ECMOHO Announces First Quarter 2020 Unaudited Financial Results Nasdaq:MOHO

SHANGHAI, China, July 03, 2020 (GLOBE NEWSWIRE) — ECMOHO Restricted (Nasdaq: MOHO) (“ECMOHO” or the “Firm”), a number one built-in options supplier within the non-medical well being and wellness market in China, right this moment introduced its unaudited monetary outcomes for the primary quarter ended March 31, 2020.

First Quarter 2020 Monetary Highlights

• Whole web revenues have been US$61.2 million, in contrast with US$63.9 million in the identical quarter final 12 months.
• Working loss was US$5.6 million, in contrast with working revenue of US$0.Eight million in the identical quarter final 12 months.
• Non-GAAP working loss was US$5.Three million, in contrast with Non-GAAP working revenue of US$1.1 million in the identical quarter final 12 months.
• Internet loss was US$4.6 million, in contrast with web revenue of US$0.Three million in the identical quarter final 12 months.
• Non-GAAP web loss was US$4.Three million, in contrast with web revenue of US$0.6 million in the identical quarter final 12 months.
• Primary and diluted web loss per American Depositary Share (“ADS¹”) attributable to ECMOHO Restricted’s odd shareholders have been US$0.13 and US$0.13, respectively, in contrast with US$0.01 and US$0.01, respectively, for a similar interval of 2019.
• Non-GAAP primary and diluted web loss per ADS attributable to ECMOHO Restricted’s odd shareholders have been US$0.12 and US$0.12, respectively, in contrast with web earnings per ADS of US$0.01 and US$0.01, respectively, for a similar interval of 2019.

First Quarter 2020 Operational Highlights

• Variety of manufacturers supplied by the Firm elevated to 76 as of March 31, 2020, from 70 as of December 31, 2019.
• Variety of cumulative paying customers was 8.6 million as of March 31, 2020.
• Repeat buy charge² reached 38% within the three months ended March 31, 2020, from 35% within the three months ended December 31, 2019.

¹ Every ADS represents 4 Class A odd shares of the Firm.

² “Repeat buy charge” refers back to the proportion of paying customers within the interval indicated who had made multiple buy with us in such interval or in prior intervals.

“Up to now, 2020 has been a 12 months of serious challenges and likewise one in every of alternatives.  We consider that the 12 months 2020 marks the start of a brand new period for China’s well being and wellness business,” commented Ms. Zoe Wang, Founder and Chief Govt Officer of ECMOHO.  “The COVID-19 pandemic has gone far past everybody’s expectations and had a big and unprecedented influence on China’s financial system and society, pushing many offline shops towards monetary difficulties or shutdowns.  Because of the Chinese language authorities’s efficient virus containment measures, the COVID-19 pandemic in China seems to have been introduced beneath management and the financial system and society have regularly re-commenced operations from mid-March 2020.  We’ve got observed that the pandemic has brought on customers to spend extra on managing private and household well being and wellness, which affords development alternatives for the well being and wellness business.  In the long term, we consider that the influence of the COVID-19 pandemic is prone to additionally alter the conduct of customers and the operation fashions of enterprises, making digital adoption and transformation an rising necessity.”

“These alternatives are in step with our view on the digitalization in our business.  Over the previous a number of years, we now have been dedicated to creating our expertise infrastructure and pursuing digitalization upgrades, which we consider will present us with development alternatives.  Sooner or later, along with persevering with to complement our globally-sourced product portfolio for Chinese language customers, we plan to reinforce our potential to offer individuals within the non-medical well being and wellness business provide chain with complete digital and expertise options equivalent to Software program-as-a-Service (SaaS), and Buyer Relationship Administration (CRM), that are supported with our years of expertise in advertising, our business perception, wealthy assets in SKUs and logistics, and powerful analytics skills based mostly on our client database.  We consider our experience will assist us assume a number one place in our market, and supply a supply of robust income development sooner or later.”

“Like many companies in China and world wide, we have been additionally impacted by the COVID-19 pandemic within the first quarter of 2020.  We skilled will increase in expenditure on operations, equivalent to air freight expense per unit and we have been unable to renew full operations till the center of March 2020.  Nonetheless, on the again of the State Council’s guideline to proceed to implement the Wholesome China initiative introduced in July 2019, we’re nonetheless assured that there’s development potential in China’s well being and wellness business in the long term.”

First Quarter 2020 Monetary Outcomes

Whole web revenues have been US$61.2 million, a lower of 4.2% from US$63.9 million in the identical quarter in 2019 with will increase in product gross sales offset by declines in different revenues.  Whole web revenues calculated in Renminbi declined by 0.9% year-over-year and declined additional in US greenback phrases on account of the Renminbi’s depreciation year-over-year. The lower was primarily on account of disruptions brought on by the COVID-19 pandemic, as among the Firm’s workers weren’t in a position to return to work as scheduled after the Lunar New 12 months public vacation and the Firm’s home logistics and transport service suppliers, who skilled momentary shutdowns or employee absenteeism, have been unable to ship merchandise for us. 

Amongst model companions, the Firm noticed income development from current companions Gerber, Perrier, Wyeth Pharmaceutical, Harbin Pharmaceutical and new companions Jiangzhong Shiliao and Bayer.  The expansion in these manufacturers was offset by decreases within the gross sales of milk powder merchandise, equivalent to Abbott and Wyeth Vitamin.

Price of revenues was US$50.5 million, a rise of 6.5% from US$47.Four million in the identical quarter in 2019.  The rise in price of income was primarily on account of larger gross sales to on-line retailers which generally generate decrease gross revenue.

Working bills have been US$16.Three million, in contrast with US$15.7 million in the identical quarter in 2019.  Working bills represented 26.6% of complete web income, in contrast with 24.6% of complete web revenues in the identical quarter in 2019.

• Fulfilment bills have been US$3.Eight million, a lower of two.6% from US$3.9 million in the identical quarter in 2019.  Fulfilment bills declined primarily on account of larger gross sales recorded to on-line retailers, which usually have decrease fulfilment bills per unit.  The above talked about decline of fulfilment expense was offset by the rise in air freight expense per unit as a result of nonfunctional logistics system within the first quarter.  Achievement bills represented 6.2% of complete web revenues, up barely from 6.1% in the identical quarter in 2019.
• Gross sales and advertising bills have been US$9.1 million, flat with the identical quarter in 2019.  Inside gross sales and advertising bills, platform charges and labor bills grew and these will increase have been offset by a discount in promotional bills, which was a results of the Firm doing fewer promotional actions throughout the COVID-19 pandemic.  Gross sales and advertising bills represented 14.9% of complete web revenues, up from 14.2% in the identical quarter in 2019.
• Common and administrative bills have been US$3.1 million, a rise of 40.9% from US$2.2 million in the identical quarter in 2019.  The rise was primarily on account of larger skilled service charges, larger labor bills, and insurance coverage expense within the first quarter of 2020 and offset by (1) a discount in worth added tax paid on inter-subsidiary transactions, which resulted from the Firm receiving approval for VAT tax exemption for export of providers within the second quarter of 2019, and (2) reductions in leisure and workplace bills.  Common and administrative bills represented 5.1% of complete web revenues, up from 3.4% in the identical quarter in 2019.
• Analysis and growth bills have been US$0.Three million, representing a 40.0% decline from US$0.5 million in the identical quarter in 2019.  The decline was primarily on account of a decreased headcount within the R&D division within the interval.

Working loss was US$5.6 million, in contrast with working revenue of US$0.Eight million in the identical quarter in 2019.

Non-GAAP working loss was US$5.Three million, in contrast with Non-GAAP working revenue of US$1.1 million in the identical quarter in 2019. 

Internet loss was US$4.6 million, in contrast with web revenue of US$0.Three million throughout the identical quarter in 2019.

Non-GAAP web loss was US$4.Three million, in contrast with Non-GAAP web revenue of US$0.6 million throughout the identical quarter in 2019.

Internet loss attributable to ECMOHO Restricted was US$4.Four million, in contrast with web revenue attributable to ECMOHO Restricted of US$0.Three million throughout the identical quarter in 2019.

Non-GAAP web loss attributable to ECMOHO Restricted was US$4.1 million, in contrast with Non-GAAP web revenue attributable to ECMOHO Restricted of US$0.6 million throughout the identical quarter in 2019.

As of March 31, 2020, the Firm had US$53.Zero million in money, money equivalents and restricted money, a rise from US$51.1 million as of December 31, 2019. 

Stock days within the first quarter of 2020 elevated to 89 days from 62 days within the fourth quarter of 2019.  The rise in stock days have been influenced by three elements:

• On the finish of the fourth quarter 2019, the Firm had simply accomplished its double-eleven and double-twelve purchasing occasions and stock days have been due to this fact comparatively low;
• In the course of the first quarter of the calendar 12 months the Firm usually experiences decrease ranges of gross sales exercise as a result of Lunar New 12 months vacation, throughout which the volumes of on-line purchases and logistical operations drop considerably on account of holidays and enterprise closures;
• The Firm pulled in a few of its orders to its abroad suppliers for the 618 purchasing occasion from April to March, as a precaution towards potential disruptions within the provide chain. 

Enterprise Outlook

As the assorted COVID-19 pandemic containment measures in China have been eased starting in late-March 2020, client demand has proven indicators of restoration.  Particularly, demand for well being complement and meals, mom and youngster care merchandise, and private care merchandise has rebounded since April 2020.  The Firm expects complete web revenues within the second quarter of 2020 to be between US$100 million and US$102 million, representing a development charge of roughly 14.3% to 16.6% from the second quarter in 2019.  The Firm estimates that it incurred a web loss within the second quarter of 2020 on account of residual influence of the COVID-19 pandemic.

The above outlook is predicated on present market situations and displays the Firm’s present and preliminary estimates, that are topic to substantial uncertainty.

Use of Non-GAAP Monetary Measures

The Firm makes use of non-GAAP monetary measures in evaluating its enterprise.  For instance, the Firm makes use of non-GAAP revenue/(loss) from operations, non-GAAP working margin, non-GAAP web revenue/(loss), non-GAAP web margin, non-GAAP web revenue (loss) attributable to odd shareholders of ECMOHO Restricted and non-GAAP web revenue (loss) attributable to odd shareholders of ECMOHO Restricted per ADS, as supplemental measures to assessment and assess its monetary and working efficiency. 

The presentation of those non-GAAP monetary measures is just not supposed to be thought-about in isolation, or as an alternative choice to the monetary info ready and offered in accordance with U.S. GAAP. Non-GAAP revenue/(loss) from operations is revenue/(loss) from operations excluding the influence of share-based compensation bills. Non-GAAP working margin is non-GAAP revenue from operations as a proportion of complete web revenues.  Non-GAAP web revenue/(loss) is web revenue/(loss) excluding the influence of share-based compensation bills.  Non-GAAP web margin is non-GAAP web revenue as a proportion of complete web revenues.  Non-GAAP web revenue (loss) attributable to odd shareholders of ECMOHO Restricted is web revenue (loss) attributable to odd shareholders of ECMOHO Restricted excluding the influence of share-based compensation bills.  Non-GAAP web revenue (loss) attributable to odd shareholders of ECMOHO Restricted per ADS is non-GAAP web revenue (loss) attributable to odd shareholders of ECMOHO Restricted divided by weighted common variety of shares utilized in calculating web revenue (loss) per odd share multiplied by 4.

The Firm presents the non-GAAP monetary measures as a result of they’re utilized by the Firm’s administration to judge the Firm’s monetary and working efficiency and formulate enterprise plans.  Non-GAAP revenue/(loss) from operations and non-GAAP web revenue/(loss) allow the Firm’s administration to evaluate the Firm’s monetary and working outcomes with out contemplating the influence of share-based compensation bills.  The Firm additionally believes that the usage of the non-GAAP measures facilitates traders’ evaluation of the Firm’s monetary and working efficiency.

The non-GAAP monetary measures will not be outlined beneath U.S. GAAP and will not be offered in accordance with U.S. GAAP.  The non-GAAP monetary measures have limitations as analytical instruments.  One of many key limitations of utilizing non-GAAP revenue/(loss) from operations, non-GAAP web revenue/(loss), non-GAAP web revenue (loss) attributable to odd shareholders of ECMOHO Restricted, and non-GAAP web revenue (loss) attributable to odd shareholders of ECMOHO Restricted per ADS is that they don’t mirror all objects of revenue and expense that have an effect on the Firm’s operations.  Share-based compensation bills have been and should proceed to be incurred within the Firm’s enterprise and isn’t mirrored within the presentation of non-GAAP revenue/(loss) from operations and non-GAAP web revenue/(loss).  Additional, the non-GAAP measures might differ from the non-GAAP measures utilized by different firms, together with peer firms, and due to this fact their comparability could also be restricted.  In gentle of the foregoing limitations, the non-GAAP revenue/(loss) from operations, non-GAAP working margin, non-GAAP web revenue/(loss), non-GAAP web margin, non-GAAP web revenue (loss) attributable to odd shareholders of ECMOHO Restricted and non-GAAP web revenue (loss) attributable to odd shareholders of ECMOHO Restricted per ADS for the interval shouldn’t be thought-about in isolation from or as an alternative choice to revenue/(loss) from operations, working margin, web revenue/(loss), web margin, web revenue (loss) attributable to odd shareholders of ECMOHO Restricted and web revenue (loss) attributable to odd shareholders of ECMOHO Restricted per ADS, or different monetary measures ready in accordance with U.S. GAAP.

The Firm compensates for these limitations by reconciling the non-GAAP monetary measures to the closest U.S. GAAP efficiency measures, which ought to be thought-about when evaluating the Firm’s efficiency.  For reconciliations of those non-GAAP monetary measures to probably the most straight comparable GAAP monetary measures, please see the part of the accompanying tables titled “Reconciliations of GAAP and Non-GAAP Outcomes.”

All quarterly outcomes referred to within the textual content, tables and attachments to this press launch are unaudited.

Alternate Price Info

This press launch comprises translations of sure Renminbi quantities into U.S. {dollars} at specified charges solely for the comfort of readers.  The change charge used for translation on March 31, 2020 was US$1.00 = RMB7.0851, representing the index charges stipulated by the Individuals’s Financial institution of China.

The Firm makes no illustration that the Renminbi or U.S. greenback quantities referred could possibly be transformed into U.S. greenback or Renminbi, because the case could also be, at any specific charge or in any respect.

Secure Harbor Statements

This information launch comprises forward-looking statements inside the that means of Part 21E of the Securities Alternate Act of 1934, as amended, and as outlined within the U.S. Non-public Securities Litigation Reform Act of 1995.  These forward-looking statements may be recognized by terminology equivalent to “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “goal,” “going ahead,” “outlook” and related statements.  For instance, the Firm’s statements about its expectations for Firm efficiency in 2020, its technique and business outlook are forward-looking statements and are inherently unsure.  Such statements are based mostly upon administration’s present expectations and present market and working situations, and relate to occasions that contain identified or unknown dangers, uncertainties and different elements, equivalent to the numerous volatility and disruption brought on by the COVID-19 pandemic, the Firm’s anticipated development of the net retail business in China, the Firm’s expectations concerning demand for and market acceptance of its services, the Firm’s expectations concerning its relationships with its model companions and e-commerce channels, and the extent of client financial exercise in China, all of that are troublesome to foretell and lots of of that are past the Firm’s management, which can trigger the Firm’s precise outcomes, efficiency or achievements to vary materially from these within the forward-looking statements.  Additional info concerning these and different dangers, uncertainties or elements is included within the Firm’s filings with the U.S. Securities and Alternate Fee.  The Firm doesn’t undertake any obligation to replace any forward-looking assertion on account of new info, future occasions or in any other case, besides as required beneath relevant regulation.

About ECMOHO Ltd.

ECMOHO is a number one built-in answer supplier within the quickly rising non-medical well being and wellness market in China.  The Firm acts because the bridge between model homeowners and Chinese language customers by advertising and distributing well being dietary supplements and meals, mom and youngster care merchandise, private care merchandise, family healthcare tools and different well being and wellness merchandise.  By means of over eight years of operation, ECMOHO has constructed an ecosystem the place Chinese language customers are supplied with custom-made well being and wellness options that embrace high quality merchandise and reliable content material.

For extra info, please go to http://ir.ecmoho.com/.

For investor and media inquiries, please contact:

ECMOHO Ltd.
Investor Relations
Electronic mail: IR@ecmoho.com

ECMOHO LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In 1000’s of U.S. {dollars})

ECMOHO LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In 1000’s of U.S. {dollars}, aside from share and per ADS information)

 ⁽¹⁾Share-based compensation bills are allotted in working bills objects as follows:

ECMOHO LIMITED
Reconciliations of GAAP and Non-GAAP Outcomes
(In 1000’s of U.S. {dollars}, aside from share and per ADS information)