Good business trends at VLOV

23 Aug '10

5 min read

General and Administrative Expenses -- Second quarter 2010 general and administrative expense totaled $1.0 million, or 6% of sales. This compares to $0.4 million, or 3% of sales in the second quarter of 2009. General and administrative expense for the first six months of 2010 totaled $1.9 million, or 5% of sales, compared to $1.1 million, or 3% of sales in the period of 2009. These increases in general administrative expenses are due to increased costs from operating as a US publicly traded company.

Net Income
Net income attributable to common stockholders in the second quarter of 2010 was $4.5 million, or $0.26 per diluted share, versus $2.3 million, or $0.14 per diluted share, in the comparable period of 2009. Net income for the six months ended June 30, 2010 was $5.5 million, or $0.32 per diluted share, versus $6.1 million, or $0.39 per diluted share for the same six-month period in 2009.

Adjusted Net Income
Second quarter 2010 adjusted net income (non-GAAP) was $2.3 million, which excludes a non-cash gain of $2.2 million related to the fair value of the Company's warrants. Adjusted diluted earnings per share (non-GAAP) for the three months ended June 30, 2010 was $0.13 versus $0.14 during the second quarter of 2009.

Adjusted net income for the six months ended June 30, 2010 was $5.7 million, which excludes a non-cash loss of $0.2 million related to the fair value of the Company's warrants. Adjusted earnings per share (non-GAAP) for the six months ended June 30, 2010 was $0.33 per fully diluted share, versus $6.1 million or $0.39 per fully diluted share during the six months ended June 30, 2009. For more information about the non-GAAP financial measures contained in this press release, please see "About Non-GAAP Financial Measures" below.

Balance Sheet
As of June 30, 2010, VLOV had current assets of $31.9 million and current liabilities of $5.5 million, which is net of the $3.8 million derivative liability related to the Company's warrants. The $3.8 million derivative liability will be allocated to equity if the warrants are exercised and eliminated if the warrants expire. The $3.8 million derivative liability does not require a cash settlement. Our cash balance as of August 13, 2010 was $9.5 million.

VLOV, Inc., a leading lifestyle apparel designer based in China, designs, sources and markets VLOV brand fashion-forward apparel for middle-class Chinese men. VLOV products are sold through 519 points of sale across northern, central and southern China.

VLOV Inc

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