LightInTheBox Reports Second Quarter 2020 Financial Results - 19.08.20 - News

BEIJING, Aug. 19, 2020

Second Quarter and First Half 2020 Financial Highlights

Three Months Ended

Year-over-

Six Months Ended

Year-over-

June 30,

ARIVA.DE Börsen-Geflüster

Kurse

Lightinthebox Holdings Ltd ADR

0,74 $

+5,56%

June 30,

Year %

June 30,

Year %

In millions, except percentages

2019

2020

Change

2019

2020

Change

Total revenues

$

58.1

$

113.9

95.9%

$

109.0

$

165.4

51.7%

Gross margin

41.9%

43.5%

38.6%

44.4%

Net income / (loss)

$

(7.3)

$

8.5

$

(21.4)

$

9.2

Adjusted EBITDA

$

0.9

$

9.1

920.8%

$

(7.0)

$

10.6

As of March 31,

As of June 30,

In millions

2020

Cash, cash equivalents and restricted cash

$

35.6

$

55.0

Mr. Jian He, Chief Executive Officer of LightInTheBox, commented, "Despite the continued macroeconomic uncertainty, we are proud of achieving a significant milestone in the second quarter operationally and financially. Total revenues were $113.9 million in the second quarter, nearly doubling that of the second quarter in 2019. At the same time, we achieved a net income of $8.5 million in comparison with $0.7 million net income in the preceding quarter and a net loss of $7.3 million in the same period of last year. These results reflected the success of our revamped strategy, which is to focus on optimizing product and category mix, enhancing supplier chain management and driving customer engagement. Looking ahead, we will continue to execute our established growth strategy, further enhance our partnership with key suppliers and improve the customer experience across regions we operate. We are confident that with our sound strategy and solid execution, we will be able to consistently achieve profitable growth and create long-term value for our shareholders."

Second Quarter 2020 Financial Results

Total revenues increased by 95.9% year-over-year to $113.9 million from $58.1 million in the same quarter of 2019. Revenues generated from product sales were $107.2 million, compared with $57.1 million in the same quarter of 2019. Revenues from service and others were $6.7 million, compared with $1.0 million in the same quarter of 2019.

Total cost of revenues was $64.3 million in the second quarter of 2020, compared with $33.8 million in the same quarter of 2019. Cost for product sales was $59.0 million in the second quarter of 2020, compared with $33.6 million in the same quarter of 2019. Cost for service and others was $5.3 million in the second quarter of 2020, compared with $0.2 million in the same quarter of 2019.

Gross profit in the second quarter of 2020 was $49.6 million, compared with $24.4 million in the same quarter of 2019. Gross margin was 43.5% in the second quarter of 2020, compared with 41.9% in the same quarter of 2019. The increase in gross margin was a result of the Company's continuous efforts to drive revenues from product categories with higher margins.

Total operating expenses in the second quarter of 2020 were $41.4 million, compared with $26.9 million in the same quarter of 2019.

Fulfillment expenses in the second quarter of 2020 were $7.4 million, compared with $4.9 million in the same quarter of 2019. As a percentage of total revenues, fulfillment expenses were 6.5% in the second quarter of 2020, compared with 8.4% in the same quarter of 2019 and 9.8% in the first quarter of 2020.
Selling and marketing expenses in the second quarter of 2020 were $26.5 million, compared with $11.5 million in the same quarter of 2019. As a percentage of total revenues, selling and marketing expenses were 23.3% for the second quarter of 2020, compared with 19.8% in the same quarter of 2019 and 28.7% in the first quarter of 2020.
G&A expenses in the second quarter of 2020 were $7.5 million, compared with $10.5 million in the same quarter of 2019. As a percentage of total revenues, G&A expenses were 6.6% for the second quarter of 2020, compared with 18.1% in the same quarter of 2019 and 14.1% in the first quarter of 2020. Included in G&A expenses, R&D expenses in the second quarter of 2020 were $3.3 million, compared with $4.1 million in the same quarter of 2019.

Income from operations was $8.2 million in the second quarter of 2020, compared with loss from operations of $2.6 million in the same quarter of 2019.

Net income was $8.5 million in the second quarter of 2020, compared with a net loss of $7.3 million in the same quarter of 2019.

Net income per American Depository Share ("ADS") was $0.08 in the second quarter of 2020, compared with net loss per ADS of $0.11 in the same quarter of 2019. Each ADS represents two ordinary shares. The diluted net income per ADS was $0.08 in the second quarter of 2020, compared with the diluted net loss per ADS of $0.11 in the same quarter of 2019.

In the second quarter of 2020, the Company's basic weighted average number of ADSs used in computing the net income per ADS was 111,798,193 and the diluted weighted average number of ADSs was 111,822,459.

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 earnings of $9.1 million in the second quarter of 2020, compared with earnings of $0.9 million in the same quarter of 2019.

As of June 30, 2020, the Company had cash and cash equivalents and restricted cash of $55.0 million, compared with $35.6 million as of March 31, 2020. The increase of the Company's cash position in the second quarter was mainly contributed by the cash inflow generated from its operating activities.

First Half 2020 Financial Results

Total revenues increased by 51.7% year-over-year to $165.4 million from $109.0 million in the same half of 2019. Revenues generated from product sales were $157.2 million, compared with $106.9 million in the same half of 2019. Revenues from service and others were $8.2 million, compared with $2.1 million in the same half of 2019.

Total cost of revenues was $91.9 million in the first half of 2020, compared with $66.9 million in the same half of 2019. Cost for product sales was $85.9 million in the first half of 2020, compared with $66.4 million in the same half of 2019. Cost for service and others was $6.0 million in the first half of 2020, compared with $0.5 million in the same half of 2019.

Gross profit in the first half of 2020 was $73.5 million, compared with $42.1 million in the same half of 2019. Gross margin was 44.4% in the first half of 2020, compared with 38.6% in the same half of 2019. The increase in gross margin was a result of the Company's continuous efforts to drive revenues from product categories with higher margins.

Total operating expenses in the first half of 2020 were $68.5 million, compared with $53.5 million in the same half of 2019.

Fulfillment expenses in the first half of 2020 were $12.4 million, compared with $10.2 million in the same half of 2019. As a percentage of total revenues, fulfillment expenses were 7.5% in the first half of 2020, compared with 9.3% in the same half of 2019.
Selling and marketing expenses in the first half of 2020 were $41.3 million, compared with $20.8 million in the same half of 2019. As a percentage of total revenues, selling and marketing expenses were 25.0% for the first half of 2020, compared with 19.1% in the same half of 2019.
G&A expenses in the first half of 2020 were $14.8 million, compared with $22.5 million in the same half of 2019. As a percentage of total revenues, G&A expenses were 8.9% for the first half of 2020, compared with 20.6% in the same half of 2019. Included in G&A expenses, R&D expenses in the first half of 2020 were $6.8 million, compared with $8.3 million in the same half of 2019.

Income from operations was $5.0 million in the first half of 2020, compared with loss from operations of $11.4 million in the same half of 2019.

Net income was $9.2 million in the first half of 2020, compared with a net loss of $21.4 million in the same half of 2019.

Net income per American Depository Share ("ADS") was $0.09 in the first half of 2020, compared with net loss per ADS of $0.32 in the same half of 2019. Each ADS represents two ordinary shares. The diluted net income per ADS for the first half of 2020 was $0.08, compared with the diluted net loss per ADS of $0.32 in the same half of 2019.

In the first half of 2020, the Company's basic weighted average number of ADSs used in computing the net income per ADS was 107,019,679, and 111,890,989 in diluted weighted average number.

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 earnings of $10.6 million in the first half of 2020, compared with loss of $7.0 million in the same half of 2019.

Business Outlook

For the third quarter of 2020, based on current information available to the Company and business seasonality, the Company expects net revenues to be between $95 million and $110 million, representing an increase between 59% and 83% compared with the third quarter of 2019.

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.

Conference Call

The Company will hold a conference call to discuss the results at 8:00 a.m. Eastern Time on August 19, 2020 (8:00 p.m. Beijing Time on the same day).

Preregistration Information

Participants can register for the conference call by navigating to http://apac.directeventreg.com/registration/event/6718979. Once preregistration has been complete, participants will receive dial-in numbers, an event passcode, and a unique registrant ID.

To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the event passcode followed by your unique registrant ID, and you will be joined to the conference instantly.

A telephone replay will be available two hours after the conclusion of the conference call through August 26, 2020. The dial-in details are:

US/Canada:

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