Mecox Lane Limited Announces Third Quarter 2015 Results
SHANGHAI, China, Dec. 7, 2015 (GLOBE NEWSWIRE) — Mecox Lane Limited (“Mecox Lane” or the “Company”) (NASDAQ:MCOX), a multi-brand and multi-channel retailer in China specialized in health, beauty and lifestyle products, today announced its unaudited financial results for the third quarter ended September 30, 2015.Third Quarter 2015 HighlightsNet revenues increased 15.4% year over year to $15.1 million, compared to $13.1 million in the third quarter of 2014Gross profit1 was $10.1 million, compared to $8.3 million in the third quarter of 2014Gross margin was 67.1%, compared to 63.8% in the third quarter of 2014Net income was $1.1 million, compared to a net loss of $0.2 million in the third quarter of 2014“We achieved solid top-line revenue growth in the third quarter as we focused on driving sales of our new proprietary health and beauty products,” said Mecox Lane’s director and chief executive officer, Ms. Ingrid Wang. “Throughout the first nine months of 2015, we have optimized our product mix while leveraging online, mobile and offline platforms to reach new customers and deepen our engagement with existing customers. As we close out the year and look ahead to 2016, we will continue to explore cross-industry promotional opportunities while capitalizing on our proprietary data and customer engagement tools to develop tailored and targeted marketing opportunities that will help attract and retain customers and drive our growth.”Third Quarter 2015 ResultsThe Company presents its financial results on a year-over-year basis between the third quarter of 2015 and the third quarter of 2014, as in the following paragraphs. Mecox Lane completed the spin-off of its apparel and accessories business on September 18, 2014. As a result, financial results related to the apparel and accessories business were reclassified as discontinued operations for the fiscal quarter ended September 30, 2014. The following results reflect the Company’s continuing operations.Total Net RevenuesTotal net revenues were $15.1 million in the third quarter of 2015, representing a 15.4% increase from $13.1 million in the third quarter of 2014. The increase was mainly due to strong sales of new proprietary products, notably the Company’s functional nutrition enzyme supplement that was launched in the first quarter of 2015.Cost of Goods Sold2Cost of goods sold was $5.0 million in the third quarter of 2015, representing an increase of 5.1% from $4.7 million in the third quarter of 2014.Gross Profit and Gross MarginGross profit was $10.1 million in the third quarter of 2015, representing a 21.2% increase from $8.3 million in the third quarter of 2014. Gross margin was 67.1% in the third quarter of 2015, compared to 63.8% in the third quarter of 2014. The increase in gross margin was mainly due to a higher mix of proprietary product sales as a percentage of total sales compared to the third quarter of 2014.Operating ExpensesTotal operating expenses were $7.8 million in the third quarter of 2015, representing a 19.7% increase from $6.5 million in the third quarter of 2014.Selling, general and administrative expenses (SG&A) were $7.6 million in the third quarter of 2015, representing a 19.2% increase from $6.4 million in the third quarter of 2014, primarily due to higher sales bonuses related to increased sales, general increase in payroll and social welfare costs, as well as an increase in consulting fees related to the evaluation of the proposed privatization offer received by the Company on July 21, 2015, which were partially offset by a government subsidy of $0.4 million received in the third quarter of 2015.Income from OperationsIncome from operations was $2.3 million in the third quarter of 2015, compared to $1.8 million in the third quarter of 2014.Income from Continuing OperationsIncome from continuing operations was $1.1 million in the third quarter of 2015, compared to $0.1 million in the third quarter of 2014.Net Income (Loss) and Net Income (Loss) per ADSNet income was $1.1 million in the third quarter of 2015, compared to a net loss of $0.2 million in the third quarter of 2014. Non-GAAP net income3 was $1.1 million in the third quarter of 2015, compared to non-GAAP net loss of $0.1 million in the third quarter of 2014.Basic and diluted net income from continuing operations per American depositary share (“ADS”) attributable to Mecox Lane shareholders were $0.08 in the third quarter of 2015, compared to $0.01 per ADS in the third quarter of 2014. One ADS represents 35 ordinary shares.Basic and diluted net income from discontinued operations per ADS attributable to Mecox Lane shareholders were nil in the third quarter of 2015, compared to basic and diluted net loss from discontinued operations per ADS attributable to Mecox Lane shareholders of $0.03 in the third quarter of 2014.Cash and Short-term InvestmentsAs of September 30, 2015, Mecox Lane had cash and cash equivalents totaling $20.6 million, compared to $18.2 million as of December 31, 2014. Short-term investments as of September 30, 2015 were nil, compared to $0.7 million as of December 31, 2014.Conference Call InformationMecox Lane management will hold an earnings conference call at 8:00 p.m. U.S. Eastern Time on Monday, December 7, 2015 (9:00 a.m. Shanghai/Hong Kong Time on Tuesday, December 8, 2015) to discuss the Company’s financial results and operational highlights and to answer questions.A brief presentation to accompany the earnings call will be available on the Company’s website (http://ir.mecoxlane.com/events.cfm) at 6:00 p.m. U.S. Eastern Time on Monday, December 7, 2015 (7:00 a.m. Shanghai/Hong Kong Time on Tuesday, December 8, 2015).The dial-in numbers and passcode for the conference call are as follows:U.S. (toll-free): 1-855-500-8701
Mainland China: 400-120-0654
Hong Kong: 852-3018-6776
Passcode: 92901875Additionally, an archived webcast of this call will be available on the Investor Relations section of Mecox Lane’s website at http://ir.mecoxlane.com.About Mecox Lane LimitedMecox Lane Limited (Nasdaq:MCOX) is a multi-brand and multi-channel retailer in China specialized in health, beauty and lifestyle products. Since the Company’s founding in 1996 and its listing on the Nasdaq Global Select Market in 2010, Mecox Lane has focused on the evolving fashion and lifestyle needs of China’s young women through multiple retail channels. As part of a strategy shift under new management and in response to current market trends, the Company focuses on providing its broad base of urban and upwardly mobile customers with health and beauty products that are in step with their increasingly wellness-focused lifestyles. For more information on Mecox Lane, please visit http://ir.mecoxlane.com.Safe Harbor: Forward Looking StatementsThis press release contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as “may,” “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “aims,” “estimates,” “confident,” “likely to” and similar statements. Among other things, the quotations from management in this press release, as well as the Company’s strategic and operational plans, contain 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: the Company’s business strategies and initiatives as well as its business plans; the Company’s future business development, results of operations and financial condition; changes in the Company’s revenues and cost or expense items; the Company’s expectations with respect to increased revenue growth and its ability to sustain profitability; the Company’s products under development or planning; the Company’s ability to attract customers and further enhance its brand recognition; trends and competition in the industry in which the Company operates; the failure of the markets to grow at the projected rates; the rapidly changing nature of the industry in which the Company operates; and significant uncertainties of any projections or estimates relating to the growth prospects or future condition of the market. If any one or more of the assumptions underlying the market data turns out to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks is included in the Company’s annual report on Form 20-F as well as in its other filings with the Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and the Company undertakes no duty to update such information, except as required under applicable law.About Non-GAAP Financial MeasuresTo supplement Mecox Lane’s consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), Mecox Lane uses in this press release non-GAAP net income (loss), which excludes share-based compensation expenses. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.Mecox Lane believes that the non-GAAP financial measure facilitates investors’ and management’s comparisons to Mecox Lane’s historical performance and assists management’s financial and operational decision making. A limitation of using the non-GAAP financial measure is that share-based compensation expenses are recurring expenses that will continue to exist in Mecox Lane’s business for the foreseeable future. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from the non-GAAP measure. The accompanying table has more details on the reconciliation between the non-GAAP financial measure and its most directly comparable GAAP financial measure.______________________________
1 Gross profit excludes the impact of depreciation and amortization expenses.
2 Cost of goods sold excludes depreciation and amortization expenses.
3 Non-GAAP net loss and non-GAAP net income exclude share-based compensation expenses. The non-GAAP measures and related reconciliations to GAAP measures are described in the accompanying sections of “About Non-GAAP Financial Measures” and the accompanying table of “Mecox Lane Limited – Unaudited Consolidated Statement of Comprehensive Income/(Loss) – Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures” at the end of this press release.For investor and media inquiries please contact:
Mecox Lane Limited
Tel: +86 (21) 3108-1111 Ext. 8161
In the U.S.: +1 (646) 867-1888
In China: +86 (10) 8520-6139