Dangdang Announces Third Quarter2012 Results

                 Dangdang Announces Third Quarter2012 Results

Net Revenues in Q3 2012 Increased by 42% Year-Over-Year

Media Revenue in Q3 2012 Increased by 33% Year-Over-Year

General Merchandise Revenue in Q3 2012 Increased by 56% Year-Over-Year

PR Newswire

BEIJING, Nov. 15, 2012

BEIJING, Nov. 15, 2012 /PRNewswire/ -- E-Commerce China Dangdang Inc.
("Dangdang" or the "Company") (NYSE: DANG), a leading business-to-consumer
e-commerce company in China, today announced its unaudited financial results
for the third quarter ended September 30, 2012.

Third Quarter Highlights

  oTotal net revenues in the third quarter of 2012 were RMB1,287.6 million
    ($204.9 million), a 41.7% increase from the corresponding period in 2011.
  oMedia revenue for the third quarter of 2012 was RMB849.9 million ($135.2
    million), an increase of 32.9% from the corresponding period in 2011.
  oGeneral merchandise revenue for the third quarter of 2012 was RMB397.4
    million ($63.2 million), a 55.9% increase from the corresponding period in
    2011.
  oAs marketplace has expanded to represent a significant part of Dangdang's
    business in 2012, starting from this quarter, the Company will also report
    Gross Merchandise Value (GMV) of marketplace. For comparative purposes,
    the historical GMV data for the first and second quarters of 2012 have
    also been presented below:

(RMB in millions)     2012 Q1 2012 Q2 2012 Q3
GMV of Marketplace    199.6   283.7   341.5
 YoY growth rate 129%    200%    159%

  oStarting from this quarter, the Company will report operational data on
    customer and order numbers from Dangdang's whole platform instead of from
    self-procurement business only, which it has disclosed previously.
    Dangdang's whole platform includes both self-procurement and marketplace.
    For comparative purposes, the historical operational data for the first
    and second quarters of 2012 have also been presented below:

(in millions)                              2012 Q1 2012 Q2 2012 Q3
                          active customers 6.1     5.7
Self-procurement          new customers    1.9     1.7
                          orders           11.8    11.1
                          active customers 6.1     5.9     7.0
Dangdang's Whole Platform new customers    1.9     1.8     2.4
                          orders           12.3    12.0    13.9

  oDangdang had approximately 7.0 million active customers for the whole
    platform in the third quarter of 2012, representing a 26.4% increase from
    the corresponding period in 2011.
  oTotal orders for the whole platform  were approximately 13.9 million in
    the third quarter of 2012, a 29.1% increase from the corresponding period
    in 2011.

"We are pleased to report the solid result of the third quarter. Our sales
grew at 41.7% year-over-year and reached a gross margin at 15.2%. Dangdang
continued to strengthen book and media's leading position with growth of 33%
year-over-year in the third quarter. Other revenue, composed mainly of revenue
from third-party merchants, increased 183.4% year-over-year and 20.5%
quarter-over-quarter, reflecting the strong growth momentum of our marketplace
program," said Ms. Peggy Yu Yu, Dangdang's Executive Chairwoman. "We have
planned promotional activities intelligently in terms of both timing and
theme. In the meanwhile, we invested in the fulfillment and technology to
improve the overall shopping experience," Ms. Yu added.

"We leveraged the expenses in fulfillment in the third quarter, and
implemented next-day-delivery services in 158 cities, evening-delivery
services in 11 cities and same-day-delivery in 21 cities as part of our
ongoing efforts to improve customer services," commented Mr. Guoqing Li, Chief
Executive Officer. "We rented two additional warehouses in Tianjin, which we
started to operate in August, bringing our total capacity to 370,000 square
meters now from 350,000 square meters at the end of second quarter of 2012."

Third Quarter 2012 Results

Dangdang's total net revenues in the third quarter of 2012 were RMB1,287.6
million ($204.9 million), a 41.7% increase from the corresponding period in
2011.

Media product revenue for the third quarter of 2012 was RMB849.9 million
($135.2 million), representing a 32.9% increase from the corresponding period
in 2011. General merchandise revenue for the third quarter of 2012 was
RMB397.4 million ($63.2 million), representing a 55.9% increase from the
corresponding period in 2011. Other revenue including revenue from third-party
merchants for the third quarter of 2012 was RMB40.3 million ($6.4 million),
representing a 183.4% increase from the corresponding period in 2011.

Dangdang had approximately 7.0 million active customers for the whole platform
in the third quarter of 2012, representing a 26.4% increase from the
corresponding period in 2011. Total orders for the whole platform for the
third quarter of 2012 were approximately 13.9 million, a 29.1% increase from
the corresponding period in 2011.

Cost of revenues was RMB1,091.4 million ($173.7 million), representing 84.8%
of total revenues, as compared to 86.2% in the corresponding period in 2011.
The decreased cost of revenues as a percentage of total revenues was primarily
due to the execution on the strategic category mapping to move certain
categories to the marketplace and economy of scale in some of Dangdang's
self-procurement categories. General merchandise revenue for the third quarter
of 2012 was RMB397.4 million ($63.2 million), representing 30.9% of total net
revenues, as compared to 28.1% in the corresponding period in 2011. Gross
margin in the third quarter of 2012 was 15.2%, as compared to 13.8% in the
corresponding period in 2011. The year-over-year increase was primarily due to
the scaling of the marketplace and the economy of scale in some of Dangdang's
self-procurement categories.

Fulfillment expenses,  which include warehousing and shipping expenses, were
RMB185.7 million ($29.6 million), representing 14.4% of total revenues,
compared to 14.2% in the corresponding period in 2011. The increase was
primarily attributable to the investments in improving fulfillment and
customer services.

Marketing expenses were RMB45.8 million ($7.3 million), representing 3.6% of
total revenues, compared to 4.4% in the corresponding period in 2011. The
decrease was primarily due to more efficient marketing campaigns in the
quarter.

Technology and content expenses were RMB40.8 million ($6.5 million),
representing 3.2% of total revenues, compared to 2.3% in thecorresponding
period in 2011. The increase was primarily due to the increased in headcount
and level of investment to improve Dangdang customers' shopping experience and
supply chain management.

General and administrative expenses were RMB33.1 million ($5.3 million),
representing 2.6% of total revenues, compared with 2.3% from the corresponding
period in 2011. The increase was primarily due to the increased headcount and
charges of POD service.

Share-based compensation expenses, which were allocated to related expense
line items, were RMB2.8 million ($0.4 million) in the third quarter of 2012,
an increase of 21.0% from the corresponding period in 2011.

Dangdang recorded an operating loss of RMB104.6 million ($16.6 million) in the
third quarter of 2012, as compared with an operating loss of RMB81.9 million
in the corresponding period in 2011, primarily due to the increase in cost of
revenues and the increase in fulfillment and technology and content expenses.

Operating loss excluding share-based compensation expenses (non-GAAP) was
RMB101.8 million ($16.2 million), as compared with an operating loss excluding
share-based compensation expenses (non-GAAP) of RMB79.6 million in the
corresponding period in 2011.

Operating margin was negative 8.1%, as compared with an operating margin
negative 9.0% in the corresponding period in 2011.

Net loss was RMB100.1 million ($15.9 million), as compared with a net loss of
RMB73.4 million in the corresponding period in 2011, primarily due to the
increase in cost of revenues and the increase in fulfillment and technology
expenses.

Net margin was negative 7.8%, as compared with a net margin negative 8.1% in
the corresponding period in 2011.

Net loss excluding share-based compensation expenses (non-GAAP) was RMB97.3
million ($15.5 million), as compared with a net loss excluding share-based
compensation expenses (non-GAAP) of RMB71.1 million in the corresponding
period in 2011.

As of September 30, 2012, Dangdang had cash and cash equivalents, time
deposits with original maturities exceeding three months and held-to-maturity
investments of RMB1,430.2 million ($227.6 million), as compared to RMB1,391.8
million as of December 31, 2011.

Capital expenditures for the third quarter of 2012 were RMB17.6 million ($2.8
million).

Adjusted EBITDA loss (non-GAAP) in the third quarter of 2012 was RMB90.6
million ($14.4 million), as compared with an adjusted EBITDA loss of RMB72.4
million in the corresponding period in 2011,primarily due to the increase in
cost of revenues and the increase in fulfillment and technology expenses.

Outlook for Fourth Quarter 2012

Dangdang expects its total net revenues in the fourth quarter of 2012 to be
around RMB1,610 million (or USD265 million). This forecast reflects Dangdang's
current and preliminary view, which is subject to change.

Conference Call Information

Dangdang's management will host an earnings conference call at 8:00 AM on
November 15, 2012 U.S. Eastern Time (or 9:00 PM on November 15, 2012
Beijing/Hong Kong time).

Dial-in details for the earnings conference call are as follows:

US:            +1-718-354-1231
Hong Kong:     +852-2475-0994
International: +65-6723-9381

Please dial-in 10 minutes before the call is scheduled to begin and provide
the passcode to join the call. The passcode is "Dangdang earnings call."

A replay of the conference call may be accessed by phone at the following
number until November 21, 2012:

International: +61-2-8199-0299
Conference ID: 68984988

Additionally, a live and archived webcast of this conference call will be
available at http://ir.dangdang.com/ until June 30, 2013.

About Dangdang

E-Commerce China Dangdang Inc. ("Dangdang" or the "Company") (NYSE: DANG) is a
leading business-to-consumer e-commerce company in China. On its website
dangdang.com, the Company offers more than 880,000 books and other media
products as well as selected general merchandise products including beauty and
personal care products, home and lifestyle products, baby, children and
maternity products, apparel, digital and electronics products. It also
operates the dangdang.com marketplace program, which allows third-party
merchants to sell their products alongside products sourced by the Company.
Dangdang's nationwide fulfillment and delivery capabilities, high-quality
customer service support and scalable technology infrastructure enable it to
provide a compelling online shopping experience to customers.

Safe Harbor Statement

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," "confident" and similar
statements. Among other things, the outlook for the fourth quarter 2012 and
quotations from management in this announcement, as well as Dangdang's
strategic and operational plans, contain forward-looking statements. Dangdang
may also make written or oral forward-looking statements in its periodic
reports to the U.S. Securities and Exchange Commission, in its annual report
to shareholders, in press releases and other written materials and in oral
statements made by its officers, directors or employees to third parties.
Statements that are not historical facts, including statements about
Dangdang's beliefs and expectations, are 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: Dangdang's growth strategies; its future business development,
results of operations and financial condition; its ability to attract and
retain new customers and to increase revenues generated from repeat customers;
its expectations regarding demand for and market acceptance of our products
and services; trends and competition in China's business-to-consumer
e-commerce market; changes in its revenues and certain cost or expense items;
the expected growth of the Chinese business-to-consumer e-commerce market;
Chinese governmental policies relating to Dangdang's industry and general
economic conditions in China. Further information regarding these and other
risks is included in Dangdang's annual report on Form 20-F and other documents
filed with the Securities and Exchange Commission. Dangdang does not undertake
any obligation to update any forward-looking statement, except as required
under applicable law. All information provided in this press release and in
the attachments is as of the date of this press release, and Dangdang
undertakes no duty to update such information, except as required under
applicable law.

About Non-GAAP Financial Measures

Tosupplement Dangdang's consolidated financial results presented in
accordance with United States Generally Accepted Accounting Principles
("GAAP"), we use the following measures as the non-GAAP financial measures
defined by the SEC: non-GAAP operating loss, non-GAAP operating margin,
non-GAAP net loss and adjusted EBITDA loss (collectively referred to as the
"Non-GAAP Financial Measures" thereafter). We define non-GAAP operating loss,
non-GAAP operating margin and non-GAAP net loss asoperating loss, operating
margin and net loss excludingthe impact of share-based compensation expenses
respectively; we define adjusted EBITDA loss as loss before interest, taxes,
depreciation, amortization, other non-operating income, and share-based
compensation expenses. We review the Non-GAAP Financial Measures together with
net loss or income to obtain a better understandingof our operating
performance. We believe that these Non-GAAP Financial Measures provide
meaningful supplemental information regarding the Company's performance and
liquidity. However, a limitation of using the Non-GAAP Financial Measures as
an analytical tool is that they do not include all items that impact our net
income/loss for the period. In addition, because they are not calculated in
the same manner by all companies, they may not be comparable to other similar
titled measures used by other companies. In light of the foregoing
limitations, you should not consider the Non-GAAP Financial Measures in
isolation from or as an alternative to net income/loss prepared in accordance
with U.S. GAAP.

For information on the reconciliation between the Non-GAAP Financial Measures
andthe GAAP financial measures presented in accordance with U.S. GAAP for the
periods presented, please see the table captioned "Reconciliations of non-GAAP
results of operations measures to the nearest comparable GAAP financial
measures" at the end of this release.

For investor and media inquiries, please contact:

Maria Xin
Investor Relations Director
E-commerce China Dangdang Inc.
+86-10-5799-2306
xinyi@dangdang.com

Caroline Straathof
IR Inside
+31-6-5462-4301
info@irinside.com



E-Commerce China Dangdang Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except share related data)
                                         Three Months Ended
                                         September30,  September30, September30,
                                         2011           2012          2012
                                         RMB            RMB           US$
                                         (Unaudited)    (Unaudited)   (Unaudited)
Net revenues
 Product revenue                        894,647        1,247,281     198,460
 Media                                639,680        849,856       135,224
 General merchandise                  254,967        397,425       63,236
 Other revenue                          14,214         40,282        6,409
Total net revenues                       908,861        1,287,563     204,869
Cost of revenues                         (783,861)      (1,091,413)   (173,659)
Gross profit                             125,000        196,150       31,210
Operating expenses:
 Fulfillment                            (128,693)      (185,747)     (29,555)
 Marketing                              (40,375)       (45,839)      (7,294)
 Technology and content                 (21,171)       (40,818)      (6,495)
 General and administrative             (21,005)       (33,143)      (5,274)
 Government grants                      4,330          4,794         763
Total operating expenses, net            (206,914)      (300,753)     (47,855)
Loss from operations                     (81,914)       (104,603)     (16,645)
Interest income                          8,323          8,122         1,292
Other income (expenses), net             24,301         (3,578)       (569)
Loss before income taxes                 (49,290)       (100,059)     (15,922)
Income tax expenses                      (24,084)       -             -
Net loss                                 (73,374)       (100,059)     (15,922)
Net loss attributable to common          (73,374)       (100,059)     (15,922)
shareholders
Net loss per common share
 (0.19)         (0.25)        (0.04)
- Basic
 (0.19)         (0.25)        (0.04)
- Diluted
Net loss per ADS
                           (0.95)         (1.25)        (0.20)
- Basic
 (0.95)         (1.25)        (0.20)
- Diluted
Net loss allocated to common
shareholders used in net loss per
share/ADS calculation
 (73,374)       (100,059)     (15,922)
- Basic
 (73,374)       (100,059)     (15,922)
- Diluted
Shares used in net loss per common share
computation:
Class A common shares:
 251,686,758    268,583,299   268,583,299
- Basic
 396,040,652    400,499,959   400,499,959
- Diluted
Class B common shares:
 144,353,894    131,916,660   131,916,660
- Basic
 144,353,894    131,916,660   131,916,660
- Diluted
ADSs used in net loss per ADS
calculation
 79,208,130     80,099,992    80,099,992
- Basic
 79,208,130     80,099,992    80,099,992
- Diluted
Other comprehensive (loss) income
 Foreign currency translation           (22,060)       4,485         714
adjustment, net of taxes
Comprehensive loss attributable to       (95,434)       (95,574)      (15,208)
common shareholders







E-Commerce China Dangdang Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share related data)
                                      As of December  As of September 30, 2012
                                      31, 2011
                                      RMB             RMB          US$
                                      (Audited)       (Unaudited)  (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents             192,962         585,359      93,139
Time deposits with original           1,178,839       844,839      134,426
maturities exceeding three months
Held-to-maturity investments          20,000          -            -
Inventories                           1,583,283       1,542,854    245,490
Accounts receivable, net              67,369          60,841       9,681
Prepaid expenses and other current
assets (including expenses prepaid to
related parties amounting RMB9,625    142,307         187,701      29,865
and RMB2,406 (US$383) as of December
31, 2011 and September 30, 2012,
respectively)
Amounts due from related parties      188             323          51
Total current assets                  3,184,948       3,221,917    512,652
Fixed assets, net                     96,612          112,906      17,965
Intangible assets, net                -               44,432       7,070
Prepaid expenses and deposits         4,182           15,071       2,398
Total assets                          3,285,742       3,394,326    540,085
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank loans                 150,000         200,000      31,823
Accounts payable                      1,485,943       1,804,210    287,075
Deferred revenue                      213,230         209,215      33,289
Accrued expenses and other current    266,092         307,402      48,912
liabilities
Amounts due to related parties        12,691          2,355        375
Total current liabilities             2,127,956       2,523,182    401,474
Total liabilities                     2,127,956       2,523,182    401,474
Shareholders' equity:
Class A common shares (par value of
US$0.0001 per share, 686,505,790
shares authorized, 265,082,760 and    197             200          32
268,876,230 shares issued and
outstanding as of December 31, 2011
and September 30, 2012, respectively)
Class B common shares (par value of
US$0.0001 per share, 313,494,210
shares authorized, 131,916,660 and    103             103          16
131,916,660 shares issued and
outstanding as of December 31, 2011
and September 30, 2012, respectively)
Additional paid-in capital            1,825,873       1,851,289    294,566
Accumulated other comprehensive loss  (88,336)        (78,633)     (12,512)
Accumulated deficit                   (580,051)       (901,815)    (143,491)
Total shareholders' equity            1,157,786       871,144      138,611
Total liabilities and shareholders'   3,285,742       3,394,326    540,085
equity





Share-based compensation
(In thousands, except share related data)
                        Three Months Ended
                        September 30,        September30,    September30,
                        2011                 2012             2012
                        RMB                  RMB              US$
                        (Unaudited)          (Unaudited)      (Unaudited)
Share-based compensation expenses
included are as follows:
Operating expenses:
 Fulfillment           65                   478              76
 Marketing             27                   83               13
 Technology and        197                  248              39
content
 General and           2,004                1,966            313
administrative
Total                   2,293                2,775            441
(1) This announcement contains translations of certain RMB amounts into U.S.
dollars at specified rates solely for the
 convenience of the reader. Unless otherwise noted, all translations from
RMB to U.S. dollars are made at a rate of
 RMB6.2848 to US$1.00, the noon buying rate on Sep 28, 2012 in The City
of New York for cable transfers of RMB
 as certified for customspurposes by the Federal Reserve Bank of New
York.
(2) Each ADS represents five common shares of the Company.



Non-GAAP operating loss, operating margin and net loss
(In thousands)
                                    Three Months Ended
                                    September30,  September30, September30,
                                    2011           2012          2012
                                    RMB            RMB           US$
                                    (Unaudited)    (Unaudited)   (Unaudited)
Loss from operations                (81,914)       (104,603)     (16,645)
Share-based compensation expenses   2,293          2,775         441
Non-GAAP operating loss             (79,621)       (101,828)     (16,204)
Operating margin                    -9.0%          -8.1%         -8.1%
Impact due to share-based           0.3%           0.2%          0.2%
compensation expenses
Non-GAAP operating margin           -8.7%          -7.9%         -7.9%
Net loss                            (73,374)       (100,059)     (15,922)
Share-based compensation expenses   2,293          2,775         441
Non-GAAP net loss                   (71,081)       (97,284)      (15,481)





Adjusted EBITDA
(In thousands)
                                   Three Months Ended
                                   September 30,  September 30, September 30,
                                   2011           2012          2012
                                   RMB            RMB           US$
                                   (Unaudited)    (Unaudited)   (Unaudited)
Loss from operations               (81,914)       (104,603)     (16,645)
Add back:
Depreciation and amortization    7,243          11,187        1,780
Share-based compensation expenses 2,293          2,775         441
Adjusted EBITDA                   (72,378)       (90,641)      (14,424)





SOURCE E-commerce China Dangdang Inc.

Website: http://ir.dangdang.com
 
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