Mcglaughlin Pformation Clothing Company Carefully Controls Costs And Reduces Losses

< p > 2013 third quarter performance summary: net operating income in the third quarter of 2013 was $21 million 400 thousand, down 40.5% compared to the 36 million quarter of 2012 third quarter net business income.

Gross profit in the third quarter was $9 million 500 thousand, down 27.6% from gross profit 13 million 100 thousand in the third quarter of 2012.

Gross margin was 44.3%, net loss was $5 million.

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Mr. Mcglaughlin, director and chief executive officer of P, said: "we continue to pform our company's business from e-commerce to" a target= "_blank" href= "//www.sjfzxm.com/" dress "/a" Brand Company, which includes multi-channel sales including online and offline.

In the third quarter, we opened up a new a href= "http://sjfzxm.com/news/index_s.asp", "direct store" /a ", selling our own brand of fast fashion new products.

At the same time, we should carefully control overall costs and expenses to reduce losses.

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< p > "I would like to thank Mr. Zhang for his outstanding work since he joined the company in 2009 and his selfless dedication to the company.

We wish him every success in the future.

He moved the work to Mr. Liu Guisheng by the end of this year.

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< p > Mr. Liu Guisheng will take the post of CFO after Mr. Zhang's departure, until the company determines the new successor.

Mr. Liu Guisheng joined Mcglaughlin in 2009 and was an important member of the company's financial team before 2010 IPO.

Before joining the a href= "http://sjfzxm.com/news/index_x.asp" > Mcglaughlin < /a >, Mr. Liu Guisheng worked in McDonald's and sharp sports for 7 years.

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< p > < strong > 2013 third quarter results < /strong > < /p >

< p > taking into account the seasonal factors of the industry, Mcglaughlin's financial performance in the 2012 quarter and the third quarter of 2013 is as follows: < /p >

< p > < strong > net operating income < /strong > /p >

< p > net operating income in the third quarter of 2013 was $21 million 400 thousand, down 40.5% from 36 million in the third quarter of 2012.

The main reason for this decline is the decline in net operating income of e-commerce channels, self run businesses and franchised stores.

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< p > < strong > e-commerce channel sales < /strong > /p >

In the third quarter of 2013, the net operating income of e-commerce channels in the 5 million 100 thousand quarter of the year was $5 million 100 thousand, down 70.2% from the 17 million 200 thousand quarter of the third quarter of 2012.

The decline is mainly due to the operation of M18.COM, which is managed by a new joint venture company and rebuilt into an open Internet trading platform. However, the revenue from independent e-commerce platforms such as Tmall and vip.com has increased.

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< p > {page_break} < /p >

< p > < strong > call center sales < /strong > < /p >

In the third quarter of 2013, the net income of the call center was $10 million 800 thousand, down 1.6% from its net operating income of 11 million dollars in the third quarter of 2012, P.

The decline is mainly due to the gradual decrease and stop of directory issuance since the beginning of 2013.

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< p > < strong > self run and franchised store sales < /strong > /p >

In the third quarter of 2013, the net sales revenue of self operated stores was $3 million 400 thousand, which was 12.3% lower than that of the 3 million 800 thousand quarter of 2012 for the third quarter of 2012.

The decline was mainly due to the decline in the number of self operated stores from the average of 85 in the third quarter of 2012 to the average of 58 in the third quarter of 2013.

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< p > in the third quarter of 2013, the net sales revenue of franchised stores was US $2 million 100 thousand, which was 47.2% lower than the net operating income of US $4 million in the third quarter of 2012.

The decline was mainly due to the decline in the number of franchised stores from the average of 265 in the third quarter of 2012 to the average of 217 in the third quarter of 2013, while the number of single store sales declined year-on-year.

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"P > < strong > product sales cost < /strong > /p >

The product sales cost of the "P" in the third quarter of 2013 was $11 million 900 thousand, which was 47.9% lower than the cost of sales of 22 million 900 thousand dollars in the third quarter of 2012.

The decline is mainly due to the decline in sales.

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< p > < strong > gross margin and gross profit margin < /strong > /p >

< p > gross profit in the third quarter of 2013 was $9 million 500 thousand, down 27.6% from 13 million 100 thousand US dollars in the third quarter of 2012.

The gross profit margin of the third quarter of 2013 was 44.3%, up 7.9% compared with the gross profit margin of 36.4% in the third quarter of 2012.

The increase in gross profit margin was mainly due to the increase of inventory turnover in e-commerce channels, and the increase in the net operating income of call center sales in the third quarter with higher gross profit margin. However, the impairment of inventories for new brands of stores was 700 thousand dollars offset the increase in some gross margin.

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< p > {page_break} < /p >

< p > < strong > operating expenses < /strong > /p >

< p > operating expenses in the third quarter of 2013 amounted to US $13 million 300 thousand, down 31.9% from 19 million 600 thousand US dollars in the third quarter of 2012.

The decrease is mainly due to the reduction of marketing and management costs.

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< p > in the third quarter of 2013, marketing and administrative expenses were $11 million 900 thousand, down 36.7% from the 18 million 800 thousand quarter of the third quarter of 2012.

The decrease was mainly due to a decrease in the number of employees and the decrease in advertising and IT costs after the operation of M18.COM was pferred to the joint venture company.

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< p > < strong > operating loss < /strong > < /p >

< p > operating loss in the third quarter of 2013 was US $3 million 900 thousand, and the operating loss in the third quarter of 2012 was US $6 million 500 thousand.

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< p > < strong > joint venture loss < /strong > < /p >

< p > in the third quarter of 2013, the loss from the joint venture was $1 million 400 thousand.

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< p > < strong > net loss and loss of each depository receipt < /strong > < /p >

< p > net loss in the third quarter of 2013 was US $5 million, and net loss in the third quarter of 2012 was US $6 million 100 thousand.

Excluding equity incentive fees, the net loss in the third quarter of 2013 was US $3 million 900 thousand, and the net loss in the third quarter of 2012 was US $5 million 800 thousand.

The third quarter of 2013 attributable to Mcglaughlin shareholders basically and diluted by each depository receipts, the loss was $0.41.

Each depository receipt is equal to 35 shares of common stock.

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< p > < strong > cash and short-term investments < /strong > /p >

< p > as of September 30, 2013, the balance of cash and cash equivalents was $6 million 400 thousand, and short-term investments were 12 million 800 thousand dollars in bank deposits.

In December 31, 2012, the balance of cash and cash equivalents amounted to US $13 million 300 thousand, and short-term investments amounted to US $20 million 700 thousand in bank deposits.

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< p > < strong > short-term borrowing < /strong > /p >

< p > up to September 30, 2013, the balance of short-term loans was $1 million 600 thousand, and there was no short-term borrowing in December 31, 2012.

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