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Vipshop Reports Unaudited Third Quarter 2014 Financial Results
Third Quarter 2014 Highlights
- Total net revenues increased by 130.0% year over year to
US$882.6 million , primarily attributable to a 136.8% year-over-year increase in the number of active customers[1] to 9.5 million and a 117.6% year-over-year increase in total orders to 25.5 million. - Gross margin increased to 24.9% from 24.2% in the prior year period.
- Income from operations increased by 76.6% to
US$21.3 million fromUS$12.0 million in the prior year period. - Non-GAAP income from operations[2] increased by 178.9% to
US$42.1 million fromUS$15.1 million in the prior year period. Non-GAAP operating income margin[3] increased to 4.8% from 3.9% in the prior year period. - Net income attributable to
Vipshop's shareholders increased by 130.3% toUS$27.7 million fromUS$12.0 million in the prior year period. - Non-GAAP net income attributable to
Vipshop's shareholders[4] increased by 206.8% toUS$46.3 million fromUS$15.1 million in the prior year period. Non-GAAP net income margin increased to 5.2% from 3.9% in the prior year period.
Mr.
Mr.
Third Quarter 2014 Financial Results
REVENUES
Total net revenues increased by 130.0% to
The number of active customers for the third quarter of 2014 increased by 136.8% to 9.5 million from 4.0 million in the prior year period. The number of total orders for the third quarter of 2014 increased by 117.6% to 25.5 million from 11.7 million in the prior year period. This increase was primarily due to increased brand recognition, the Company's continued efforts to optimize and diversify brand and product selections available on both PC and mobile platforms, as well as the Lefeng acquisition.
GROSS PROFIT
Gross profit for the third quarter of 2014 increased by 136.1% to
OPERATING INCOME AND EXPENSES
Total operating expenses for the third quarter of 2014 increased by 147.7% to
- Fulfillment expenses increased by 91.5% to
US$84.4 million fromUS$44.1 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 9.6% from 11.5% in the prior year period, which reflects the Company's continued efforts to reduce warehousing and personnel costs, and negotiate better courier rates leveraging the growing order volume. - Marketing expenses increased by 170.8% to
US$47.1 million fromUS$17.4 million in the prior year period. As a percentage of total net revenues, marketing expenses increased to 5.3% from 4.5% in the prior year period, reflecting the Company's strategy to reinvest its profit in the business to drive long term growth, by building greater brand awareness, acquiring more mobile users, and expanding market share in core product categories other than apparel, such as cosmetics, home goods and baby products. - Technology and content expenses increased by 225.4% to
US$31.3 million fromUS$9.6 million in the prior year period, primarily reflecting the Company's continued effort to invest in its overall IT systems and expand headcount to better support future growth. As a percentage of total net revenues, technology and content expenses increased to 3.5% from 2.5% in the prior year period. - General and administrative expenses increased by 259.4% to
US$42.8 million fromUS$11.9 million in the prior year period. As a percentage of total net revenues, general and administrative expenses increased to 4.9% from 3.1% in the prior year period, primarily due to headcount expansion and office rentals associated with the growth in the Company's overall business, the amortization of intangible assets resulting from the Lefeng acquisition, as well as the increase in online payment expenses.
Income from operations increased by 76.6% to
Non-GAAP income from operations, which excludes share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, increased by 178.9% to
NET INCOME
Net income attributable to
Non-GAAP net income attributable to
For the quarter ended
As of
For the quarter ended
Business Outlook
For the fourth 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: |
+852-3018-6776 |
Conference ID: |
#31704899 |
The replay will be accessible through
United States Toll Free: |
+1-855-452-5696 |
International: |
+61 2 9003 4211 |
Conference ID: |
#31704899 |
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] |
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. |
[3] |
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. |
[4] |
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. |
[5] |
"ADS" means American Depositary Share. Effective November 3, 2014, the Company changed its ADS to Class A Ordinary Share ("Share") ratio from one ADS representing two ordinary shares to five ADSs representing one ordinary share. The computation of GAAP and non-GAAP income per diluted ADS have been adjusted retroactively for all periods presented to reflect this change. |
Vipshop Holdings Limited |
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Condensed Consolidated Statements of Income and Comprehensive Income |
|||
(In US dollars, except for share data) |
|||
Three Months Ended |
|||
September 30,2013 |
September 30,2014 |
June 30,2014 |
|
USD |
USD |
USD |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Product revenues |
381,209,303 |
859,883,977 |
816,700,081 |
Other revenues (1) |
2,499,249 |
22,744,912 |
12,745,006 |
Total net revenues |
383,708,552 |
882,628,889 |
829,445,087 |
Cost of goods sold |
(290,742,385) |
(663,103,397) |
(623,667,705) |
Gross profit |
92,966,167 |
219,525,492 |
205,777,382 |
Operating expenses |
|||
Fulfillment expenses(2) |
(44,094,258) |
(84,427,176) |
(83,845,955) |
Marketing expenses |
(17,377,035) |
(47,052,468) |
(44,773,456) |
Technology and content expenses |
(9,628,377) |
(31,325,933) |
(21,397,711) |
General and administrative expenses(3) |
(11,916,875) |
(42,825,327) |
(36,886,571) |
Total operating expenses |
(83,016,545) |
(205,630,904) |
(186,903,693) |
Other income |
2,090,512 |
7,365,827 |
4,834,168 |
Income from operations |
12,040,134 |
21,260,415 |
23,707,857 |
Other non-operating income |
- |
2,572,040 |
739,993 |
Interest expense |
- |
(3,938,662) |
(4,681,188) |
Interest income |
3,750,788 |
11,795,681 |
13,437,525 |
Exchange gain (loss) |
287,799 |
3,518,172 |
713,015 |
Income before income taxes |
16,078,721 |
35,207,646 |
33,917,202 |
Income tax expenses(4) |
(4,051,836) |
(10,400,814) |
(9,472,549) |
Share of loss of affiliates |
- |
(2,080,214) |
(1,825,695) |
Net income |
12,026,885 |
22,726,618 |
22,618,958 |
Net loss attributable to noncontrolling interests |
- |
4,969,021 |
3,767,782 |
Net income attributable to Vipshop's shareholders |
12,026,885 |
27,695,639 |
26,386,740 |
Shares used in calculating earnings per share: |
|||
Class A common shares: |
|||
—Basic |
94,292,285 |
97,215,769 |
96,704,297 |
—Diluted |
100,433,223 |
102,910,238 |
102,917,277 |
Class B common shares: |
|||
—Basic |
16,510,358 |
16,510,358 |
16,510,358 |
—Diluted |
16,510,358 |
16,510,358 |
16,510,358 |
Net earnings per Class A share |
|||
Net income attributable to Vipshop's shareholders——Basic |
0.11 |
0.24 |
0.23 |
Net income attributable to Vipshop's shareholders——Diluted |
0.10 |
0.23 |
0.22 |
Net earnings per Class B share |
|||
Net income attributable to Vipshop's shareholders——Basic |
0.11 |
0.24 |
0.23 |
Net income attributable to Vipshop's shareholders——Diluted |
0.10 |
0.23 |
0.22 |
Net earnings per ADS (1 ordinary share equal to 5 ADSs) |
|||
Net income attributable to Vipshop's shareholders——Basic |
0.02 |
0.05 |
0.05 |
Net income attributable to Vipshop's shareholders——Diluted |
0.02 |
0.05 |
0.04 |
(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. |
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(2) Including shipping and handling expenses, which amounted US$26.6 million, US$40.1 million and US$39.9 million in the three month periods ended September 30, 2013, September 30, 2014 and June 30, 2014, respectively. |
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(3)Including amortization of intangible assets resulting from a business acquisition, which amounted to US$10 million and US$10 million in the three months period ended September 30, 2014 and June 30, 2014, respectively. |
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(4 Included income tax benefits of US$2.5 million and US$2.5 million related to the reversal of deferred tax liabilities, which was recognized on the businss acquisition of Lefeng for the three months period ended September 30, 2014 and June 30, 2014, respectively. |
|||
Net income |
12,026,885 |
22,726,618 |
22,618,958 |
Other comprehensive income (loss), net of tax: |
|||
Foreign currency translation adjustments |
347,096 |
2,334,966 |
-157,313 |
Comprehensive income |
12,373,981 |
25,061,584 |
22,461,645 |
Less: Comprehensive loss attributable to non-controlling interests |
— |
-4,929,005 |
-3,749,552 |
Comprehensive income attributable to Vipshop's shareholders |
12,373,981 |
29,990,589 |
26,211,197 |
Three Months Ended |
|||
September 30,2013 |
September 30,2014 |
June 30,2014 |
|
USD |
USD |
USD |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Share-based compensation charges included are follows |
|||
Fulfillment expenses |
211,958 |
549,512 |
366,942 |
Marketing expenses |
100,734 |
803,136 |
736,025 |
Technology and content expenses |
919,511 |
5,059,331 |
4,417,919 |
General and administrative expenses |
1,825,952 |
4,436,586 |
3,645,298 |
Total |
3,058,155 |
10,848,565 |
9,166,184 |
Vipshop Holdings Limited |
||
Condensed Consolidated Balance Sheets |
||
(Amounts in US dollars) |
||
As of December 31, 2013 |
As of September 30, 2014 |
|
USD |
USD |
|
ASSETS |
(Unaudited) |
(Unaudited) |
CURRENT ASSETS |
||
Cash and cash equivalents |
334,715,019 |
668,138,066 |
Restricted cash |
— |
65,226 |
Held-to-maturity securities |
385,841,626 |
491,064,556 |
Accounts receivable |
3,055,446 |
14,181,062 |
Amounts due from related party |
— |
956,058 |
Other receivables |
16,481,032 |
56,067,808 |
Inventories |
270,126,305 |
468,777,624 |
Advance to suppliers |
13,216,869 |
16,143,574 |
Prepaid expenses |
2,384,801 |
3,703,690 |
Deferred tax assets |
11,126,647 |
25,258,228 |
Total current assets |
1,036,947,745 |
1,744,355,892 |
NON-CURRENT ASSETS |
||
Property and equipment, net |
24,299,418 |
213,492,616 |
Deposits for property and equipment |
5,518,404 |
41,239,865 |
Intangible assets |
5,294,375 |
179,375,206 |
Investment in affiliates |
— |
51,719,134 |
Other investments |
— |
5,160,822 |
Goodwill |
— |
2,387,671 |
Total non-current assets |
35,112,197 |
493,375,314 |
TOTAL ASSETS |
1,072,059,942 |
2,237,731,206 |
LIABILTIES AND EQUITY |
||
CURRENT LIABILITIES |
||
Accounts payable (Including accounts |
476,847,881 |
727,292,105 |
Advance from customers (Including advance from customers of the VIE without recourse to the Company of $131,781,751 and $157,792,090 as of December 31, 2013 and September 30, 2014, respectively) |
131,781,751 |
167,841,832 |
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 $ 133,565,822 as of December 31, 2013 and September 30, 2014, respectively) |
196,327,519 |
263,118,762 |
Amounts due to related parties(Including amounts due to related parties of the VIE without recourse to the Company of $1,369,767 and $ 1,437,233 as of December 31, 2013 and September 30, 2014, respectively) |
2,141,411 |
5,262,903 |
Deferred income (Including deferred income of the VIE without recourse to the Company of $ 20,592,249 and $ 31,023,552 as of December 31, 2013 and September 30, 2014, respectively) |
21,705,981 |
32,535,198 |
Total current liabilities |
828,804,543 |
1,196,050,800 |
NON-CURRENT LIABILITIES |
||
Deferred tax liabilities |
— |
43,730,582 |
Notes payable |
— |
620,019,906 |
Total non-current liabilities |
— |
663,750,488 |
Total liabilities |
828,804,543 |
1,859,801,288 |
EQUITY: |
||
Class A common shares (US$0.0001 par value, 483,489,642 shares authorized, and 111,665,972 and 97,671,140 shares issued and outstanding as of December 31, 2013 and September 30, 2014, respectively) |
11,167 |
9,767 |
Class B common shares (US$0.0001 par value, 16,510,358 shares authorized, and nil and 16,510,358 shares issued and outstanding as of December 31, 2013 and September 30, 2014, respectively) |
— |
1,651 |
Additional paid-in capital |
363,221,310 |
392,927,550 |
Accumulated losses |
(123,725,472) |
(43,049,072) |
Accumulated other comprehensive income |
3,748,394 |
732,464 |
Non-controlling interest |
— |
27,307,558 |
Total shareholders' equity |
243,255,399 |
377,929,918 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
1,072,059,942 |
2,237,731,206 |
Vipshop Holdings Limited |
|||
Reconciliations of GAAP and Non-GAAP Results |
|||
Three Months Ended |
|||
September 30,2013 |
September 30,2014 |
June 30,2014 |
|
USD |
USD |
USD |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Income from operations |
12,040,134 |
21,260,415 |
23,707,857 |
Share-based compensation expenses |
3,058,155 |
10,848,565 |
9,166,184 |
Amortization of intangible assets resulting from business acquisition |
— |
9,996,270 |
9,995,089 |
Non-GAAP income from operations |
15,098,289 |
42,105,250 |
42,869,130 |
Net income |
12,026,885 |
22,726,618 |
22,618,958 |
Share-based compensation expenses |
3,058,155 |
10,848,565 |
9,166,184 |
Amortization of intangible assets resulting from business acquisition (net of tax) |
— |
9,604,580 |
9,314,326 |
Non-GAAP net income |
15,085,040 |
43,179,763 |
41,099,468 |
Net income attributable to Vipshop's shareholders |
12,026,885 |
27,695,639 |
26,386,740 |
Share-based compensation expenses |
3,058,155 |
10,848,565 |
9,166,184 |
Amortization of intangible assets resulting from business acquisition (exclude non-controlling interests and net of tax) |
— |
7,730,279 |
7,440,248 |
Non-GAAP net income attributable to Vipshop's shareholders |
15,085,040 |
46,274,483 |
42,993,172 |
Shares used in calculating earnings per share: |
|||
Class A common shares: |
|||
—Basic |
94,292,285 |
97,215,769 |
96,704,297 |
—Diluted |
100,433,223 |
102,910,238 |
102,917,277 |
Class B common shares: |
|||
—Basic |
16,510,358 |
16,510,358 |
16,510,358 |
—Diluted |
16,510,358 |
16,510,358 |
16,510,358 |
Non-GAAP net income per Class A share |
|||
Non-GAAP net income attributable to Vipshop's shareholders——Basic |
0.14 |
0.41 |
0.38 |
Non-GAAP net income attributable to Vipshop's shareholders——Diluted |
0.13 |
0.39 |
0.36 |
Non-GAAP net income per Class B share |
|||
Non-GAAP net income attributable to Vipshop's shareholders——Basic |
0.14 |
0.41 |
0.38 |
Non-GAAP net income attributable to Vipshop's shareholders——Diluted |
0.13 |
0.39 |
0.36 |
Non-GAAP net income per ADS (1 ordinary share equal to 5 ADSs) |
|||
Non-GAAP net income attributable to Vipshop's shareholders——Basic |
0.03 |
0.08 |
0.08 |
Non-GAAP net income attributable to Vipshop's shareholders——Diluted |
0.03 |
0.08 |
0.07 |
SOURCE
Investor Relations Contact: Vipshop Holdings Limited, Millicent Tu, Tel: +86 (20) 2233-0732, Email: IR@vipshop.com; ICR, Inc., Chenjiazi Zhong, Tel: +1 (646) 405-4866, Email: IR@vipshop.com