BEIJING, Nov. 15, 2012 /PRNewswire/ -- E-Commerce China
Dangdang Inc. ("Dangdang" or the "Company") (NYSE: DANG), a leading
business-to-consumer e-commerce company in China, today announced its unaudited financial
results for the third quarter ended September 30, 2012.
Third Quarter Highlights
- Total net revenues in the third quarter of 2012 were
RMB1,287.6 million ($204.9 million), a 41.7% increase from the
corresponding period in 2011.
- Media revenue for the third quarter of 2012 was
RMB849.9 million ($135.2 million), an increase of 32.9% from the
corresponding period in 2011.
- General merchandise revenue for the third quarter of 2012 was
RMB397.4 million ($63.2 million), a 55.9% increase from the
corresponding period in 2011.
- As marketplace has expanded to represent a significant part of
Dangdang's business in 2012, starting from this quarter, the
Company will also report Gross Merchandise Value (GMV) of
marketplace. For comparative purposes, the historical GMV data for
the first and second quarters of 2012 have also been presented
below:
(RMB in
millions)
|
2012
Q1
|
2012
Q2
|
2012
Q3
|
GMV of
Marketplace
|
199.6
|
283.7
|
341.5
|
YoY growth rate
|
129%
|
200%
|
159%
|
- Starting from this quarter, the Company will report operational
data on customer and order numbers from Dangdang's whole platform
instead of from self-procurement business only, which it has
disclosed previously. Dangdang's whole platform includes both
self-procurement and marketplace. For comparative purposes, the
historical operational data for the first and second quarters of
2012 have also been presented below:
(in millions)
|
2012
Q1
|
2012
Q2
|
2012
Q3
|
Self-procurement
|
active
customers
|
6.1
|
5.7
|
|
new customers
|
1.9
|
1.7
|
orders
|
11.8
|
11.1
|
Dangdang's
Whole Platform
|
active
customers
|
6.1
|
5.9
|
7.0
|
new
customers
|
1.9
|
1.8
|
2.4
|
orders
|
12.3
|
12.0
|
13.9
|
- Dangdang had approximately 7.0 million active customers
for the whole platform in the third quarter of 2012,
representing a 26.4% increase from the corresponding period in
2011.
- Total orders for the whole platform were
approximately 13.9 million in the third quarter of 2012, a 29.1%
increase from the corresponding period in 2011.
"We are pleased to report the solid result of the third quarter.
Our sales grew at 41.7% year-over-year and reached a gross margin
at 15.2%. Dangdang continued to strengthen book and media's leading
position with growth of 33% year-over-year in the third quarter.
Other revenue, composed mainly of revenue from third-party
merchants, increased 183.4% year-over-year and 20.5%
quarter-over-quarter, reflecting the strong growth momentum of our
marketplace program," said Ms. Peggy Yu
Yu, Dangdang's Executive Chairwoman. "We have planned
promotional activities intelligently in terms of both timing and
theme. In the meanwhile, we invested in the fulfillment and
technology to improve the overall shopping experience," Ms. Yu
added.
"We leveraged the expenses in fulfillment in the third quarter,
and implemented next-day-delivery services in 158 cities,
evening-delivery services in 11 cities and same-day-delivery in 21
cities as part of our ongoing efforts to improve customer
services," commented Mr. Guoqing Li,
Chief Executive Officer. "We rented two additional warehouses in
Tianjin, which we started to
operate in August, bringing our total capacity to 370,000 square
meters now from 350,000 square meters at the end of second quarter
of 2012."
Third Quarter 2012 Results
Dangdang's total net revenues in the third quarter of
2012 were RMB1,287.6 million
($204.9 million), a 41.7% increase
from the corresponding period in 2011.
Media product revenue for the third quarter of 2012 was
RMB849.9 million ($135.2 million), representing a 32.9% increase
from the corresponding period in 2011. General merchandise
revenue for the third quarter of 2012 was RMB397.4 million ($63.2
million), representing a 55.9% increase from the
corresponding period in 2011. Other revenue including revenue
from third-party merchants for the third quarter of 2012 was
RMB40.3 million ($6.4 million), representing a 183.4% increase
from the corresponding period in 2011.
Dangdang had approximately 7.0 million active customers
for the whole platform in the third quarter of 2012,
representing a 26.4% increase from the corresponding period in
2011. Total orders for the whole platform for the
third quarter of 2012 were approximately 13.9 million, a 29.1%
increase from the corresponding period in 2011.
Cost of revenues was RMB1,091.4 million ($173.7
million), representing 84.8% of total revenues, as compared
to 86.2% in the corresponding period in 2011. The decreased cost of
revenues as a percentage of total revenues was primarily due to the
execution on the strategic category mapping to move certain
categories to the marketplace and economy of scale in some of
Dangdang's self-procurement categories. General merchandise
revenue for the third quarter of 2012 was RMB397.4 million ($63.2
million), representing 30.9% of total net revenues, as
compared to 28.1% in the corresponding period in 2011. Gross
margin in the third quarter of 2012 was 15.2%, as compared to
13.8% in the corresponding period in 2011. The year-over-year
increase was primarily due to the scaling of the marketplace and
the economy of scale in some of Dangdang's self-procurement
categories.
Fulfillment expenses, which include warehousing and
shipping expenses, were RMB185.7
million ($29.6 million),
representing 14.4% of total revenues, compared to 14.2% in the
corresponding period in 2011. The increase was primarily
attributable to the investments in improving fulfillment and
customer services.
Marketing expenses were RMB45.8
million ($7.3 million),
representing 3.6% of total revenues, compared to 4.4% in the
corresponding period in 2011. The decrease was primarily due to
more efficient marketing campaigns in the quarter.
Technology and content expenses were RMB40.8 million ($6.5
million), representing 3.2% of total revenues, compared to
2.3% in thecorresponding period in 2011. The increase was primarily
due to the increased in headcount and level of investment to
improve Dangdang customers' shopping experience and supply chain
management.
General and administrative expenses were RMB33.1 million ($5.3
million), representing 2.6% of total revenues, compared with
2.3% from the corresponding period in 2011. The increase was
primarily due to the increased headcount and charges of POD
service.
Share-based compensation expenses, which were allocated
to related expense line items, were RMB2.8
million ($0.4 million) in the
third quarter of 2012, an increase of 21.0% from the corresponding
period in 2011.
Dangdang recorded an operating loss of RMB104.6 million ($16.6
million) in the third quarter of 2012, as compared with an
operating loss of RMB81.9 million in
the corresponding period in 2011, primarily due to the increase in
cost of revenues and the increase in fulfillment and technology and
content expenses.
Operating loss excluding share-based compensation
expenses (non-GAAP) was RMB101.8
million ($16.2 million), as
compared with an operating loss excluding share-based compensation
expenses (non-GAAP) of RMB79.6
million in the corresponding period in 2011.
Operating margin was negative 8.1%, as compared
with an operating margin negative 9.0% in the corresponding period
in 2011.
Net loss was RMB100.1
million ($15.9 million), as
compared with a net loss of RMB73.4
million in the corresponding period in 2011, primarily due
to the increase in cost of revenues and the increase in fulfillment
and technology expenses.
Net margin was negative 7.8%, as compared with a
net margin negative 8.1% in the corresponding period in 2011.
Net loss excluding share-based compensation expenses
(non-GAAP) was RMB97.3 million
($15.5 million), as compared with a
net loss excluding share-based compensation expenses (non-GAAP) of
RMB71.1 million in the corresponding
period in 2011.
As of September 30, 2012, Dangdang
had cash and cash equivalents, time deposits with original
maturities exceeding three months and held-to-maturity
investments of RMB1,430.2 million
($227.6 million), as compared to
RMB1,391.8 million as of December 31, 2011.
Capital expenditures for the third quarter of 2012 were
RMB17.6 million ($2.8 million).
Adjusted EBITDA loss (non-GAAP) in the third quarter of
2012 was RMB90.6 million
($14.4 million), as compared with an
adjusted EBITDA loss of RMB72.4
million in the corresponding period in 2011,primarily due to
the increase in cost of revenues and the increase in fulfillment
and technology expenses.
Outlook for Fourth Quarter 2012
Dangdang expects its total net revenues in the fourth quarter of
2012 to be around RMB1,610 million
(or USD265 million). This forecast
reflects Dangdang's current and preliminary view, which is subject
to change.
Conference Call Information
Dangdang's management will host an earnings conference call at
8:00 AM on November 15, 2012 U.S. Eastern Time (or
9:00 PM on November 15, 2012 Beijing/Hong Kong time).
Dial-in details for the earnings conference call are as
follows:
US:
|
+1-718-354-1231
|
|
Hong Kong:
|
+852-2475-0994
|
|
International:
|
+65-6723-9381
|
|
Please dial-in 10 minutes before the call is scheduled to begin
and provide the passcode to join the call. The passcode is
"Dangdang earnings call."
A replay of the conference call may be accessed by phone at the
following number until November 21,
2012:
International:
|
+61-2-8199-0299
|
|
Conference
ID:
|
68984988
|
|
Additionally, a live and archived webcast of this conference
call will be available at http://ir.dangdang.com/ until
June 30, 2013.
About Dangdang
E-Commerce China Dangdang Inc. ("Dangdang" or the "Company")
(NYSE: DANG) is a leading business-to-consumer e-commerce company
in China. On its website
dangdang.com, the Company offers more than 880,000 books and other
media products as well as selected general merchandise products
including beauty and personal care products, home and lifestyle
products, baby, children and maternity products, apparel, digital
and electronics products. It also operates the dangdang.com
marketplace program, which allows third-party merchants to sell
their products alongside products sourced by the Company.
Dangdang's nationwide fulfillment and delivery capabilities,
high-quality customer service support and scalable technology
infrastructure enable it to provide a compelling online shopping
experience to customers.
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," "confident" and similar statements. Among
other things, the outlook for the fourth quarter 2012 and
quotations from management in this announcement, as well as
Dangdang's strategic and operational plans, contain forward-looking
statements. Dangdang may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission, 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
Dangdang'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: Dangdang's
growth strategies; its future business development, results of
operations and financial condition; its ability to attract and
retain new customers and to increase revenues generated from repeat
customers; its expectations regarding demand for and market
acceptance of our products and services; trends and competition in
China's business-to-consumer
e-commerce market; changes in its revenues and certain cost or
expense items; the expected growth of the Chinese
business-to-consumer e-commerce market; Chinese governmental
policies relating to Dangdang's industry and general economic
conditions in China. Further
information regarding these and other risks is included in
Dangdang's annual report on Form 20-F and other documents filed
with the Securities and Exchange Commission. Dangdang does not
undertake any obligation to update any forward-looking statement,
except as required under applicable law. All information provided
in this press release and in the attachments is as of the date of
this press release, and Dangdang undertakes no duty to update such
information, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement Dangdang's consolidated financial results
presented in accordance with United States Generally Accepted
Accounting Principles ("GAAP"), we use the following measures as
the non-GAAP financial measures defined by the SEC: non-GAAP
operating loss, non-GAAP operating margin, non-GAAP net loss and
adjusted EBITDA loss (collectively referred to as the "Non-GAAP
Financial Measures" thereafter). We define non-GAAP operating loss,
non-GAAP operating margin and non-GAAP net loss as operating
loss, operating margin and net loss excluding the impact of
share-based compensation expenses respectively; we define adjusted
EBITDA loss as loss before interest, taxes, depreciation,
amortization, other non-operating income, and share-based
compensation expenses. We review the Non-GAAP Financial Measures
together with net loss or income to obtain a better
understanding of our operating performance. We believe that
these Non-GAAP Financial Measures provide meaningful supplemental
information regarding the Company's performance and liquidity.
However, a limitation of using the Non-GAAP Financial Measures as
an analytical tool is that they do not include all items that
impact our net income/loss for the period. In addition, because
they are not calculated 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 the Non-GAAP Financial Measures in isolation from or
as an alternative to net income/loss prepared in accordance with
U.S. GAAP.
For information on the reconciliation between the Non-GAAP
Financial Measures and the GAAP financial measures presented
in accordance with U.S. GAAP for the periods presented, please see
the table captioned "Reconciliations of non-GAAP results of
operations measures to the nearest comparable GAAP financial
measures" at the end of this release.
For investor and media inquiries, please contact:
Maria Xin
Investor Relations Director
E-commerce China Dangdang Inc.
+86-10-5799-2306
xinyi@dangdang.com
Caroline Straathof
IR Inside
+31-6-5462-4301
info@irinside.com
E-Commerce China
Dangdang Inc.
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|
(In thousands, except
share related data)
|
|
Three Months
Ended
|
|
September 30,
2011
|
|
September 30,
2012
|
September 30,
2012
|
|
RMB
|
|
RMB
|
US$
|
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
Net revenues
|
|
|
|
|
Product
revenue
|
894,647
|
|
1,247,281
|
198,460
|
Media
|
639,680
|
|
849,856
|
135,224
|
General merchandise
|
254,967
|
|
397,425
|
63,236
|
Other
revenue
|
14,214
|
|
40,282
|
6,409
|
|
|
|
|
|
Total net
revenues
|
908,861
|
|
1,287,563
|
204,869
|
|
|
|
|
|
Cost of
revenues
|
(783,861)
|
|
(1,091,413)
|
(173,659)
|
|
|
|
|
|
Gross profit
|
125,000
|
|
196,150
|
31,210
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Fulfillment
|
(128,693)
|
|
(185,747)
|
(29,555)
|
Marketing
|
(40,375)
|
|
(45,839)
|
(7,294)
|
Technology and
content
|
(21,171)
|
|
(40,818)
|
(6,495)
|
General and
administrative
|
(21,005)
|
|
(33,143)
|
(5,274)
|
Government
grants
|
4,330
|
|
4,794
|
763
|
|
|
|
|
|
Total operating
expenses, net
|
(206,914)
|
|
(300,753)
|
(47,855)
|
|
|
|
|
|
Loss from
operations
|
(81,914)
|
|
(104,603)
|
(16,645)
|
|
|
|
|
|
Interest
income
|
8,323
|
|
8,122
|
1,292
|
|
|
|
|
|
Other income (expenses),
net
|
24,301
|
|
(3,578)
|
(569)
|
|
|
|
|
|
Loss before income
taxes
|
(49,290)
|
|
(100,059)
|
(15,922)
|
|
|
|
|
|
Income tax
expenses
|
(24,084)
|
|
-
|
-
|
|
|
|
|
|
Net loss
|
(73,374)
|
|
(100,059)
|
(15,922)
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
common shareholders
|
(73,374)
|
|
(100,059)
|
(15,922)
|
|
|
|
|
|
Net loss per common
share
|
|
|
|
|
- Basic
|
(0.19)
|
|
(0.25)
|
(0.04)
|
- Diluted
|
(0.19)
|
|
(0.25)
|
(0.04)
|
|
|
|
|
|
Net loss per
ADS
|
|
|
|
|
-
Basic
|
(0.95)
|
|
(1.25)
|
(0.20)
|
- Diluted
|
(0.95)
|
|
(1.25)
|
(0.20)
|
|
|
|
|
|
Net loss allocated to
common shareholders used in net loss per share/ADS
calculation
|
|
|
|
|
- Basic
|
(73,374)
|
|
(100,059)
|
(15,922)
|
- Diluted
|
(73,374)
|
|
(100,059)
|
(15,922)
|
Shares used in net loss
per common share computation:
|
|
|
|
|
|
|
|
|
|
Class A common
shares:
|
|
|
|
|
- Basic
|
251,686,758
|
|
268,583,299
|
268,583,299
|
- Diluted
|
396,040,652
|
|
400,499,959
|
400,499,959
|
Class B common
shares:
|
|
|
|
|
- Basic
|
144,353,894
|
|
131,916,660
|
131,916,660
|
- Diluted
|
144,353,894
|
|
131,916,660
|
131,916,660
|
|
|
|
|
|
ADSs used in net loss
per ADS calculation
|
|
|
|
|
- Basic
|
79,208,130
|
|
80,099,992
|
80,099,992
|
- Diluted
|
79,208,130
|
|
80,099,992
|
80,099,992
|
|
|
|
|
|
Other comprehensive
(loss) income
|
|
|
|
|
Foreign currency
translation adjustment, net of taxes
|
(22,060)
|
|
4,485
|
714
|
|
|
|
|
|
Comprehensive loss
attributable to common shareholders
|
(95,434)
|
|
(95,574)
|
(15,208)
|
E-Commerce China
Dangdang Inc.
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands, except
share related data)
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
2011
|
|
As of September 30,
2012
|
|
RMB
|
|
RMB
|
US$
|
|
(Audited)
|
|
(Unaudited)
|
(Unaudited)
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
192,962
|
|
585,359
|
93,139
|
Time deposits with
original maturities exceeding three months
|
1,178,839
|
|
844,839
|
134,426
|
Held-to-maturity
investments
|
20,000
|
|
-
|
-
|
Inventories
|
1,583,283
|
|
1,542,854
|
245,490
|
Accounts receivable,
net
|
67,369
|
|
60,841
|
9,681
|
Prepaid expenses and
other current assets (including expenses prepaid to related parties
amounting RMB9,625 and RMB2,406 (US$383) as of December 31, 2011
and September 30, 2012, respectively)
|
142,307
|
|
187,701
|
29,865
|
Amounts due from related
parties
|
188
|
|
323
|
51
|
Total current
assets
|
3,184,948
|
|
3,221,917
|
512,652
|
|
|
|
|
|
Fixed assets,
net
|
96,612
|
|
112,906
|
17,965
|
Intangible assets,
net
|
-
|
|
44,432
|
7,070
|
Prepaid expenses and
deposits
|
4,182
|
|
15,071
|
2,398
|
Total
assets
|
3,285,742
|
|
3,394,326
|
540,085
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term bank
loans
|
150,000
|
|
200,000
|
31,823
|
Accounts
payable
|
1,485,943
|
|
1,804,210
|
287,075
|
Deferred
revenue
|
213,230
|
|
209,215
|
33,289
|
Accrued expenses and
other current liabilities
|
266,092
|
|
307,402
|
48,912
|
Amounts due to related
parties
|
12,691
|
|
2,355
|
375
|
Total current
liabilities
|
2,127,956
|
|
2,523,182
|
401,474
|
Total
liabilities
|
2,127,956
|
|
2,523,182
|
401,474
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Class A common shares
(par value of US$0.0001 per share, 686,505,790 shares authorized,
265,082,760 and 268,876,230 shares issued and outstanding as of
December 31, 2011 and September 30, 2012, respectively)
|
197
|
|
200
|
32
|
Class B common shares
(par value of US$0.0001 per share, 313,494,210 shares authorized,
131,916,660 and 131,916,660 shares issued and outstanding as of
December 31, 2011 and September 30, 2012, respectively)
|
103
|
|
103
|
16
|
Additional paid-in
capital
|
1,825,873
|
|
1,851,289
|
294,566
|
Accumulated other
comprehensive loss
|
(88,336)
|
|
(78,633)
|
(12,512)
|
Accumulated
deficit
|
(580,051)
|
|
(901,815)
|
(143,491)
|
Total shareholders'
equity
|
1,157,786
|
|
871,144
|
138,611
|
Total liabilities and
shareholders' equity
|
3,285,742
|
|
3,394,326
|
540,085
|
Share-based
compensation
|
|
(In thousands, except
share related data)
|
|
|
|
|
|
|
Three Months
Ended
|
|
September 30,
2011
|
|
September 30,
2012
|
September 30,
2012
|
|
RMB
|
|
RMB
|
US$
|
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
Share-based compensation
expenses included are as follows:
|
|
|
|
Operating
expenses:
|
|
|
|
|
Fulfillment
|
65
|
|
478
|
76
|
Marketing
|
27
|
|
83
|
13
|
Technology and
content
|
197
|
|
248
|
39
|
General and
administrative
|
2,004
|
|
1,966
|
313
|
Total
|
2,293
|
|
2,775
|
441
|
|
|
|
|
|
(1) This announcement
contains translations of certain RMB amounts into U.S. dollars at
specified rates solely for the
convenience of the reader. Unless
otherwise noted, all translations from RMB to U.S. dollars are made
at a rate of
RMB6.2848 to US$1.00, the noon
buying rate on Sep 28, 2012 in The City of New York for cable
transfers of RMB
as certified for
customs purposes by the Federal Reserve Bank of New
York.
|
(2) Each ADS represents
five common shares of the Company.
|
Non-GAAP operating
loss, operating margin and net loss
|
|
(In
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
September 30,
2011
|
|
September 30,
2012
|
September 30,
2012
|
|
RMB
|
|
RMB
|
US$
|
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
Loss from
operations
|
(81,914)
|
|
(104,603)
|
(16,645)
|
Share-based compensation
expenses
|
2,293
|
|
2,775
|
441
|
Non-GAAP operating
loss
|
(79,621)
|
|
(101,828)
|
(16,204)
|
|
|
|
|
|
Operating
margin
|
-9.0%
|
|
-8.1%
|
-8.1%
|
Impact due to
share-based compensation expenses
|
0.3%
|
|
0.2%
|
0.2%
|
Non-GAAP operating
margin
|
-8.7%
|
|
-7.9%
|
-7.9%
|
|
|
|
|
|
Net loss
|
(73,374)
|
|
(100,059)
|
(15,922)
|
Share-based compensation
expenses
|
2,293
|
|
2,775
|
441
|
Non-GAAP net
loss
|
(71,081)
|
|
(97,284)
|
(15,481)
|
Adjusted
EBITDA
|
|
(In
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
September 30,
2011
|
|
September 30,
2012
|
September 30,
2012
|
|
RMB
|
|
RMB
|
US$
|
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
Loss from
operations
|
(81,914)
|
|
(104,603)
|
(16,645)
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
7,243
|
|
11,187
|
1,780
|
|
|
|
|
|
Share-based
compensation expenses
|
2,293
|
|
2,775
|
441
|
|
|
|
|
|
Adjusted
EBITDA
|
(72,378)
|
|
(90,641)
|
(14,424)
|
SOURCE E-commerce China Dangdang Inc.