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VLOV, Inc. (VLOV) Posts Solid Q4, FY2011 Financial Performance

VLOV, a men's lifestyle apparel designer in the People's Republic of China, today announced its financial results for the three and 12 months ended December 31, 2011, reflecting record revenue and increased brand awareness. (All amounts in thousands, in U.S. dollars, except for percentages).

The company reported full year 2011 net sales at $88,826, an increase of 20.3 percent compared with net sales of $73,834 reported for 2010.

Total cost of sales for 2011 was $50,064, an increase of 18.1 percent compared to total cost of sales of $43,863 reported for the comparable 12 months of 2010. Cost of sales as a percentage of net sales decreased to 56.3 percent of total net sales for 2011 from 59.4 percent of total net sales for 2010. Gross margin as a percentage of net sales increased to 43.6 percent for 2011 compared to 40.5 percent for 2010.

Net income for 2011 was $13,928, a decrease of 7.0 percent compared to net income of $14,986 reported for 2010. Adjusted net income (non-GAAP) increased by 5.1 percent to $13,289 compared to adjusted net income of $12,635 reported for 2010.

As of December 31, 2011, VLOV had $14.7 million in cash and cash equivalents; $56.4 million in current assets; and $14.0 million in total liabilities. As of April 10, 2012, VLOV had $23.6 million in cash and cash equivalents.

"Fiscal 2011 was a year of important accomplishments and successes," Qingqing Wu, chairman and CEO of VLOV stated in the press release. "We had record revenue while broadening global awareness of our brand by presenting at Mercedes Benz Fashion Week in both Beijing and New York City."

For the fourth quarter ended December 31, 2011, VLOV reported a 25.4 percent increase in net sales to $31.0 million; gross margin of 44 percent; and adjusted net income (non-GAAP) of $4.3 million, or adjusted earnings per share of $0.55.

"We were able to achieve significant growth in both revenue and earnings during the fourth quarter despite fewer store locations collectively operated by our distributors. We remain committed to working closely with our distributors who have been extremely pleased with our initiatives to build VLOV's global brand image and who are making investments to further elevate their VLOV stores. We also plan to open additional stores in Fujian and most importantly, continue to provide our customers with fashion-forward designs that embody their successful lifestyle," Wu stated.

VLOV sells its products through distributors in 393 points of sale (POS) throughout China. The company currently owns and operates 20 stores in Fujian Province: 13 store locations acquired June 30, 2011, and seven additional stores opened since the acquisition.

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