LightInTheBox Reports Third Quarter 2021 Financial Results

SHANGHAI, Dec. 2, 2021 /PRNewswire/ -- LightInTheBox Holding Co., Ltd. (NYSE: LITB) ("LightInTheBox" or the "Company"), a cross-border e-commerce platform that delivers products directly to consumers around the world, today announced its unaudited financial results for the third quarter ended September 30, 2021.

Third Quarter and First Nine Months 2021 Financial Highlights

Mr. Jian He, Chief Executive Officer of LightInTheBox, commented, "We experienced certain cost pressures and challenging global economic conditions this quarter, which caused our results to be materially affected by external factors including higher than anticipated digital advertising cost, new European laws on VAT and market regulation on certain products, and changes in consumer sentiment and spending. Our operational costs were also affected by rising shipping and delivery cost, and fluctuation in foreign exchange rates. Despite the challenging economic environment, we are always optimizing our product mix especially for the higher margin apparel categories compared to standard categories like electronics. Our strength and experience in apparel has given us the capabilities to quickly respond to market uncertainties and meet the demand of evolving fashion trends. We remain committed to our proven growth strategy that capitalizes on our advantages in value-added services for online purchases and provides consumers with a well curated variety of globally sourced quality products. Total revenues for the third quarter were $98.7 million, compared with $100.0 million in the same quarter of 2020, while gross margin improved to 44.5 percent.  During the third quarter, apparel sales represented 64.5% of our total product sales, up by 39.6% to $61.9 million in the third quarter of 2021 compared with $44.4 million of the same quarter in the prior year, which was largely attributed to our continuous efforts in R&D to provide trending fashion insights to our designers and suppliers. We remain firmly on course with our growth momentum and our values and are always reaching beyond our customers' expectations as their comprehensive and reliable shopping destination of choice."

Third Quarter 2021 Financial Results

Total revenues remained relatively stable year-over-year, which were $98.7 million and $100.0 million in the third quarter of 2021 and 2020, respectively. Revenues generated from product sales were $96.0 million, compared with $95.4 million in the same quarter of 2020. Revenues from service and others were $2.7 million, compared with $4.6 million in the same quarter of 2020. Included in product sales, revenues from apparel increased by 39.6% to $61.9 million in the third quarter of 2021, compared with $44.4 million in the same quarter of 2020. Revenues from apparel represented 64.5% of total product sales in the third quarter of 2021, and 46.5% in the same quarter of 2020.

Total cost of revenues was $54.8 million in the third quarter of 2021, compared with $56.9 million in the same quarter of 2020. Cost for product sales was $54.0 million in the third quarter of 2021, compared with $53.9 million in the same quarter of 2020. Cost for service and others was $0.8 million in the third quarter of 2021, compared with $3.1 million in the same quarter of 2020.

Gross profit in the third quarter of 2021 was $43.9 million, compared with $43.1 million in the same quarter of 2020. Gross margin was 44.5% in the third quarter of 2021, compared with 43.1% in the same quarter of 2020. The increase in gross margin was a result of the Company's continuous efforts to optimize our product mix.

Total operating expenses in the third quarter of 2021 were $50.5 million, compared with $41.5 million in the same quarter of 2020.

• Fulfillment expenses in the third quarter of 2021 were $7.2 million, compared with $6.7 million in the same quarter of 2020. As a percentage of total revenues, fulfillment expenses were 7.3% in the third quarter of 2021, compared with 6.7% in the same quarter of 2020 and 6.2% in the second quarter of 2021.
• Selling and marketing expenses in the third quarter of 2021 were $34.0 million, compared with $26.9 million in the same quarter of 2020. As a percentage of total revenues, selling and marketing expenses were 34.4% for the third quarter of 2021, compared with 26.9% in the same quarter of 2020 and 35.6% in the second quarter of 2021.
• G&A expenses in the third quarter of 2021 were $9.3 million, compared with $7.9 million in the same quarter of 2020. As a percentage of total revenues, G&A expenses were 9.4% for the third quarter of 2021, compared with 7.9% in the same quarter of 2020 and 7.8% in the second quarter of 2021. Included in G&A expenses, R&D expenses in the third quarter of 2021 were $5.5 million, compared with $3.5 million in the same quarter of 2020 and $5.1 million in the second quarter of 2021.

Loss from operations was $6.6 million in the third quarter of 2021, compared with income from operations of $1.6 million in the same quarter of 2020.

Other income, net in the third quarter of 2021 was $0.4 million, compared with $9.0 million in the same quarter of 2020. Included in other income, net in the third quarter of 2020, $8.9 million was derived from change in fair value on our equity investment. The gain in fair value change on our equity investment, after respective income tax of $3.2 million, was $5.7 million.

Net loss was $6.1 million in the third quarter of 2021, compared with net income of $7.3 million in the same quarter of 2020.

Net loss per American Depository Share ("ADS") was $0.05 in the third quarter of 2021, compared with net income per ADS of $0.07 in the same quarter of 2020. Each ADS represents two ordinary shares.

In the third quarter of 2021, the Company's basic weighted average number of ADSs used in computing the net income per ADS was 112,160,252.

Adjusted EBITDA, which represents income / (loss) from operations before share-based compensation expense, interest income, interest expense, income tax expense and depreciation and amortization expenses, was negative $5.1 million in the third quarter of 2021, compared with $12.7 million in the same quarter of 2020.

As of September 30, 2021, the Company had cash and cash equivalents and restricted cash of $50.2 million, compared with $65.5 million as of December 31, 2020.

First Nine Months of 2021 Financial Results

Total revenues increased by 25.5% year-over-year to $333.0 million from $265.4 million in the same period of 2020. Revenues generated from product sales were $324.7 million, compared with $252.6 million in the same period of 2020. Revenues from service and others were $8.2 million, compared with $12.8 million in the same period of 2020. Included in product sales, revenues from apparel increased by 105.1% to $196.3 million in the first nine months of 2021, compared with $95.7 million in the same period of 2020. Revenues from apparel represented 60.5% of total product sales in the first nine months of 2021, and 37.9% in the same period of 2020.

Total cost of revenues was $179.6 million in the first nine months of 2021, compared with $148.9 million in the same period of 2020. Cost for product sales was $177.0 million in the first nine months of 2021, compared with $139.7 million in the same period of 2020. Cost for service and others was $2.6 million in the first nine months of 2021, compared with $9.2 million in the same period of 2020.

Gross profit in the first nine months of 2021 was $153.3 million, compared with $116.5 million in the same period of 2020. Gross margin was 46.0% in the first nine months of 2021, compared with 43.9% in the same period of 2020. 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 nine months of 2021 were $161.9 million, compared with $110.0 million in the same period of 2020.

• Fulfillment expenses in the first nine months of 2021 were $22.1 million, compared with $19.1 million in the same period of 2020. As a percentage of total revenues, fulfillment expenses were 6.6% in the first nine months of 2021, compared with 7.2% in the same period of 2020.
• Selling and marketing expenses in the first nine months of 2021 were $113.1 million, compared with $68.2 million in the same period of 2020. As a percentage of total revenues, selling and marketing expenses were 34.0% for the first nine months of 2021, compared with 25.7% in the same period of 2020.
• G&A expenses in the first nine months of 2021 were $27.2 million, compared with $22.7 million in the same period of 2020. As a percentage of total revenues, G&A expenses were 8.2% for the first nine months of 2021, compared with 8.6% in the same period of 2020. Included in G&A expenses, R&D expenses in the first nine months of 2021 were $15.5 million, compared with $10.4 million in the same period of 2020.

Loss from operations was $8.6 million in the first nine months of 2021, compared with income from operations of $6.6 million in the same period of 2020.

Other income, net was $17.6 million in the first nine months of 2021, compared with $13.2 million in the same period of 2020. Included in other income, net, change in fair value on our equity investment was $17.1 million in the first nine months of 2021, compared with $12.7 million in the same period of 2020. The gain in fair value change on our equity investment, after respective income tax of $4.3 million, was $12.8 million in the first nine months of 2021, compared with $9.5 million after respective income tax of $3.2 million in the same period of 2020.

Net income was $4.7 million in the first nine months of 2021, compared with $16.5 million in the same period of 2020.

Net income per American Depository Share ("ADS") was $0.04 in the first nine months of 2021, compared with $0.15 in the same period of 2020. Each ADS represents two ordinary shares. The diluted net income per ADS for the first nine months of 2021 was $0.04, compared with $0.15 in the same period of 2020.

In the first nine months of 2021, the Company's basic weighted average number of ADSs used in computing the net income per ADS was 112,110,030, and 113,307,665 in diluted weighted average number.

Adjusted EBITDA, which represents income from operations before share-based compensation expense, interest income, interest expense, income tax expense and depreciation and amortization expenses, was $11.7 million in the first nine months of 2021, compared with $23.3 million in the same period of 2020.

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 income from operations before share-based compensation expense, 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, and facilitate investors' understanding of the past performance and future prospect.

Conference Call

The Company will hold a conference call to discuss the results at 8:00 a.m. Eastern Time on December 2, 2021 (9:00 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/5878276. Once preregistration has been completed, 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 December 9, 2021. The dial-in details are:

Additionally, a live and archived webcast of the conference call will be available on the Company's Investor Relations website at http://ir.lightinthebox.com.

About LightInTheBox Holding Co., Ltd.

LightInTheBox is a cross-border e-commerce platform that delivers products directly to consumers around the world. The Company offers customers a convenient way to shop for a wide selection of products at attractive prices through its www.lightinthebox.com, www.miniinthebox.com, www.ezbuy.sg and other websites and mobile applications, which are available in 25 major languages and cover more than 140 countries.

For more information, please visit www.lightinthebox.com.

Investor Relations Contact

Christensen
Ms. Xiaoyan Su
Tel: +86 (10) 5900 1548
Email:  ir@lightinthebox.com

OR

Christensen
Ms. Linda Bergkamp
Tel: +1-480-614-3004
Email: lbergkamp@ChristensenIR.com

Forward-Looking Statements

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," "potential," "continue," "ongoing," "targets" and similar statements. Among other things, statements that are not historical facts, including statements about LightInTheBox's beliefs and expectations, the business outlook and quotations from management in this announcement, as well as LightInTheBox's strategic and operational plans, are or contain forward-looking statements.

LightInTheBox may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. 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: LightInTheBox's goals and strategies; LightInTheBox's future business development, results of operations and financial condition; the expected growth of the global online retail market; LightInTheBox's ability to attract customers and further enhance customer experience and product offerings; LightInTheBox's ability to strengthen its supply chain efficiency and optimize its logistics network; LightInTheBox's expectations regarding demand for and market acceptance of its products; competition; fluctuations in general economic and business conditions and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in LightInTheBox's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and LightInTheBox does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

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