2019 |
2018 |
2019 |
|||||
Net loss |
(9,542) |
(7,290) |
(17,395) |
(21,400) |
||||
Less: Interest income |
9 |
74 |
227 |
197 |
||||
Interest expense |
- |
(18) |
- |
(38) |
||||
Income tax expense |
(1) |
(204) |
(3) |
(420) |
||||
Depreciation and amortization |
(153) |
(634) |
(306) |
(1,262) |
||||
EBITDA |
(9,397) |
(6,508) |
(17,313) |
(19,877) |
||||
Less: Share-based compensation |
(514) |
(799) |
(1,019) |
(956) |
||||
Change in fair value of convertible promissory notes |
- |
(6,605) |
- |
(11,942) |
||||
Adjusted EBITDA* |
(8,883) |
896 |
(16,294) |
(6,979) |
||||
* Adjusted EBITDA represents gain /(loss) from operations before share-based compensation expense, change in fair value of |
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