LightInTheBox Holding Co., Ltd. Reports Third Quarter 2013 Financial Results

  LightInTheBox Holding Co., Ltd. Reports Third Quarter 2013 Financial Results

               3Q13 Net Revenues Up 33.4% YoY to $68.1 million

       3Q13 Gross Margin Increased 160 Basis Points to 43.9% from 42.3%

   Conference Call to be Held at 8:00 AM Eastern Time on November 19, 2013

Business Wire

BEIJING -- November 19, 2013

LightInTheBox Holding Co., Ltd. (NYSE:LITB) ("LightInTheBox" or the
"Company"), a global online retail company that delivers products directly to
consumers around the world, today announced its unaudited financial results
for the third quarter of 2013, ended September 30, 2013.

Third Quarter 2013 Highlights

  *Net revenues were $68.1 million, an increase of 33.4% from $51.1 million
    in the same quarter of 2012, primarily driven by an increase of 74.7% in
    total number of customers served in the third quarter of 2013.
  *Gross margin increased by 160 basis points to 43.9% from 42.3% in the same
    quarter of 2012.
  *Adjusted operating loss (non-GAAP) (1) was $2.5 million, compared to an
    adjusted operating income of $0.4 million in the same quarter of 2012.
  *Net loss was $2.4 million, compared to a net loss of $1.0 million in the
    same quarter of 2012.
  *Adjusted net loss (non-GAAP) (2) was $1.9 million, compared to an adjusted
    net loss of $0.2 million in the same quarter of 2012.
  *Revenue attributed to repeat customers increased 92.0% to $23.8 million
    from the same quarter of 2012.

Mr. Alan Guo, Chairman and CEO of LightInTheBox, commented, “Our net revenues
in the third quarter, which is a seasonally weaker quarter, grew by 33.4%
compared to our prior year period, meeting our revenue forecast range.
Geographically, Europe and South America contributed most significantly to our
year-over-year growth, increasing by 92.2% and 105.0%, respectively. Excluding
the revenue contribution from our apparel category, third quarter revenue from
our other categories increased 59.6% from the prior year period. In terms of
revenue growth in our product categories, our largest contributors in
percentage terms came from our small accessories and gadgets and home and
garden product categories.”

“Responding to both customer needs and the competitive environment, our
apparel category, which remains our second largest product category, is
undergoing adjustments. We are implementing improvements within customized
wedding and special occasion apparel in the areas of management,
merchandising, supply chain, and customer service. We are enhancing our
product offerings in the apparel segment by placing greater emphasis on other
product lines beyond wedding and special occasion wear, such as fast fashion
apparel, which are resulting in increased purchase levels among our customers
for such products. We believe this expanded apparel offering will provide us
with increased ability to accelerate sales of both new and repeat customers.”

“Our total number of customers increased by 74.7% to 1.3 million and our total
number of orders increased by 80.0% to 1.6 million in the third quarter
compared to the prior year period, demonstrating the growing consumer
attraction of our online retail platform. We added 8 new languages to our
website in the third quarter. Recently, we made good progress in revenues from
mobile ecommerce and recently we launched an updated version of our
LightInTheBox app, as well as our first MiniInTheBox app for the iPhone
platform to further improve our mobile customer experience. We are excited by
our opportunities ahead as we continue to build a strong growth platform that
we believe will result in improved operating performance and profitability in
the coming quarters.”

    Adjusted operating income (loss) is a non-GAAP measure, which is defined
(1) as income (loss) from operations excluding share-based compensation
    expenses.
(2) Adjusted net income (loss) is a non-GAAP measure, which is defined as net
    income (loss) excluding share-based compensation expenses.
    

Third Quarter 2013 Financial Results

Net revenues increased by 33.4% to $68.1 million from $51.1 million in the
same quarter of 2012. The increase was primarily driven by growth in the
number of customers and total orders.

During the third quarter of 2013, apparel, small accessories and gadgets and
electronics and communication devices remained the largest three revenue
contributors. Revenues from small accessories and gadgets and electronics and
communication devices increased by 94.5% to $26.7 million and 12.1% to $10.2
million, respectively, from the same quarter of 2012. Revenues from apparel
decreased by 8.1% to $18.2 million from the same quarter of 2012. During the
third quarter of 2013, revenues from small accessories and gadgets, apparel
and electronics and communication devices represented 39.2%, 26.6% and 15.0%
of the Company's net revenues, respectively, as compared to 26.9%, 38.7% and
17.8% for the same period in the prior year, respectively.

Geographically, Europe remained the Company’s largest market with strong
revenues of $40.0 million, representing a year-over-year increase of 92.2%. As
a percentage of total revenues, revenues in Europe were 58.8% in the third
quarter of 2013, up from 40.8% in the same quarter of 2012.

Revenues in South America increased by 105.0% to $7.5 million in the third
quarter of 2013. As a percentage of total revenues, revenues in South America
was 11.0% in the third quarter of 2013.

Revenues in North America and other countries were $13.0 million and $7.6
million, respectively, in the third quarter of 2013. As a percentage of total
revenues, revenues in North America and other countries were 19.0% and 11.2%
in the third quarter of 2013, respectively.

Gross profit was $29.9 million in the third quarter of 2013, representing an
increase of 38.4% from $21.6 million in the same quarter of 2012. The increase
was driven by a significant increase in net revenues and continued gross
margin expansion as the Company continues to optimize its product mix. Gross
margin increased to 43.9% from 42.3% in the same quarter of 2012.

Total operating expenses in the third quarter of 2013 increased by 50.0% to
$33.0 million from $22.0 million in the same quarter of 2012. As a percentage
of total net revenues, total operating expenses increased to 48.4% from 43.1%
in the same quarter of 2012.

  *Fulfillment expenses increased by 52.0% to $3.8 million in the third
    quarter of 2013 from $2.5 million in the same quarter of 2012, primarily
    reflecting the increase in sales volume and number of orders fulfilled. As
    a percentage of total net revenues,  fulfillment expenses increased to
    5.6% from 4.9% in the same quarter of 2012.

    Selling and marketing expenses increased by 53.8% to $21.6 million in the
    third quarter of 2013 from $14.0 million in the same quarter of 2012,
    reflecting the Company’s efforts on growing its customer base. While
    selling and marketing expenses for the third quarter of 2013 increased by
    53.8%, the number of customers served by the Company increased by 74.7%
    and the number of total orders increased by 80.0% respectively over the
    same period of the prior year. As a percentage of total net revenues,
    selling and marketing expenses increased to 31.7% from 27.5% in the same
    quarter of 2012. The Company continues to believe that its selling and
    marketing expenses as a percentage of total net revenues will decrease in
    the long term as the Company achieves greater economies of scale and
    utilize its selling and marketing channels more efficiently.
  *General and administrative expenses increased by 39.3% to $7.6 million in
    the third quarter of 2013 from $5.4 million in the same quarter of 2012,
    reflecting the continued growth of the Company’s business operations. As a
    percentage of total net revenues, general and administrative expenses
    increased to 11.1% from 10.7% in the same quarter of 2012.

Loss from operations in the third quarter of 2013 increased to $3.1 million,
compared to a loss from operations of $0.4 million in the same quarter of
2012.

Adjusted loss from operations (non-GAAP), which excludes the impact of
share-based compensation expense, in the third quarter of 2013 was $2.5
million, compared to an adjusted income from operations (non-GAAP) of $0.4
million in the same quarter of 2012.

Net loss was $2.4 million in the third quarter of 2013, compared to a net loss
of $1.0 million in the same quarter of 2012.

Net loss per ADS was $0.05, compared to a net loss per ADS of $0.10 in the
third quarter of 2012. Each ADS represents two ordinary shares.

Adjusted net loss (non-GAAP), which excludes the impact of share-based
compensation expense, was $1.9 million or $0.04 per ADS in the third quarter
of 2013, compared to an adjusted net loss (non-GAAP) of $0.2 million or $0.05
per ADS in the third quarter of 2012.

Adjusted loss from operations and net loss (non-GAAP) for the three months
ended September 30, 2013 excluded $0.5 million of non-cash share-based
compensation expenses.

For the quarter ended September 30, 2013, the Company’s weighted average
number of ADS used in computing loss per ADS was 49,464,423.

As of September 30, 2013, the Company had cash and cash equivalents, term
deposit and restricted cash of $103.0 million, compared to $21.2 million as of
December 31, 2012.

Net cash provided by operating activities was $1.4 million for the three
months ended September 30, 2013, compared to $2.1 million in the same quarter
of 2012.

Business Outlook

For the fourth quarter of 2013, the Company expects its net revenues to be
between $75.0 million and $77.0 million, representing a year-over-year growth
rate of approximately 15.8% to 18.9%. These forecasts reflect the Company’s
current and preliminary view on the market and operational conditions, which
are subject to change.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on November
19, 2013 to discuss its financial results and operating performance for the
third quarter of 2013. To participate in the call, please dial the following
numbers:

US Toll Free: 1-866-519-4004
International: 65-6723-9381
Hong Kong: 800-930-346
China: 400-620-8038
Passcode: 97394822

A telephone replay will be available shortly after the call until November 26,
2013 by dialing:

US Toll Free: 1-855-452-5696
International: 61-2-8199-0299
Hong Kong: 800-963-117
China: 400-632-2162
Passcode: 97394822

A live and archived webcast of the conference call will be available at
http://ir.lightinthebox.com.

About LightInTheBox Holding Co., Ltd.

LightInTheBox is a global online retail company that delivers products
directly to consumers around the world. The Company offers customers a
convenient way to shop for a wide selection of lifestyle products at
attractive prices through its www.lightinthebox.com, www.miniinthebox.com and
other websites, which are available in 27 major languages and cover more than
80% of global Internet users. In 2012, the Company ranked number one in terms
of revenue generated from customers outside of China among all China-based
retail websites that source products from third-party manufacturers. For more
information, please visit www.lightinthebox.com.

Use of Non-GAAP Financial Measures

LightInTheBox uses non-GAAP net income/(loss), non-GAAP net income/(loss) per
basic and diluted ADS, non-GAAP income/(loss) from operations, non-GAAP net
income/(loss) margin, and non-GAAP operating income/(loss) margin, each of
which is a non-GAAP financial measure. Non-GAAP net income/(loss) is net
income/(loss) excluding share-based compensation expenses. Non-GAAP net
income/(loss) per basic and diluted ADS is non-GAAP net income/(loss) divided
by weighted average number of basic and diluted ADS, respectively. Non-GAAP
income/(loss) from operations is income/(loss) from operations excluding
share-based compensation expenses. Non-GAAP operating income/(loss) margin is
non-GAAP income/(loss) from operations as a percentage of net revenues.
Non-GAAP net income/(loss) margin is non-GAAP net income/(loss) as a
percentage of net revenues. The Company believes that separate analysis and
exclusion of the non-cash impact of share-based compensation adds clarity to
the constituent parts of its performance. The Company reviews these non-GAAP
financial measures together with GAAP financial measures to obtain a better
understanding of its operating performance. It uses these non-GAAP financial
measures for planning, forecasting and measuring results against the forecast.
The Company believes that non-GAAP financial measures are useful supplemental
information for investors and analysts to assess its operating performance
without the effect of non-cash share-based compensation expenses, which have
been and will continue to be significant recurring expenses in its business.
However, the use of non-GAAP financial measures has material limitations as an
analytical tool.

One of the limitations of using non-GAAP financial measures is that they do
not include all items that impact the Company’s net income/(loss) for the
period. In addition, because non-GAAP financial measures are not measured 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 non-GAAP financial measure in isolation
from or as an alternative to the financial measure prepared in accordance with
U.S. GAAP. The presentation of these non-GAAP financial measures is not
intended to be considered in isolation from, or as a substitute for, the
financial information prepared and presented in accordance with U.S. GAAP. For
more information on these non-GAAP financial measures, please see the table
captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” at the end
of this release.

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 third 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.

                                                     
                                                           
LightInTheBox Holding Co., Ltd.
Condensed Consolidated Balance Sheets
(U.S. dollar in thousands, or otherwise noted)
                                                           
                                    As of December31,     As of September30,
                                    2012                   2013
                                    (Note)                 (Unaudited)
ASSETS
Current Assets
Cash and cash equivalents           19,972                 71,799
Term deposit                        —                      30,088
Restricted cash                     1,217                  1,125
Accounts receivable                 249                    275
Inventories, net                    5,753                  4,476
Prepaid expenses and other          10,562                 9,016
current assets
Total current assets                37,753                 116,779
Property and equipment, net         1,792                  2,989
Long-term deposit                   293                    496
TOTAL ASSETS                        39,838                 120,264
                                                           
LIABILTIES
Current Liabilities
Accounts payable                    9,150                  13,420
Advance from customers              7,098                  6,699
Accrued expenses and other          12,811                 13,699
current liabilities
Convertible notes                   7,788                  —
Total current liabilities           36,847                 33,818
TOTAL LIABILITIES                   36,847                 33,818
                                                           
Series C convertible                41,471                 —
redeemable preferred shares
EQUITY
Series A convertible                5,000                  —
preferred shares
Series B convertible                11,270                 —
preferred shares
Ordinary shares                     2                      7
Additional paid-in capital          10,459                 152,517
Accumulated deficit                 (65,181)               (65,977)
Accumulated other                   (30)                   (101)
comprehensive loss
TOTAL (DEFICIT) EQUITY              (38,480)               86,446
TOTAL LIABILITIES AND SERIES
C CONVERTIBLE REDEEMABLE            39,838                 120,264
PREFERRED SHARES AND
(DEFICIT) EQUITY

Note:
The condensed consolidated balance sheet as of December 31, 2012 is derived
from the audited consolidated financial statements of the Company as of and
for the year ended December 31, 2012.



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

                                            Three-month Period Ended
                                               September30,   September 30,
                                               2012              2013
Net revenues                                   51,053            68,125
Cost of goods sold                             (29,447)          (38,230)
Gross profit                                   21,606            29,895
Operating expenses
Fulfillment                                    (2,497)           (3,796)
Selling and marketing                          (14,048)          (21,604)
General and administrative                     (5,434)           (7,569)
Total operating expenses                       (21,979)          (32,969)
Loss from operations                           (373)             (3,074)
Interest (expense) income                      (609)             653
Loss before income taxes                       (982)             (2,421)
Income taxes expenses                          —                 (12)
Net loss                                       (982)             (2,433)
Accretion for Series C convertible             700               —
redeemable preferred shares
Net loss attributable to ordinary              (1,682)           (2,433)
shareholders
                                                                 
Weighted average numbers of shares used
in calculating loss per ordinary share
—Basic                                         34,986,784        98,928,846
—Diluted                                       34,986,784        98,928,846
                                                                 
Net loss per ordinary share
—Basic                                         (0.05)            (0.02)
—Diluted                                       (0.05)            (0.02)
                                                                 
Net loss per ADS (2 ordinary shares
equal to 1 ADS)
—Basic                                         (0.10)            (0.05)
—Diluted                                       (0.10)            (0.05)

                                           
                                               
LightInTheBox Holding Co., Ltd.
Unaudited Reconciliations of GAAP and Non-GAAP Results
(U.S. dollar in thousands, except share data and per share data, or otherwise
noted)
                                               
                                               Three-month Period Ended
                                               September 30,   September 30,
                                               2012              2013
Loss from operations                           (373)             (3,074)
Share-based compensation expenses              753               542
Non-GAAP income (loss) from operations         380               (2,532)
                                                                 
Net loss                                       (982)             (2,433)
Share-based compensation expenses              753               542
Non-GAAP net loss                              (229)             (1,891)
                                                                 
Net loss attributable to ordinary              (1,682)           (2,433)
shareholders
Share-based compensation expenses              753               542
Non-GAAP net loss attributable to              (929)             (1,891)
ordinary shareholders
                                                                 
Non-GAAP weighted average numbers of
shares used in calculating net loss per
ordinary share
—Basic                                         34,986,784        98,928,846
—Diluted                                       34,986,784        98,928,846
                                                                 
Non-GAAP net loss per ordinary share
—Basic                                         (0.03)            (0.02)
—Diluted                                       (0.03)            (0.02)
                                                                 
Non-GAAP net loss per ADS (2 ordinary
shares equal to 1 ADS)
—Basic                                         (0.05)            (0.04)
—Diluted                                       (0.05)            (0.04)



LightInTheBox Holding Co., Ltd.
Unaudited Condensed Consolidated Statements of Cash Flows
(U.S. dollar in thousands, or otherwise noted)

                                            Three-month Period Ended
                                               September 30,   September 30,
                                               2012              2013
Net loss                                       (982)             (2,433)
Adjustments to reconcile net loss to net
cash provided by operating activities
Depreciation and amortization                  258               371
Share-based compensation                       753               542
Amortization of debt discount                  369               —
Interest on convertible notes                  242               —
Changes in operating assets and
liabilities
Accounts receivable                            (88)              (37)
Inventories, net                               (1,732)           (896)
Prepaid expenses and other current             (1,399)           (1,096)
assets
Accounts payable                               4,579             3,138
Advance from customers                         (772)             616
Accrued expense and other current              1,032             1,238
liabilities
Long-term deposit                              (111)            (29)
Cash provided by operating activities          2,149            1,414
Cash flows from investing activities
Purchase of property and equipment             (437)             (349)
Increase in term deposit                       —                 (30,088)
Decrease (increase) in restricted cash         25               (7)
Net cash used in investing activities          (412)            (30,444)
Cash flows from financing activity
Proceeds from exercise of share options        —                 113
Payment of interest of convertible loan        —                 (1,157)
Payment of initial public offering             (42)             (789)
expenses
Net cash used in financing activities          (42)             (1,833)
                                                                 
Effect of exchange rate changes on cash        (1)              6
and cash equivalents
                                                                 
Cash and cash equivalents at beginning         16,974           102,656
of period
Cash and cash equivalents at end of            18,668           71,799
period

Contact:

Investor Relations Contact
LightInTheBox Holding Co., Ltd.
Margaret Shi, Investor Relations
Tel: +86 (10) 5692 0099 ext 8124
Email: ir@lightinthebox.com
OR
ICR, Inc.
Bill Zima
Tel: +1 (646) 405-4933
Email: bill.zima@icrinc.com