Home / Knowledge / News / Apparel/Garments / VLOV posts Q1 financial results
VLOV posts Q1 financial results
19
May '10
VLOV, Inc., China-based designer of VLOV brand men's apparel, announced financial results for the first quarter ended March 31, 2010.

Sales - Net sales in the first quarter of 2010 were $18.1 million compared to $17.9 million in the first quarter of 2009. The results reflect mixed performance throughout the regions where the Company's distributors operate their VLOV points of sale ("POS"). While sales increased in 8 of the 12 regions, particularly northeastern China, sales in some of the southern regions were down significantly due to some underperforming POS. Because these locations were not consistent with VLOV's enhanced brand image, they were closed by the distributors after the Chinese New Year and reopened in new locations during April. The Company is providing regional marketing and advertising support in conjunction with the distributors.

Cost of Sales - Cost of sales for the first quarter of 2010 was $11.1 million, down 2.8% compared to $11.5 million in the 2009 period. As a percentage of net sales, cost of sales decreased to 61.7% versus 64.2% a year ago, primarily due to the Company's shift from sub-contract manufacturing to O.E.M. manufacturing that began in 2009.

Gross Profit - First quarter gross profit increased 8.2% to $6.9 million versus $6.4 million a year ago, while gross margin improved 250 basis points to 38.3% in the first quarter of 2010. The increase in gross margin is primarily attributable to a 15% increase in the Company's average selling price to its distributors.

Operating Expense - Operating expenses were $2.3 million, or 12.8% of sales, compared to $1.4 million, or 7.6% of sales, in the first quarter of 2009. The year-over-year increase of $1 million is primarily attributable to higher selling expense, which reflects planned increases in advertising and marketing to help the Company penetrate new markets. First quarter 2010 advertising expense totaled $1.4 million, or 7.5% of sales, which is consistent with the Company's prior guidance for full year expenditures between 8%-10% of total sales in 2010. This compares to $0.6 million, or 3.9% of sales in the first quarter of 2009. General and administrative expenses increased to $0.8 million compared to $0.6 million a year ago, reflecting higher expenses related to design and product development initiatives.

Operating Income - Income from operations in the first quarter of 2010 came in at $4.6 million compared to $5.0 million in the first quarter of 2009. Operating margin was 25.5% versus 28.2% in the 2009 period.

Net Income - Net income attributable to common stockholders in the first quarter of 2010 was $1.1 million, or $0.06 per diluted share, versus $3.8 million, or $0.25 per diluted share, in the comparable period of 2009. 2010 first quarter net income includes a non-cash loss of $2.3 million relating to the change in the fair value of warrants as a result of the Company's classification and adoption of ASC 815-40-15 that requires the Company to record its warrants as a liability primarily because the Company's functional currency is the Chinese Renminbi while the Company's reporting currency is the US Dollar. The corresponding liability increase does not have to be settled in cash by the Company and will be allocated against the Company's common stock if the warrants are exercised or eliminated if the warrants expire.

Must ReadView All

Apparel/Garments | On 23rd Feb 2017

NAFTA renegotiation puts Mexico-US jeans trade at risk

The almost imminent renegotiation of the North America Free Trade...

Rick Helfenbein (left), president and CEO of AAFA, with Juan Estrada, chief of party, Hub; Courtesy: Hub

Apparel/Garments | On 23rd Feb 2017

AAFA inks agreement for best manufacturing in East Africa

The American Apparel & Footwear Association (AAFA) has entered into a ...

Mango vice-chairman and member of the board of directors Daniel Lopez (L) with Ananth Narayanan, CEO, Myntra & Jabong. Courtesy: Myntra

Apparel/Garments | On 23rd Feb 2017

Mango awards distribution & management rights to Myntra

Mango, the Spanish fast fashion brand, has awarded its master...

Interviews View All

Rashi Menda
Zapyle

Every fifth sale we make on Zapyle is a repeat purchase

Sanjay Desai & Ashish Mulani
True Colors

Digital textile printing will be the technology of the future

Vasanth Kumar
Max Fashion India

‘Traditional high-street retailers are now willing to offer franchisees to ...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer Prathyusha Garimella is known for blending...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
February 2017

February 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search