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Vipshop Reports Unaudited First Quarter 2014 Financial Results
First Quarter 2014 Highlights
- Total net revenues increased by 125.9% over the prior year period to
US$701.9 million , primarily attributable to a 165.1% increase in the number of active customers[1] to 7.4 million from 2.8 million and a 129.3% increase in total orders[2] to 20.2 million from 8.8 million over the prior year period. - Gross margin increased to 24.9% from 23.4% in the prior year period.
- Non-GAAP income from operations[3] increased by 394.3% year-over-year to
US$42.8 million fromUS$8.7 million in the prior year period. Non-GAAP operating income margin[4] increased to 6.1% from 2.8% in the prior year period. - Net income attributable to
Vipshop's shareholders increased by 355.3% toUS$26.6 million fromUS$5.8 million in the prior year period. Net income margin increased to 3.8% from 1.9% in the prior year period. - Non-GAAP net income attributable to
Vipshop's shareholders[5] increased by 318.2% toUS$37.7 million fromUS$9.0 million in the prior year period. Non-GAAP net income margin increased to 5.4% from 2.9% in the prior year period.
Mr.
Mr.
First Quarter 2014 Financial Results
REVENUES
Total net revenues increased by 125.9% to
The number of active customers for the first quarter of 2014 increased by 165.1% to 7.4 million from approximately 2.8 million in the prior year period. The number of total orders for the first quarter of 2014 increased by 129.3% to 20.2 million from 8.8 million in the prior year period. This increase was primarily due to increased brand recognition as well as the Company's continued efforts to optimize and increase brand and product selections available on its website. In addition, the Company has expanded its warehouse capacity to streamline suppliers' operations and effectively manage inventory, in order to facilitate and accommodate increased demands from customers as well as accelerate the delivery of purchased products.
GROSS PROFIT
Gross profit for the first quarter of 2014 increased by 140.3% to
OPERATING INCOME AND EXPENSES
Total operating expenses for the first quarter of 2014 increased by 115.0% to
- Fulfillment expenses increased by 97.8% to
US$74.6 million fromUS$37.7 million in the prior year period, primarily reflecting the increase in sales volume and number of orders fulfilled. As a percentage of total net revenues, fulfillment expenses decreased to 10.6% from 12.1% in the prior year period, which reflects the Company's continued efforts to reduce warehousing and personnel costs, negotiate better courier rates and leverage the increased order size. - Marketing expenses increased by 129.0% to
US$30.1 million fromUS$13.1 million in the prior year period. As a percentage of total net revenues, marketing expenses remained stable at 4.3% compared to 4.2% in the prior year period, reflecting the Company's continued efforts to control marketing expenses by retaining repeat customers and achieving high growth of new customers through word-of-mouth referrals. - Technology and content expenses increased by 134.8% to
US$18.7 million fromUS$7.9 million in the prior year period, primarily reflecting the Company's continued effort to invest in its website and IT systems to better support future growth. As a percentage of total net revenues, technology and content expenses remained stable at 2.7% compared with 2.6% in the prior year period. - General and administrative expenses increased by 146.1% to
US$24.1 million fromUS$9.8 million in the prior year period, primarily due to increased headcount and office rentals associated with the growth in the Company's overall business. As a percentage of total net revenues, general and administrative expenses increased to 3.4% from 3.2% in the prior year period due to the amortization ofUS$5.0 million of intangible assets resulting from the acquisition of Lefeng.
Income from operations increased by 452.0% to
Non-GAAP income from operations, which excludes
NET INCOME/LOSS
Net income attributable to
Non-GAAP net income attributable to
For the quarter ended
As of
For the first quarter of 2014, net cash from operating activities was
Business Outlook
For the second quarter of 2014, the Company expects its total net revenues to be between
Conference Call Information
The Company will hold a conference call on
United States: |
+1-845-675-0438 |
International Toll Free: |
+1-855-500-8701 |
China Domestic: |
400-1200654 |
Hong Kong: |
+852-3051-2745 |
Conference ID: |
#33943909 |
The replay will be accessible through
United States Toll Free: |
+1-855-452-5696 |
International: |
+61 2 9003 4211 |
Conference ID: |
#33943909 |
A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.vip.com.
About
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
Use of Non-GAAP Financial Measures
The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in
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 period. The active customer figure in 2014 includes active Lefeng customers after the Lefeng acquisition was completed in February 2014. |
[2] |
Total orders are defined as the total number of orders placed during the period. The total order figure in 2014 includes orders attributable to Lefeng after the Lefeng acquisition was completed in February 2014. |
[3] |
Non-GAAP income from operations is a non-GAAP financial measure, which is defined as income from operations excluding share-based compensation expenses and amortization of intangible assets resulting from the Lefeng acquisition. |
[4] |
Non-GAAP operating income margin is a non-GAAP financial measure, which is defined as non-GAAP income from operations as a percentage of total net revenues. |
[5] |
Non-GAAP net income attributable to Vipshop's shareholders is a non-GAAP financial measure, which is defined as net income attributable to Vipshop's shareholders excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisitions. |
[6] |
"ADS" means American Depositary Share. Each ADS represents two ordinary shares, par value US$0.0001 per share, of the Company. |
Vipshop Holdings Limited |
|||
Condensed Consolidated Statements of Income and Comprehensive Income |
|||
(In US dollars, except for share data) |
|||
Three Months Ended |
|||
March 31, 2013 |
March 31, 2014 |
December 31, 2013 |
|
USD |
USD |
USD |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Product revenues |
306,522,548 |
691,379,609 |
641,801,263 |
Other revenues (1) |
4,136,133 |
10,548,373 |
9,215,025 |
Total net revenues |
310,658,681 |
701,927,982 |
651,016,288 |
Cost of goods sold |
(237,908,540) |
(527,116,531) |
(491,590,070) |
Gross profit |
72,750,141 |
174,811,451 |
159,426,218 |
Operating expenses |
|||
Fulfillment expenses(2) |
(37,699,224) |
(74,586,133) |
(73,203,384) |
Marketing expenses |
(13,126,003) |
(30,053,706) |
(28,902,617) |
Technology and content expenses |
(7,948,145) |
(18,660,941) |
(14,166,544) |
General and administrative expenses(3) |
(9,804,914) |
(24,132,185) |
(17,466,907) |
Total operating expenses |
(68,578,286) |
(147,432,965) |
(133,739,452) |
Other income |
1,306,068 |
2,862,209 |
3,873,895 |
Income from operations |
5,477,923 |
30,240,695 |
29,560,661 |
Interest expense |
— |
(1,628,282) |
— |
Interest income |
2,436,478 |
8,198,147 |
5,870,876 |
Exchange gain (loss) |
(222,618) |
(1,057,905) |
251,980 |
Share of loss of an affiliate |
— |
(754,714) |
— |
Income before income taxes |
7,691,783 |
34,997,941 |
35,683,517 |
Income tax expenses(4) |
(1,850,610) |
(10,323,486) |
(10,284,887) |
Net income |
5,841,173 |
24,674,455 |
25,398,630 |
Net loss attributable to noncontrolling interests |
— |
1,919,566 |
— |
Net income attributable to Vipshop's shareholders |
5,841,173 |
26,594,021 |
25,398,630 |
Weighted average numbers of shares used in calculating earnings per share: |
|||
—Basic |
103,004,723 |
111,919,288 |
111,366,346 |
—Diluted |
109,132,970 |
119,160,971 |
117,668,616 |
Net earnings per share |
|||
Net income attributable to Vipshop's shareholders——Basic |
0.06 |
0.24 |
0.23 |
Net income attributable to Vipshop's shareholders——Diluted |
0.05 |
0.23 |
0.22 |
Net earnings per ADS (2 ordinary shares equal to 1 ADS) |
|||
Net income attributable to Vipshop's shareholders——Basic |
0.11 |
0.48 |
0.46 |
Net income attributable to Vipshop's shareholders——Diluted |
0.11 |
0.46 |
0.43 |
(1)Other revenues primarily consist of revenues from product promotion and online advertising, fees charged to third-party merchants which the Company provides platform access for sales of their product. |
|||
(2) Including shipping and handling expenses, which amounted US$24 million, US$45.8million and US$43 million in the three month periods ended March 31, 2013, March 31, 2014 and December 31, 2013, respectively. |
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(3)Including amortization of intangible assets resulting from a business acquisition, which amounted to US$5 million in the three months period ended March 31, 2014. |
|||
(4)For the three months period ended March 31, 2014, included income tax benefits of US$1.3 million related to the reversal of deferred tax liabilities, which was recognized on the businss acquisition of Lefeng. |
|||
Net income |
5,841,173 |
24,674,455 |
25,398,630 |
Other comprehensive income (loss), net of tax: |
|||
Foreign currency translation adjustments |
219,668 |
(5,193,583) |
2,022,857 |
Comprehensive income (loss) |
6,060,841 |
19,480,872 |
27,421,487 |
Less: Comprehensive income (loss) attributable to non-controlling interests |
— |
(1,898,431) |
— |
Comprehensive income attributable to Vipshop's shareholders |
6,060,841 |
21,379,303 |
27,421,487 |
Three Months Ended |
|||
March 31, 2013 |
March 31, 2014 |
December 31, 2013 |
|
USD |
USD |
USD |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Share-based compensation charges included are follows |
|||
Fulfillment expenses |
77,771 |
332,925 |
246,858 |
Marketing expenses |
80,247 |
691,552 |
109,228 |
Technology and content expenses |
261,343 |
3,543,906 |
1,404,929 |
General and administrative expenses |
2,766,446 |
3,019,028 |
1,659,580 |
Total |
3,185,807 |
7,587,411 |
3,420,595 |
Vipshop Holdings Limited |
|||
Condensed Consolidated Balance Sheets |
|||
(Amounts in US dollars) |
|||
As of December 31, 2013 |
As of March 31, 2014 |
||
USD |
USD |
||
ASSETS |
(Audited) |
(Unaudited) |
|
CURRENT ASSETS |
|||
Cash and cash equivalents |
334,715,019 |
871,774,767 |
|
Restricted securities(1) |
— |
179,077,703 |
|
Held-to-maturity securities |
385,841,626 |
332,491,166 |
|
Accounts receivable |
3,055,446 |
4,488,283 |
|
Amounts due from related parties |
— |
— |
|
Other receivables |
16,481,032 |
20,466,154 |
|
Inventories |
270,126,305 |
306,087,577 |
|
Advance to suppliers |
13,216,869 |
12,477,722 |
|
Prepaid expenses |
2,384,801 |
1,661,113 |
|
Deferred tax assets |
11,126,647 |
10,364,395 |
|
Total current assets |
1,036,947,745 |
1,738,888,880 |
|
NON-CURRENT ASSETS |
|||
Property and equipment, net |
24,299,418 |
34,699,771 |
|
Deposits for property and equipment |
5,518,404 |
20,280,365 |
|
Intangible assets |
5,294,375 |
214,961,169 |
|
Investment in an affiliate |
— |
55,022,240 |
|
Other investment |
1,006,083 |
||
Goodwill |
— |
2,441,632 |
|
Total non-current assets |
35,112,197 |
328,411,260 |
|
TOTAL ASSETS |
1,072,059,942 |
2,067,300,140 |
|
LIABILTIES AND EQUITY |
|||
CURRENT LIABILITIES |
|||
Accounts payable (Including accounts |
476,847,881 |
532,670,338 |
|
Advance from customers (Including advance from customers of the VIE without recourse to the Company of $131,781,751 and $114,488,013 as of December 31, 2013 and March 31, 2014, respectively) |
131,781,751 |
115,166,104 |
|
Accrued expenses and other current liabilities(Including accrued expenses and other current liabilities of the VIE without recourse to the Company of $ 101,097,647 and $ 117,107,317 as of December 31, 2013 and March 31, 2014, respectively) |
196,327,519 |
223,222,238 |
|
Amounts due to related parties(Including amounts due to related parties of the VIE without recourse to the Company of $1,369,767 and $ 1,090,308 as of December 31, 2013 and March 31, 2014, respectively) |
2,141,411 |
25,275,832 |
|
Deferred income (Including deferred income of the VIE without recourse to the Company of $ 20,592,249 and $ 24,768,610 as of December 31, 2013 and March 31, 2014, respectively) |
21,705,981 |
26,072,502 |
|
Short-term loans |
— |
170,299,980 |
|
Total current liabilities |
828,804,543 |
1,092,706,994 |
|
NON-CURRENT LIABILITIES |
|||
Deferred tax liabilities |
— |
48,726,060 |
|
Notes payable |
— |
617,437,817 |
|
Total non-current liabilities |
— |
666,163,877 |
|
Total liabilities |
828,804,543 |
1,758,870,871 |
|
EQUITY: |
|||
Ordinary shares (US$0.0001 par value, 471,620,833 shares authorized, and 111,665,972 and 113,028,037 shares issued and outstanding as of December 31, 2013 and March 31, 2014, respectively) |
11,167 |
11,303 |
|
Additional paid-in capital |
363,221,310 |
371,414,172 |
|
Accumulated losses |
(123,725,472) |
(97,131,451) |
|
Accumulated other comprehensive income |
3,748,394 |
(1,445,189) |
|
Non-controlling interest |
— |
35,580,434 |
|
Total shareholders' equity |
243,255,399 |
308,429,269 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
1,072,059,942 |
2,067,300,140 |
|
(1)Restrited securities consist of held-to-maturity securities pledged to banks for the short term loans. |
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Vipshop Holdings Limited |
|||
Reconciliations of GAAP and Non-GAAP Results |
|||
Three Months Ended |
|||
March 31, 2013 |
March 31, 2014 |
December 31, 2013 |
|
USD |
USD |
USD |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Income from operations |
5,477,923 |
30,240,695 |
29,560,661 |
Share-based compensation expenses |
3,185,807 |
7,587,411 |
3,420,595 |
Amortization of intangible assets resulting from business acquisition |
— |
4,997,545 |
— |
Non-GAAP income from operations |
8,663,730 |
42,825,651 |
32,981,256 |
Net income |
5,841,173 |
24,674,455 |
25,398,630 |
Share-based compensation expenses |
3,185,807 |
7,587,411 |
3,420,595 |
Amortization of intangible assets resulting from business acquisition (net of tax) |
— |
4,503,857 |
— |
Non-GAAP net income |
9,026,980 |
36,765,723 |
28,819,225 |
Net income attributable to Vipshop's shareholders |
5,841,173 |
26,594,021 |
25,398,630 |
Share-based compensation expenses |
3,185,807 |
7,587,411 |
3,420,595 |
Amortization of intangible assets resulting from business acquisition (exclude non-controlling interests and net of tax) |
— |
3,566,817 |
— |
Non-GAAP net income attributable to Vipshop's shareholders |
9,026,980 |
37,748,249 |
28,819,225 |
Non-GAAP weighted average numbers of shares used in calculating net income per share: |
|||
—Basic |
103,004,723 |
111,919,288 |
111,366,346 |
—Diluted |
109,132,970 |
119,160,971 |
117,668,616 |
Non-GAAP net income per share |
|||
Non-GAAP net income attributable to Vipshop's shareholders——Basic |
0.09 |
0.34 |
0.26 |
Non-GAAP net income attributable to Vipshop's shareholders——Diluted |
0.08 |
0.32 |
0.25 |
Non-GAAP net income per ADS (2 ordinary shares equal to 1 ADS) |
|||
Non-GAAP net income attributable to Vipshop's shareholders——Basic |
0.18 |
0.67 |
0.52 |
Non-GAAP net income attributable to Vipshop's shareholders——Diluted |
0.17 |
0.63 |
0.49 |
SOURCE
Investor Relations Contact, Vipshop Holdings Limited , Millicent Tu , +86 (20) 2233-0732, IR@vipshop.com; ICR, Inc., Qiyiana Tian, +1 (646) 405-4866, IR@vipshop.com