Le Lézard
Classified in: Health, Business, Covid-19 virus
Subject: EARNINGS

ECMOHO Limited Announces Third Quarter 2021 Unaudited Financial Results


SHANGHAI, China, Nov. 30, 2021 (GLOBE NEWSWIRE) -- ECMOHO Limited (Nasdaq: MOHO) ("ECMOHO", "we" or the "Company"), an integrated solutions provider in the health and wellness market in China, today announced its unaudited financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Operational Highlights

1 "Cumulative paying consumers" refers to the customers who have placed one or more orders purchasing products through our self-operated flagship stores on third-party e-commerce platforms, and the Company's channels on Douyin.

2 "Repeat purchase rate" refers to the percentage of paying consumers in the period indicated who had made more than one purchase with us in such period or in prior periods.

3 "GMV" refers to the gross merchandise volume that includes value added tax and value of the goods that are returned.                

Third Quarter 2021 Financial Highlights

Ms. Zoe Wang, Chairwoman and Chief Executive Officer of ECMOHO Limited, commented, "China's retail sales growth is far slower than expected in the third quarter of 2021 and the recovery in consumer spending is lagging behind the recovery in income, indicating a decline in consumer confidence. However, consumer's spending on health products has continued to rise unabated, leading to opportunities for integrated solutions providers in China's health and wellness market. Leveraging the growing market opportunities, we recently expanded eye healthcare offerings with the launch of eye healthcare products and solutions on Pinduoduo's platform. We also engaged a premium supplement and nutrition brand with top-notch ingredients, which we believe will not only meet the high expectations of consumers, but will also become an important growth driver going forward. These efforts reaffirm our mission to improve the health and well-being of consumers in China."

Mr. Xin Li, Chief Financial Officer, commented, "During the third quarter, against the backdrop of our brands portfolio optimization and passed e-commerce peak season, we took deliberate measures to manage our budget, which, although led to a revenue decrease, resulted in better gross margins of product sales. These optimization dynamics will gradually normalize as we plan well for transition of this year's optimizing strategy to next year's sustainable growth."

Third Quarter 2021 Financial Results

Total net revenues were US$28.3 million in the third quarter ended September 30, 2021, as compared to US$71.5 million in the same quarter of last year.

Cost of revenue was US$21.8 million, representing a decrease of 62.8% from US$58.8 million in the same quarter of last year. The decrease was mainly attributed to the decline in product sales.

Operating expenses were US$10.0 million, representing a decrease of 40.6% from US$16.9 million in the same quarter of last year, as we continued to control costs and optimize our operations. The decrease was mainly attributable to the decrease of fulfillment expenses and sales and marketing expenses. Detailed factors of the changes are as follows:

Operating loss was US$3.6 million, as compared to an operating loss of US$4.2 million in the same quarter of last year.

Non-GAAP operating loss was US$2.5 million, as compared to Non-GAAP operating loss of US$4.0 million in the same quarter of last year.

Net loss was US$3.8 million, as compared to a net loss of US$4.1 million in the same quarter of last year, as results of the factors described above.

Non-GAAP net loss was US$2.7 million, as compared to Non-GAAP net loss of US$3.9 million in the same quarter of last year.

Conference Call

The Company will host a conference call to discuss the earnings at 8:00 p.m. Eastern Time on Tuesday, November 30, 2021 (9:00 a.m. Beijing time on Wednesday, December 1, 2021).

In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive important details for this conference including the call date and time, a unique registrant ID, direct event passcode and a set of participant dial-in numbers to join the conference call.

Conference ID?2929319
Direct Event online registration: http://apac.directeventreg.com/registration/event/2929319

The replay will be accessible through December 7, 2021 by dialing the following numbers:

INTERNATIONAL:+61 2 8199 0299 
TOLL FREE:  
China 800 (Mandarin Language)8008700206 
China 4004006322162 
China 400 (Mandarin Language)4006022065 
China 8008008700205 
Hong Kong800963117 
Taiwan00801232482 
United Kingdom08082340072 
United States18554525696 

A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://ir.ecmoho.com/.

Use of Non-GAAP Financial Measures

The Company uses non-GAAP financial measures in evaluating its business. For example, the Company uses non-GAAP operating income (loss) and non-GAAP net income (loss), as supplemental measures to review and assess its financial and operating performance.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. Non-GAAP operating income (loss) is operating income (loss) excluding the impact of share-based compensation expenses and severance expenses. Non-GAAP net income (loss) is net income (loss) excluding the impact of share-based compensation expenses and severance expenses.

The Company presents the non-GAAP financial measures because they are used by the Company's management to evaluate the Company's financial and operating performance and formulate business plans. Non-GAAP operating income (loss) and non-GAAP net income (loss) enable the Company's management to assess the Company's financial and operating results without considering the impact of share-based compensation expenses and severance expenses. The Company also believes that the use of the non-GAAP measures facilitates investors' assessment of the Company's financial and operating performance.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP operating income (loss) and non-GAAP net income (loss) is that they do not reflect all items of income and expense that affect the Company's operations. Share-based compensation expenses and severance expenses have been and may continue to be incurred in the Company's business and are not reflected in the presentation of non-GAAP operating income (loss) and non-GAAP net income (loss). Further, the non-GAAP measures may differ from the non-GAAP measures used by other companies, including peer companies, and therefore their comparability may be limited. In light of the foregoing limitations, the non-GAAP operating income (loss) and non-GAAP net income (loss) should not be considered in isolation from or as an alternative to operating income (loss) and net income (loss), or other financial measures prepared in accordance with U.S. GAAP.

The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled "Reconciliations of GAAP and Non-GAAP Results." All quarterly results referred to in the text, tables and attachments to this press release are unaudited.

Exchange Rate Information

This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. The exchange rate used for translation on September 30, 2021, December 31, 2020 and September 30, 2020 was US$1.00 to RMB6.4854, US$1.00 to RMB6.5249 and US$1.00 to RMB6.8101, respectively, representing the index rates stipulated by the People's Bank of China on such date.

The Company makes no representation that the Renminbi or U.S. dollar amounts referred could be converted into U.S. dollar or Renminbi, as the case may be, at any particular rate or at all.

Safe Harbor Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in 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," "target," "going forward," "outlook" and similar statements. For example, the Company's statements about its expectations for Company performance in 2021, its strategy and industry outlook are forward-looking statements and are inherently uncertain. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, such as the significant volatility and disruption caused by the COVID-19 pandemic, the Company's expected growth of the online retail industry in China, the Company's expectations regarding demand for and market acceptance of its products and services, the Company's expectations regarding its relationships with its brand partners and e-commerce channels, and the level of consumer economic activity in China, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

About ECMOHO Ltd.

ECMOHO is an integrated solutions provider in the health and wellness market in China. The company curates and sells the best global brands and quality products to Chinese health-conscious consumers. Our technology, network and expertise in marketing and distribution empower us to connect families with advanced health supplements, nutrition and food items, personal care products, household healthcare equipment and other wellness products. Through over ten years of operation, ECMOHO has established an ecosystem of trusted products and relationships to provide customized solutions which promote health regeneration, impart therapeutic benefits, and increase longevity to our devoted consumers to sustain health.

For more information, please visit http://ir.ecmoho.com/.

For investor and media inquiries, please contact:

ECMOHO Ltd.
Investor Relations
Ms.Yvonne Xu

Email: IR@ecmoho.com


ECMOHO LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)

 As of December 31,
2020
  As of September 30,
2021
 US$ US$
ASSETS   
Current assets:   
Cash and cash equivalents45,284  39,154 
Accounts receivable, net42,006  33,853 
Inventories33,263  31,886 
Prepayments and other current assets9,200  6,318 
Loan receivable646  - 
Total current assets130,399  111,211 
Property and equipment, net967  754 
Intangible assets, net565  482 
Operating lease right-of-use assets2,434  3,181 
Long-term investments5,904  7,358 
Deferred tax assets, net829  835 
Other non-current assets1,530  1,182 
Total assets142,628  125,003 
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Short-term borrowings16,943  11,606 
Accounts payable24,191  18,505 
Amounts due to related parties9,401  7,186 
Advances from customers731  972 
Operating lease liabilities, current411  849 
Salary and welfare payable821  536 
Tax payable3,574  2,806 
Accrued liabilities and other current liabilities5,039  4,129 
Total current liabilities61,111  46,589 
Deferred taxes liabilities24  10 
Operating lease liabilities, non-current1,939  2,405 
Total liabilities63,074  49,004 
    
Shareholders' equity:   
Class A Ordinary Shares, US$ 0.00001 par value1  1 
Class B Ordinary Shares, US$ 0.00001 par value1  1 
Additional paid-in capital108,370  118,671 
Accumulated other comprehensive income4,037  3,590 
Accumulated deficit(32,855) (46,235)
Total ECMOHO Limited shareholders' equity79,554  76,028 
Non-controlling interests-  (29)
Total shareholders' equity79,554  75,999 
Total liabilities and shareholders' equity142,628  125,003 


ECMOHO LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except for share and per ADS data)

 For Three Months Ended For Nine Months Ended
 September 30, September 30, September 30, September 30,
 2020 2021 2020 2021
 US$ US$ US$ US$
Net revenues71,450  28,255  233,087  98,139 
Cost of revenue(58,791) (21,848) (192,395) (78,232)
Gross profit12,659  6,407  40,692  19,907 
Operating expenses(1):       
Fulfillment expenses(3,392) (2,070) (11,776) (6,697)
Sales and marketing expenses(10,195) (5,176) (31,560) (18,624)
General and administrative expenses(3,039) (2,488) (9,487) (7,114)
Research and development expenses(261) (294) (895) (896)
Other operating income-  -  16  - 
Total operating expenses(16,887) (10,028) (53,702) (33,331)
Operating loss(4,228) (3,621) (13,010) (13,424)
Finance expense, net(519) (422) (2,207) (1,513)
Foreign exchange income, net416  93  304  1,315 
Other income, net188  162  1,717  263 
Loss before income tax (expenses)/benefits(4,143) (3,788) (13,196) (13,359)
Income tax (expenses)/benefits17  5  26  (50)
Net loss(4,126) (3,783) (13,170) (13,409)
Less: Net loss attributable to the non-controlling interest shareholders and redeemable non-controlling interest shareholders(5) (31) (271) (29)
Net loss attributable to ECMOHO Limited(4,121) (3,752) (12,899) (13,380)
        
Net loss per share attributable to ECMOHO Limited's ordinary shareholders       
?basic(0.03) (0.02) (0.09) (0.09)
?diluted(0.03) (0.02) (0.09) (0.09)
        
Net loss per ADS attributable to ECMOHO Limited's ordinary shareholders       
?basic(0.12) (0.09) (0.37) (0.36)
?diluted(0.12) (0.09) (0.37

)

 (0.36

)

        
Weighted average number of Ordinary Shares        
?basic139,786,746  168,783,778  139,651,735  150,500,392 
?diluted139,786,746  168,783,778  139,651,735  150,500,392 
        


(1)Share-based compensation expenses and severance expenses are allocated in operating expenses items as follows:

 For Three Months EndedFor Nine Months Ended
 September 30, September 30,September 30, September 30,
 2020 20212020 2021
 US$ US$US$ US$
       
Fulfillment expenses5 1611 71
Sales and marketing expenses32 249227 1,361
General and administrative expenses220 842661 1,136
Research and development expenses4 1810 90
Total Share-based compensation expenses and Severance expenses

261
 

1,125


909
 

2,658


ECMOHO LIMITED
Reconciliations of GAAP and Non-GAAP Results
(In thousands of U.S. dollars)

 For Three Months Ended For Nine Months Ended
 September 30, September 30, September 30, September 30,
  2020  2021  2020 2021
  US$ US$ US$ US$
        
Operating loss(4,228) (3,621) (13,010) (13,424)
Add: Share-based compensation expenses
Add: Severance expenses
261

  732
393
  909  2,265
393
 
Non-GAAP Operating loss(3,967) (2,496) (12,101) (10,766)
        
Net loss(4,126) (3,783) (13,170) (13,409)
Add: Share-based compensation expenses
Add: Severance expenses
261  732
393
  909  2,265
393
 
Non-GAAP Net loss(3,865) (2,658) (12,261) (10,751)


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