VLOV brand delivers double-digit revenue growth
VLOV, Inc announced record financial results for the fourth quarter and full year ended December 31, 2009.
Fourth Quarter 2009
For the fourth quarter of 2009, net sales increased 56.7% to $18.5 million, compared to $11.8 million in the fourth quarter of 2008. Fourth quarter gross profit improved to $6.8 million versus $4.1 million in the comparable period of 2008, while gross margin increased to 36.5% compared to 35.1% in the fourth quarter of 2008.
Operating expenses were $5.2 million, or 28.2% of sales compared to $1.2 million, or 10.1% of sales in the 2008 period. The year-over-year increase is primarily attributable to costs associated with the Company's financing transactions in the fourth quarter of 2009. Income from operations in the fourth quarter of 2009 was $1.5 million compared to $2.9 million in the prior year period.
Net loss attributable to common shareholders was $2.4 million compared to net income of $2.2 million in the fourth quarter of 2008, while diluted net loss per share came in at $0.14 versus diluted earnings per share of $0.15 in the prior year period. Fourth quarter net income was $1.6 million, and adjusted diluted earnings per share (non-GAAP) came in at $0.10 on an additional 1.8 million shares.(1). The increase in share count from 14.6 million in the 2008 period to 16.4 million in the 2009 period reflects the issuance of preferred and common shares and common stock purchase warrants in the fourth quarter of 2009.
"We are pleased to report a strong fourth quarter and a very successful 2009," said Mr. Qingqing Wu, Chairman and CEO of VLOV. "The year was highlighted by record financial results, as well as a number of accomplishments from both a strategic and operating perspective. We delivered double-digit revenue growth, solid gross profit and operating margins, and adjusted diluted earnings per share of $0.65. We enhanced VLOV's lifestyle brand positioning by delivering a more distinct fashion-forward point of view in our collections, while also providing the customer with a more compelling shopping environment. In fact, we are particularly proud to note that the Company received China Fashion Week's prestigious Menswear Design Award for 2009. We also streamlined VLOV's distributor relationships, dedicating our resources only to best-in-class partners who can assist us in taking the VLOV brand to the next level."
Full Year 2009
Full year 2009 net sales increased 24% to $64.3 million, reflecting continued strong demand for the Company's fashion-forward apparel. Gross profit for the year increased 25% to $23.3 million versus $18.6 million in 2008, while gross margin improved to 36.2% compared to 35.8% in 2008, primarily due to the Company's enhanced outsourcing strategy.
Operating expenses were $9.7 million, or 15.1% of sales, compared to $6.2 million, or 12.0% of sales in 2008. The year-over-year increase is primarily attributable to higher promotional and advertising expenses and reflects the Company's focus on further increasing awareness of the VLOV brand. Income from operations in 2009 was $13.6 million, an increase of 10% over $12.3 million in 2008.