LightInTheBox Reports First Quarter 2021 Financial Results

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 first quarter ended March 31, 2021.

First Quarter 2021 Financial Highlights

	Three Months Ended
In millions, except percentages	March 31, 2020			March 31, 2021			Year-over-Year % Change
Total revenues	$	51.5		$	112.0			117.5	%
Gross margin		46.4	%		46.6	%
Net income	$	0.7		$	1.4			87.2	%
Adjusted EBITDA	$	1.4		$	2.3			59.4	%

	As of December 31,			As of March 31,
In millions	2020			2021
Cash, cash equivalents and restricted cash	$	65.5		$	60.1

Mr. Jian He, Chief Executive Officer of LightInTheBox, commented, “We were very pleased to start 2021 with strong growth momentum and more than doubling the revenues for the first quarter compared with a year ago. Total revenues were $112.0 million in the first quarter of 2021, compared with $51.5 million in the same quarter of 2020. Adjusted EBITDA and net income in the first quarter of 2021 reached $2.3 million and $1.4 million, respectively, compared with $1.4 million and $0.7 million in the same quarter of 2020. The growth in revenue and profitability is our greatest motivation to continue to implement our established growth strategies leveraging technological innovations, and to improve our customers’ all-rounded shopping experience.”

First Quarter 2021 Financial Results

Total revenues increased by 117.5% year-over-year to $112.0 million from $51.5 million in the same quarter of 2020. Revenues generated from product sales were $109.4 million, compared with $49.9 million in the same quarter of 2020. Revenues from service and others were $2.6 million, compared with $1.6 million in the same quarter of 2020. Included in product sales, revenues from apparel increased by 166% to $57.6 million in the first quarter of 2021, compared with $21.7 million in the first quarter of 2020.

Total cost of revenues was $59.8 million in the first quarter of 2021, compared with $27.6 million in the same quarter of 2020. Cost for product sales was $59.0 million in the first quarter of 2021, compared with $26.9 million in the same quarter of 2020. Cost for service and others was $0.8 million in the first quarter of 2021, compared with $0.7 million in the same quarter of 2020.

Gross profit in the first quarter of 2021 was $52.3 million, compared with $23.9 million in the same quarter of 2020. Gross margin was 46.6% in the first quarter of 2021, compared with 46.4% in the same quarter of 2020. The increase in gross margin was a result of the Company’s continuous efforts to optimize the supply chain and product mix.

Total operating expenses in the first quarter of 2021 were $50.9 million, compared with $27.1 million in the same quarter of 2020.

Fulfillment expenses in the first quarter of 2021 were $7.2 million, compared with $5.0 million in the same quarter of 2020. As a percentage of total revenues, fulfillment expenses were 6.5% in the first quarter of 2021, compared with 9.8% in the same quarter of 2020 and 6.7% in the fourth quarter of 2020.
Selling and marketing expenses in the first quarter of 2021 were $35.6 million, compared with $14.8 million in the same quarter of 2020. As a percentage of total revenues, selling and marketing expenses were 31.8% for the first quarter of 2021, compared with 28.7% in the same quarter of 2020 and 33.1% in the fourth quarter of 2020.
G&A expenses in the first quarter of 2021 were $8.4 million, compared with $7.3 million in the same quarter of 2020. As a percentage of total revenues, G&A expenses were 7.5% for the first quarter of 2021, compared with 14.1% in the same quarter of 2020 and 7.9% in the fourth quarter of 2020. Included in G&A expenses, R&D expenses in the first quarter of 2021 were $4.9 million, compared with $3.5 million in the same quarter of 2020 and $4.8 million in the fourth quarter of 2020.

Income from operations was $1.4 million in the first quarter of 2021, compared with loss from operations of $3.2 million in the same quarter of 2020.

Net income was $1.4 million in the first quarter of 2021, compared with $0.7 million in the same quarter of 2020.

Net income per American Depository Share (“ADS”) was $0.01 in the first quarter of 2021, compared with $0.01 in the same quarter of 2020. Each ADS represents two ordinary shares. Diluted net income per ADS was $0.01 in the first quarter of 2021, compared with $0.01 in the same quarter of 2020.

In the first quarter of 2021, the Company’s basic weighted average number of ADSs used in computing the net income per ADS was 112,069,523 and the diluted weighted average number of ADSs was 113,431,059.

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 $2.3 million in the first quarter of 2021, compared with $1.4 million in the same quarter of 2020.

As of March 31, 2021, the Company had cash and cash equivalents and restricted cash of $60.1 million, compared with $65.5 million as of December 31, 2020.

Business Outlook

For the second quarter of 2021, based on current information available to the Company and business seasonality, the Company expects net revenues to be between $130 million and $145 million, which would represent an increase of between 14% to 27% compared with net revenues in the second quarter of 2020. Excluding the net revenues from sales of personal protective equipment, which are no longer sold in 2021, the year-over-year growth in net revenues for the second quarter of 2021 would be 48% to 65%.

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, enhancing their understanding of the past performance and future prospects.

LightInTheBox Holding Co., Ltd.
Unaudited Condensed Consolidated Balance Sheets
(U.S. dollars in thousands, or otherwise noted)

	As of December 31,		As of March 31,
	2020		2021
ASSETS
Current Assets
Cash and cash equivalents		61,477		56,881
Restricted cash		4,052		3,232
Accounts receivable, net of allowance for doubtful accounts		1,302		1,304
Amounts due from related parties		2,882		2,870
Inventories		9,919		10,294
Prepaid expenses and other current assets		5,176		5,212
Total current assets		84,808		79,793
Property and equipment, net		3,812		3,634
Intangible assets, net		9,416		9,425
Goodwill		29,745		29,627
Operating lease right-of-use assets		12,243		10,404
Long-term rental deposits		707		668
Long-term investments		17,297		17,226
TOTAL ASSETS		158,028		150,777

LIABILITIES AND EQUITY
Current Liabilities
Accounts payable		16,953		16,912
Amounts due to related parties		167		167
Advance from customers		33,279		27,776
Operating lease liabilities		4,269		3,731
Accrued expenses and other current liabilities		42,183		40,702
Total current liabilities		96,851		89,288

Operating lease liabilities		8,118		7,140
Long-term payable		124		109
Deferred tax liability		3,558		3,543
TOTAL LIABILITIES		108,651		100,080

EQUITY
Ordinary shares		17		17
Additional paid-in capital		282,260		282,400
Treasury shares, at cost		(30,207)		(29,992)
Accumulated other comprehensive income		1,795		1,457
Accumulated deficit		(204,571)		(203,352)
Non-controlling interests		83		167
TOTAL EQUITY		49,377		50,697
TOTAL LIABILITIES AND EQUITY		158,028		150,777

LightInTheBox Holding Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations
(U.S. dollars in thousands, except per share data, or otherwise noted)

	Three Months Ended
	March 31, 2020		March 31, 2021
Revenues
Product sales		49,936		109,422
Services and others		1,582		2,625
Total revenues		51,518		112,047
Cost of revenues
Product sales		(26,905)		(59,032)
Services and others		(712)		(757)
Total Cost of revenues		(27,617)		(59,789)
Gross profit		23,901		52,258
Operating expenses
Fulfillment		(5,049)		(7,246)
Selling and marketing		(14,780)		(35,591)
General and administrative		(7,268)		(8,416)
Other operating income		13		363
Total operating expenses		(27,084)		(50,890)
(Loss) / Income from operations		(3,183)		1,368
Interest income		47		5
Interest expense		(30)		(4)
Other income, net*		3,913		31
Total other income		3,930		32
Income before income taxes		747		1,400
Income tax expense		(3)		(7)
Net income		744		1,393
Less: Net income attributable to non-controlling interests		123		85
Net income attributable to LightInTheBox Holding Co., Ltd.		621		1,308

Weighted average numbers of shares used in calculating income per ordinary share
—Basic		204,481,801		224,139,045
—Diluted		224,245,096		226,862,118

Net income per ordinary share
—Basic		0.00		0.01
—Diluted		0.00		0.01

Net income per ADS (2 ordinary shares equal to 1 ADS)
—Basic		0.01		0.01
—Diluted		0.01		0.01

*Other income, net mainly includes change in fair value on our equity investment.

LightInTheBox Holding Co., Ltd.
Unaudited Reconciliations of GAAP and Non-GAAP Results
(U.S. dollars in thousands, or otherwise noted)

	Three Months Ended
	March 31, 2020		March 31, 2021
Net income		744		1,393

Less: Interest income		47		5
Interest expense		(30)		(4)
Income tax expense		(3)		(7)
Depreciation and amortization		(551)		(740)
EBITDA		1,281		2,139

Less: Share-based compensation		(149)		(140)
Adjusted EBITDA*		1,430		2,279

* Adjusted EBITDA represents income from operations before share-based compensation expense, interest income, interest expense, income tax expense and depreciation and amortization expenses.

Source: LightInTheBox Holding Co., Ltd.