GUANGZHOU, China, Nov. 13, 2012 /PRNewswire/ -- 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 September 30, 2012.
Third Quarter 2012 Highlights
- Net revenues increased by 197.0% over prior year period to
US$155.9 million, primarily
attributable to a 173.6% increase in the number of active
customers(1) to 1.7 million and a 157.6% increase in total
orders(2) to 5.4 million.
- Gross margin increased to 22.3% from 19.0% in the prior year
period and 21.8% in the second quarter of 2012.
- Non-GAAP loss from operations(3) decreased to US$1.2 million from US$10.7 million in the prior year period.
Non-GAAP operating loss margin(4) improved to 0.7% from 20.3% in
the prior year period and 2.8% in the second quarter of 2012.
- Net loss attributable to ordinary shareholders decreased to
US$1.5 million from US$17.5 million in the prior year period. Net
loss margin improved to 0.9% from 33.4% in the prior year period
and 4.3% in the second quarter of 2012.
- Non-GAAP net income attributable to ordinary shareholders(5)
was US$640,542 compared to a non-GAAP
net loss of US$10.8 million in the
prior year period. Non-GAAP net margin(6) was 0.4% compared with a
non-GAAP net loss margin of 20.6% in the prior year period and 3.1%
from the second quarter of 2012.
Mr. Eric Shen, Chairman and CEO
of Vipshop, stated, "We are very excited to announce that we have
achieved profitability on a non-GAAP basis for the first time in
our Company's history. Our success was led by exceptional financial
and operational results across the board, validating the value
proposition we provide to our consumers and brand partners.
Moreover, we believe that this achievement is a testament to our
execution capabilities of not only rapidly expanding our business
scale but also of consistently improving our bottom line. Building
upon our expanding scale and continuous improvement in operational
efficiencies, we believe that Vipshop is poised to grow as an
industry leader in China's
ever-growing e-Commerce market."
Mr. Donghao Yang, CFO of Vipshop,
commented, "Not only did our revenue growth exceed our
expectations, but we were also able to further expand gross margin
to 22.3% during the summer, which is our seasonally low quarter.
Through growing leverage in our business model and improved
operational expertise, we continue to reduce fulfillment expenses
as a percentage of revenues demonstrating the growing strength of
our leadership position. As China's retail and e-Commerce industries
continue to expand alongside its growing middle class, we are well
positioned to benefit from this strong growth trend by providing
the increasingly affluent Chinese consumers with their desired
branded products at attractive prices."
Third Quarter 2012 Financial Results
NET REVENUES
Net revenues for the third quarter of 2012 increased by 197.0%
to US$155.9 million from US$52.5 million in the prior year period,
primarily driven by growth in the number of active customers and
total orders.
The number of active customers for the third quarter of 2012
increased by 173.6% to 1.7 million from approximately 633,000 in
the prior year period. The number of total orders for the third
quarter of 2012 increased by 157.6% to 5.4 million from 2.1 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 brand and 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 third quarter of 2012 increased by 247.8%
to US$34.8 million from US$10.0 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 22.3% in the
third quarter of 2012 from 19.0% in the prior year period and 21.8%
in the second quarter of 2012. This increase is attributable to the
Company's increased bargaining power with its suppliers due to
increased purchasing scale.
OPERATING EXPENSES
Total operating expenses for the third quarter of 2012 increased
by 38.6% to US$38.0 million from
US$27.4 million in the prior year
period. As a percentage of net revenues, total operating expenses
decreased to 24.4% from 52.2% in the prior year period and 25.9% in
the second quarter of 2012.
- Fulfillment expenses increased by 89.8% to
US$21.7 million for the third quarter
of 2012 from US$11.4 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 13.9% from 21.8% in the
prior year period and 15.2% in the second 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$7.3 million from US$4.6
million in the prior year period. As a percentage of net
revenues, marketing expenses decreased to 4.7% from 8.7% in the
prior year period and 4.9% in the second 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$3.2 million from approximately
US$1.2 million 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 remain stable at 2.1% compared with 2.3% in the prior year
period and 2.0% in the second quarter of 2012.
- General and administrative expenses decreased to
US$6.3 million from US$10.4 million in the prior year period,
primarily due to decreased share-based compensation charges. As a
percentage of net revenues, general and administrative expenses was
4.1% compared with 19.7% in the prior year period and 4.1% in the
second quarter of 2012, reflecting the Company's increased
operational leverage and continued cost-control efforts.
Loss from operations decreased to US$3.3
million from US$17.4 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 2.1% from 33.2% in the prior year
period and 4.0% in the second quarter of 2012.
Non-GAAP loss from operations, which excludes the impact of
share-based compensation expense, decreased to US$1.2 million from US$10.7 million in the prior year period.
Non-GAAP operating loss margin improved to 0.7% from 20.3% in the
prior year period and 2.8% in the second quarter of 2012.
NET LOSS
Net loss attributable to ordinary shareholders decreased to
US$1.5 million from US$17.5 million in the prior year period. Net
loss margin improved to 0.9% from 33.4% in the prior year period
and from 4.3% from the second quarter of 2012. Net loss
attributable to ordinary shareholders per diluted ADS(7) was
US$0.03 compared to US$0.76 in the prior year period.
Non-GAAP net income attributable to ordinary shareholders, which
excludes share-based compensation expenses, was US$640,542 compared to a non-GAAP net loss of
US$10.8 million in the prior year
period. Non-GAAP net margin was 0.4% compared with a non-GAAP net
loss margin of 20.6% in the prior year period and a non-GAAP net
loss margin of 3.1% from the second quarter of 2012. Non-GAAP net
income attributable to ordinary shareholders per diluted ADS was
US$0.01 in the third quarter of 2012
compared to a non-GAAP net loss attributable to ordinary
shareholders per diluted ADS of US$0.47 in the prior year period.
For the quarter ended September 30,
2012, the Company's weighted average number of ADSs used in
computing diluted loss per ADS was 50,569,900.
As of September 30, 2012, the
Company had cash and cash equivalents of US$91.9 million and short-term investments of
US$40.1 million.
For the third quarter of 2012, net cash from operating
activities was US$17.0 million.
Business Outlook
For the fourth quarter of 2012, the Company expects its net
revenues to be between US$235 million and
US$240 million, representing a year-over-year growth rate of
approximately 123% to 128%.As a result, for the full year of 2012,
the Company expects its net revenues to be between US$627 million and US$632 million, representing a
year-over-year growth rate of approximately 176% to 178%. These
forecasts reflect the Company's current and preliminary view on the
market and operational conditions, which are subject to change.
Conference Call Information
The Company will hold a conference call on Wednesday, November 14, 2012 at 8:30 am Eastern Time or 9:30 pm Beijing Time to discuss its financial
results and operating performance for the third 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:
|
#58808563
|
The replay will be accessible through November 21, 2012 by dialing the following
numbers:
United
States Toll
Free:
|
+1-855-452-5696
|
International:
|
+61 2 8199
0299
|
Conference
ID:
|
#58808563
|
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, non-GAAP income/(loss) from operations, non-GAAP net (loss)
margin, and non-GAAP operating (loss) margin, 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. Non-GAAP operating (loss) margin is non-GAAP
income/(loss) from operations as a percentage of net revenues.
Non-GAAP net (loss) margin is non-GAAP net income /(loss)
attributable to ordinary shareholders as a percentage of net
revenues. 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 these
non-GAAP financial measures together with GAAP financial measures
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.
(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 income/(loss) from operations is a non-GAAP financial
measure, which is defined as income/(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 income/(loss) from operations as a
percentage of net revenues.
|
(5)
Non-GAAP net income/(loss) attributable to ordinary shareholders is
a non-GAAP financial measure, which is defined as net income/(loss)
attributable to ordinary shareholders excluding share-based
compensation expenses.
|
(6)
Non-GAAP net (loss) margin is a non-GAAP financial measure, which
is defined as non-GAAP net income /(loss) attributable to ordinary
shareholders as a percentage of net revenues.
|
(7) "ADS"
is American Depositary Share. Each ADS represents two ordinary
shares.
|
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
|
|
September 30, 2011
|
September 30, 2012
|
June 30, 2012
|
|
USD
|
USD
|
USD
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
Net
revenues
|
52,507,268
|
155,944,583
|
135,279,785
|
Cost of
goods sold
|
(42,511,012)
|
(121,180,318)
|
(105,727,006)
|
Gross
profit
|
9,996,256
|
34,764,265
|
29,552,779
|
Operating
expenses
|
|
|
|
Fulfillment expenses*
|
(11,432,449)
|
(21,703,487)
|
(20,540,533)
|
Marketing
expenses
|
(4,559,574)
|
(7,310,957)
|
(6,593,048)
|
Technology
and content expenses
|
(1,190,921)
|
(3,218,857)
|
(2,656,044)
|
General
and administrative expenses
|
(10,352,062)
|
(6,321,337)
|
(5,575,356)
|
Other
income
|
116,386
|
538,739
|
369,609
|
Total
operating expenses
|
(27,418,620)
|
(38,015,899)
|
(34,995,372)
|
Loss from
operations
|
(17,422,364)
|
(3,251,634)
|
(5,442,593)
|
Interest
expense
|
(189,745)
|
(1,197)
|
(33,977)
|
Interest
income
|
13,665
|
1,372,350
|
375,826
|
Exchange
(loss) gain
|
57,158
|
424,454
|
(678,866)
|
Loss
before income taxes
|
(17,541,286)
|
(1,456,027)
|
(5,779,610)
|
Income tax
expenses
|
-
|
-
|
-
|
Net
loss
|
(17,541,286)
|
(1,456,027)
|
(5,779,610)
|
Deemed
dividend on issuance of Series A Preferred Shares
|
-
|
|
|
Net loss
attributable to ordinary shareholders
|
(17,541,286)
|
(1,456,027)
|
(5,779,610)
|
|
|
|
|
Weighted
average numbers of shares used in calculating net loss per
share:
|
|
|
|
--
Basic
|
46,268,513
|
101,139,801
|
101,138,565
|
--
Diluted
|
46,268,513
|
101,139,801
|
101,138,565
|
|
|
|
|
Net loss
per share
|
|
|
|
--
Basic
|
(0.38)
|
(0.01)
|
(0.06)
|
--
Diluted
|
(0.38)
|
(0.01)
|
(0.06)
|
|
|
|
|
Net loss
per ADS (2 ordinary shares equal to 1 ADS)
|
|
|
|
--
Basic
|
(0.76)
|
(0.03)
|
(0.11)
|
--
Diluted
|
(0.76)
|
(0.03)
|
(0.11)
|
*Including shipping and handling expenses, which amounted US$7.3 million,
US$13 million and US$12 million in the three month periods ended
September 30, 2011, September 30, 2012 and June 30, 2012,
respectively.
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
September 30, 2011
|
September 30, 2012
|
June
30, 2012
|
|
USD
|
USD
|
USD
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Share-based compensation charges included are
follows
|
|
|
|
Fulfillment expenses
|
42,197
|
79,090
|
75,540
|
Marketing
expenses
|
9,316
|
30,203
|
29,628
|
Technology
and content expenses
|
78,639
|
258,947
|
212,248
|
General
and administrative expenses
|
6,611,001
|
1,728,329
|
1,286,408
|
Total
|
6,741,153
|
2,096,569
|
1,603,824
|
Vipshop
Holdings Limited
|
Condensed Consolidated Balance
Sheets
|
(Amounts in US dollars)
|
|
|
|
|
As of December 31, 2011
|
As of September 30, 2012
|
|
USD
|
USD
|
ASSETS
|
(Audited)
|
(Unaudited)
|
CURRENT
ASSETS
|
|
|
Cash and
cash equivalents
|
44,954,778
|
91,875,685
|
Restricted
deposits
|
14,214,585
|
-
|
Short-term
investments
|
-
|
40,098,385
|
Accounts
receivable
|
4,150,664
|
2,831,356
|
Amounts
due from related parties
|
2,101,853
|
477,634
|
Other
receivables
|
9,410,481
|
6,222,200
|
Inventories
|
69,742,200
|
90,325,964
|
Advance to
suppliers
|
12,626,286
|
18,397,721
|
Prepaid
expenses
|
1,077,194
|
861,213
|
Total
current assets
|
158,278,041
|
251,090,158
|
NON-CURRENT ASSETS
|
|
|
Property
and equipment, net
|
9,148,162
|
8,489,609
|
Deposits
for property, plant and equipment
|
-
|
724,463
|
Other
assets
|
9,117
|
6,380
|
Total
non-current assets
|
9,157,279
|
9,220,452
|
TOTAL
ASSETS
|
167,435,320
|
260,310,610
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
CURRENT
LIABILITIES
|
|
|
Accounts
payable (Including accounts
payable of the VIE without recourse to the
Company of $2,243,711 and $137,331 as of
December 31, 2011 and September 30,2012 ,
respectively)
|
88,020,376
|
105,315,761
|
Advance from
customers (Including advance from customers of the
VIE without recourse to the Company of $15,378,465 and $34,183,215
as of December 31, 2011 and September 30,2012 ,
respectively)
|
15,381,357
|
34,254,432
|
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 $16,061,844 as of December 31, 2011 and
September 30,2012 , respectively)
|
26,666,502
|
37,086,069
|
Amounts
due to related parties(Including amounts due to related parties of
the VIE without recourse to the Company of $2,992,516 and $665,049
as of December 31, 2011 and September 30,2012 ,
respectively)
|
3,797,508
|
1,590,227
|
Deferred
income ((Including deferred income of the VIE without
recourse to the Company of $2,569,655 and $7,419,825 as of December
31, 2011 and September 30,2012 , respectively))
|
2,569,655
|
8,459,309
|
Bank
borrowings
|
12,710,720
|
-
|
Total
current liabilities
|
149,146,118
|
186,705,798
|
Total liabilities
|
149,146,118
|
186,705,798
|
|
|
|
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, 101,159,707 shares issued and
outstanding as of September 30,2012)
|
4,624
|
10,116
|
Series A
convertible preference 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 September
30,2012)
|
20,113,898
|
-
|
Series B
convertible preference 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 September
30,2012)
|
41,147,021
|
-
|
Additional
paid-in capital
|
124,341,953
|
256,369,162
|
Accumulated losses
|
(166,553,261)
|
(182,375,137)
|
Accumulated other comprehensive income
(loss)
|
(765,033)
|
(399,329)
|
Total
shareholders' equity
|
18,289,202
|
73,604,812
|
TOTAL
LIABILITIES AND EQUITY
|
167,435,320
|
260,310,610
|
Vipshop
Holdings Limited
|
Reconciliations of GAAP and Non-GAAP
Results
|
|
|
|
|
|
Three Months Ended
|
|
September 30, 2011
|
September 30, 2012
|
June 30, 2012
|
|
USD
|
USD
|
USD
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Loss from
operations
|
(17,422,364)
|
(3,251,634)
|
(5,442,593)
|
Share-based compensation expenses
|
6,741,153
|
2,096,569
|
1,603,824
|
Non-GAAP
income/loss from operation
|
(10,681,211)
|
(1,155,065)
|
(3,838,769)
|
|
|
|
|
|
|
|
|
Net loss attributable to ordinary shareholders
|
(17,541,286)
|
(1,456,027)
|
(5,779,610)
|
Share-based compensation expenses
|
6,741,153
|
2,096,569
|
1,603,824
|
Non-GAAP
net income/loss
|
(10,800,133)
|
640,542
|
(4,175,786)
|
|
|
|
|
Non-GAAP
weighted average numbers of shares used in calculating net income
(loss) per share:
|
|
|
|
--
Basic
|
46,268,513
|
101,139,801
|
101,138,565
|
--
Diluted
|
46,268,513
|
102,440,611
|
101,138,565
|
|
|
|
|
Non-GAAP
net income/loss per share
|
|
|
|
--
Basic
|
(0.23)
|
0.01
|
(0.04)
|
--
Diluted
|
(0.23)
|
0.01
|
(0.04)
|
|
|
|
|
Non-GAAP
net income/loss per ADS (2 ordinary shares equal to 1
ADS)
|
|
|
|
--
Basic
|
(0.47)
|
0.01
|
(0.08)
|
--
Diluted
|
(0.47)
|
0.01
|
(0.08)
|
SOURCE Vipshop Holdings Limited