SHANGHAI, May 22 /Xinhua-PRNewswire/ -- Home Inns & Hotels Management Inc. (Nasdaq: HMIN), a leading economy hotel chain in China, today announced its un-audited financial results for the quarter ended March 31, 2007.
First Quarter 2007 Highlights
-- Total revenues for the quarter increased 65.5 % year-over-year to
RMB183.1 million (US$23.7 million).
-- Income from operations was RMB15.9 million (US$2.1 million), an
increase of 24.9% year-over-year. Excluding share-based compensation
charge, income from operations (non-GAAP) was RMB17.6 million (US$2.3
million), up 34.7% year-over-year.
-- Net income for the quarter was RMB3.0 million (US$0.4 million). Net
income was negatively impacted by non-recurring charge of RMB6.1
million (US$0.8 million) for re-measurement of net deferred tax assets.
Excluding this impact, net income (non-GAAP) was RMB9.1 million (US$1.2
million).
-- EBITDA (non-GAAP), defined as earnings before interest, taxes,
depreciation and amortization, was RMB25.8 million (US$3.3 million),
representing a 22.3% increase year-over-year. Excluding foreign
exchange losses of RMB6.1 million (US$0.8 million) and share-based
compensation expenses of RMB1.7 million (US$0.2 million), EBITDA (non-
GAAP) was RMB33.7 million (US$4.4 million), up 56.6% year-over-year.
-- Diluted earnings per share amounted to RMB0.04 (US$0.01), and diluted
earnings per ADS was RMB0.09 (US$0.01). Each ADS represents two of our
ordinary shares. Excluding the non-recurring charge for re-measurement
of net deferred tax assets, diluted earnings per share (non-GAAP) would
be RMB0.13 (US$0.02) and diluted earnings per ADS (non-GAAP) would be
RMB0.26 (US$0.03).
-- During the first quarter of 2007, Home Inns opened 11 new hotels. As
of March 31, 2007, the Home Inns hotel chain consisted of 145 hotels in
operation with an additional 48 hotels under development, covering 53
cities in China.
-- Occupancy rate for our Home Inns hotel chain was 86% in the first
quarter of 2007, compared with 90% during the same period in 2006 and
90% in the previous quarter.
-- RevPAR, defined as revenue per available room, was RMB151, compared
with RMB157 in the same period of 2006 and RMB165 in the previous
quarter.
“We are pleased with our first quarter results given that we typically experience lower occupancy rates during the Chinese New Year holidays,” said Mr. David Sun, Home Inn’s Chief Executive Officer. “We are maintaining our leadership position in the economy hotel industry in China and continue to capitalize on our early mover advantage by rapidly expanding our geographic coverage and increasing penetration in existing markets.”
As of March 31, 2007, the Home Inns hotel chain consisted of 97 leased-and-operated hotels and 48 franchised-and-managed hotels in operation, with an additional 36 leased-and-operated hotels and 12 franchised-and-managed hotels under development, covering 53 cities in China. The average number of rooms per hotel in operation is 120.
First Quarter 2007 Financial Results
For the first quarter of 2007, Home Inns reported total revenues of RMB183.1 million (US$23.7 million), representing a 65.5% increase year-over-year.
Total revenues from leased-and-operated hotels for the first quarter of 2007 were RMB174.6 million (US$22.6 million), representing a 60.7% increase year-over-year. The Company opened 3 new lease-and-operated hotels during the quarter.
Total revenues from franchised-and-managed hotels for the first quarter of 2007 were RMB8.5 million (US$1.1 million), representing a 327.0% increase year-over-year. The Company opened 8 new franchised-and-managed hotels during the quarter.
Occupancy rate for the entire Home Inns hotel chain was 86% in the first quarter of 2007, compared with 90% in the same period in 2006 and 90% in the previous quarter. RevPAR in the first quarter of 2007 was RMB151, compared with RevPAR of RMB157 in the same period in 2006 and RMB165 in the previous quarter. The decrease in occupancy rate and RevPAR comparing to the fourth quarter of 2006 was primarily due to the impact of the Chinese New Year which typically results in decreased business travel activities. Compared to first quarter of 2006, we entered into more new cities and second-tier cities in late 2006 and the first quarter 2007. Hotels in these cities usually take slightly longer time to ramp up.
Total operating expenses for the quarter were RMB156.7 million (US$20.3 million). Total operating expenses excluding share-based compensation expenses (non-GAAP) were RMB154.9 million (US$20.1 million) or 84.6% of total revenues, compared to 82.8% in the same period of 2006, and 81.4% in the previous quarter. Factors that led to these changes are discussed in detail below.
Total leased-and-operated hotel costs were RMB136.2 million (US$17.6 million), representing 78.0% of leased-and-operated hotel revenue compared with 76.5% for the same quarter in 2006 and 74.2% for the previous quarter. The percentage increase from the previous quarter was primarily due to the impact of the Chinese New Year, and the percentage increase year-over-year was due to the lower occupancy rate discussed previously, as well as higher number of new leased-and-operated hotels under construction.
Selling and marketing expenses were RMB4.1 million (US$0.5 million), an increase of 144.1% year-over-year and a decrease of 5.1% sequentially. The increase year-over-year was primarily attributable to increases in advertising activities during the quarter.
The first quarter’s general and administrative expenses were RMB16.3 million (US$2.1 million). General and administrative expenses excluding share-based compensation (non-GAAP) were RMB14.6 million (US$1.9 million), or 8.0% of total revenues, compared with 6.2% in the same period of 2006 and 8.0% in the previous quarter. The year-over-year increase was primarily due to the increased share-based compensation cost and legal and accounting expenses we incurred as a public company.
Income from operations for the quarter was RMB15.9 million (US$2.1 million). Income from operations excluding share-based compensation expenses (non-GAAP) was RMB17.6 million (US$2.3 million) or 9.6% of total revenues, compared to 11.8% in the same period of 2006 and 12.1% in the previous quarter. The decrease in operating margin was primarily due to 1) the higher leased-and-operated hotel costs as a percentage of leased-and-operated hotel revenues as discussed above, partially offset by the increased mix of franchise revenues which have no direct cost, and 2) increased sales and marking expenses and general and administrative expenses as a public company.
EBITDA (non-GAAP) for the quarter was RMB25.8 million (US$3.3 million). EBITDA was reduced by foreign exchange losses of RMB6.1 million (US$0.8 million) and share-based compensation expenses of RMB1.7 million (US$0.2 million). EBITDA excluding foreign exchange losses and share-based compensation expenses (non-GAAP) increased 56.6% year-over-year, though it decreased by 3.7% from the previous quarter due to the negative impact of the Chinese New Year.
Net income for the quarter was RMB3.0 million (US$0.4 million). Net income was reduced by the non-recurring charge of RMB6.1 million (US$0.8 million) for re-measurement of net deferred tax assets, foreign exchange losses of RMB6.1 million (US$0.8 million) and share-based compensation expenses of RMB1.7 million (US$0.2 million).
On March 16, 2007, the PRC National People’s Congress passed the China Corporate Income Tax Law which will reduce the income tax rate for most enterprises from 33% to 25%, effective on January 1, 2008. This is expected to lower our effective tax rate. As a result, net deferred tax assets are expected to be reduced because of the re-measurement at lower enacted income tax rate for most temporary differences that are expected to be recovered or settled in the future. We assessed this impact and recorded in the current quarter a non-recurring charge of RMB6.1 million (US$0.8 million) which represents the total re-measurement impact for net deferred tax assets recognized before January 1, 2007.
Basic and diluted earnings per share amounted to RMB0.05 (US$0.01) and RMB0.04 (US$0.01), respectively, and basic and diluted earnings per ADS were RMB0.09 (US$0.01) and RMB0.09 (US$0.01), respectively. Excluding the non-recurring charge for re-measurement of net deferred tax assets, diluted earnings per ADS (non-GAAP) would be RMB0.26 (US$0.03).
Net operating cash flow for the first quarter of 2007 was RMB23.4 million (US$3.0 million). Capital expenditures for the quarter were RMB55.3 million (US$7.2 million).
As of March 31, 2007, Home Inns had cash and cash equivalents of RMB674.2 million (US$87.3 million). Home Inns completed follow-on offering in May 2007, raising net proceeds of approximately US$48.1 million.
Outlook for Second Quarter 2007
Home Inns expects its total revenues in the second quarter of 2007 to be in the range of RMB228 million (US$29.5 million) to RMB238 million (US$30.8 million). This forecast reflects Home Inns’ current and preliminary view, which is subject to change.
Conference Call Information
Home Inns’ management will hold an earnings conference call at 9 PM on May 21, 2007 U.S. Eastern Standard Time (9 AM on May 22, 2007 Beijing/Hong Kong time).
Dial-in details for the earnings conference call are as follows:
China Mainland (toll free): 10.800.130.0399
Hong Kong: +852.3002.1672
U.S. and International: +1.617.213.8893
Passcode for all regions: HOME INNS
A replay of the conference call may be accessed by phone at the following number until 10 PM on May 25, 2007 U.S. Eastern Standard Time.
International: +1.617.801.6888
Passcode: 64086577
Additionally, a live and archived webcast of this conference call will be available at http://english.homeinns.com .
About Home Inns
Home Inns is a leading economy hotel chain in China based on the number of hotels and hotel rooms, as well as the geographic coverage of the hotel chain. Since Home Inns commenced operations in 2002, it has become one of the best-known economy hotel brands in China. Home Inns offers a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Home Inns’ ADSs, each of which represents two ordinary shares, are currently trading on the NASDAQ Global Market under the symbol “HMIN.” For more information about Home Inns, please visit http://english.homeinns.com .
Safe Harbor
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the outlook for the second quarter of 2007 and quotations from management in this announcement, as well as Home Inns’ strategic and operational plans, contain forward-looking statements. Home Inns may also make written or oral forward-looking statements in its periodic reports to the Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to first parties. Statements that are not historical facts, including statements about Home Inns’ beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our anticipated growth strategies; our future business development, results of operations and financial condition; expected changes in our revenues and certain cost or expense items; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; our ability to hire, train and retain qualified managerial and other employees; our ability to develop new hotels at desirable locations in a timely and cost-effective manner; the expected growth of the Chinese economy hotel market; and Chinese governmental policies relating to private managers and operators of hotels and applicable tax rates.
Further information regarding these and other risks is included in our registration statements on Form F-1 and other documents filed with the SEC. Home Inns does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of May 22, 2007, and Home Inns undertakes no duty to update such information, except as required under applicable law.
Non-GAAP Financial Measures
To supplement Home Inns’ un-audited consolidated financial results presented in accordance with U.S. GAAP, Home Inns uses the following non-GAAP measures defined as non-GAAP financial measures by the SEC: total operating expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, income from operations excluding share-based expenses, net income excluding the non-recurring charge, foreign exchange losses and share-based compensation, adjusted EBITDA, and basic and diluted earnings per share and per ADS excluding the non-recurring charge. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of GAAP and non-GAAP results” set forth at the end of this release.
Home Inns believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective. Home Inns believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to Home Inns’ historical performance and liquidity. Home Inns computes its non-GAAP financial measures using the same consistent method from quarter to quarter. Home Inns believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP financial measures excluding share-based compensation expenses is that share-based compensation expenses have been and will continue to be a significant recurring expense in our business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
Home Inns’ management also believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization is a useful financial metric to assess our operating and financial performance before the impact of investing and financing transactions and income taxes. In addition, Home Inns’ management believes that EBITDA is widely used by other companies in the lodging industry and may be used by investors as a measure of our financial performance. Given the significant investments that Home Inns has made in property, plant and equipment, depreciation and amortization expense comprises a meaningful portion of our cost structure. Home Inns’ management believes that EBITDA will provide investors with a useful tool for comparability between periods because it eliminates depreciation and amortization expense attributable to capital expenditures. The presentation of EBITDA should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.
The use of EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets, income tax expense, interest expense and interest income have been and will be incurred and are not reflected in the presentation of EBITDA. Each of these items should also be considered in the overall evaluation of our financial results. Additionally, EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. Home Inns compensates for these limitations by providing the relevant disclosure of our depreciation and amortization, interest expense and interest income, income tax expense, capital expenditures and other relevant items both in our reconciliations to the U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance. The term EBITDA or EBITDA is not defined under U.S. GAAP, and EBITDA is not a measure of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider this data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, our EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as we do.
Reconciliations of Home Inns’ non-GAAP financial measures, including EBITDA, to consolidated statement of operations information are included at the end of this press release.
Home Inns & Hotels Management Inc.
Consolidated Balance Sheet Information
December 31, 2006 March 31, 2007
RMB RMB US$
(unaudited) (unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents 758,003,839 674,188,738 87,293,963
Restricted cash -- 60,326,760 7,811,109
Accounts receivable 8,902,565 12,711,416 1,645,874
Receivables from related
parties 197,788 -- --
Consumables 12,131,304 9,413,149 1,218,815
Prepayments and other current
assets 10,529,624 11,925,417 1,544,104
Deferred tax assets, current 5,670,939 5,670,939 734,273
Total current assets 795,436,059 774,236,419 100,248,138
Property and equipment, net 458,058,608 496,538,825 64,291,851
Goodwill 32,906,112 32,906,112 4,260,684
Intangible assets, net 3,021,795 3,201,000 414,466
Other assets 4,175,804 5,068,315 656,245
Deferred tax assets, non-
current 26,420,799 24,214,847 3,135,339
Total assets 1,320,019,177 1,336,165,518 173,006,723
LIABILITIES
Current liabilities:
Accounts payable 8,919,148 7,888,007 1,021,339
Payables to related parties 7,389,990 6,194,226 802,028
Short-term borrowings 124,000,000 214,310,000 27,748,861
Current portion of long-term
loan from a related party 10,000,000 -- --
Salaries and welfare payable 22,496,135 12,837,579 1,662,210
Income tax payable 18,399,704 19,225,651 2,489,337
Other taxes payable 4,548,918 5,110,979 661,770
Deferred revenues 18,612,207 19,983,619 2,587,479
Provisions for customer reward
program 2,743,366 3,240,401 419,567
Other payables and accruals 106,119,839 88,656,691 11,479,269
Deferred tax liabilities,
current -- -- --
Total current liabilities 323,229,307 377,447,153 48,871,860
Deferred rental 44,103,281 49,275,225 6,380,157
Long-term loan from a related
party 50,000,000 -- --
Deferred tax liability, non-
current 165,074 155,065 20,078
Total liabilities 417,497,662 426,877,443 55,272,095
Minority interest 12,782,963 13,604,827 1,761,553
Commitments and contingencies
Shareholders’ equity
Ordinary shares (US$0.005 par
value; 200,000,000 shares
authorized, 65,712,839 and
65,921,765 shares issued and
outstanding as of December 31,
2006 and March 31, 2007,
respectively) 2,690,943 2,699,057 349,474
Additional paid-in capital 813,222,265 816,201,747 105,681,809
Statutory reserves 23,414,541 23,414,541 3,031,715
Deferred share-based
compensation -- -- --
Retained earnings 50,410,803 53,367,903 6,910,077
Total shareholders’ equity 889,738,552 895,683,246 115,973,075
Total liabilities and
shareholders’ equity 1,320,019,177 1,336,165,518 173,006,723
Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
is based on the noon buying rate of US$1.00=RMB7.7232 on March 31,
2007 in The City of New York for cable transfers of RMB as
certified for customs purpose by Federal Reserve Bank of New York.
Home Inns & Hotels Management Inc.
Consolidated Statement of Operations Information
Quarter Ended
March 31, 2006 December 31,2006 March 31, 2007
RMB RMB RMB US$
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Leased-and-
operated
hotels 108,681,107 171,447,065 174,639,597 22,612,336
Franchised-and-
managed hotels 1,990,460 7,641,832 8,499,354 1,100,496
Total revenues 110,671,567 179,088,897 183,138,951 23,712,832
Less: Business
tax and
related
surcharges (5,907,104) (11,545,980) (10,555,565) (1,366,735)
Net revenues 104,764,463 167,542,917 172,583,386 22,346,097
Operating costs and
expenses:
Leased-and-
operated hotel
costs -
Rents and
utilities (36,511,695) (52,347,055) (59,103,797) (7,652,760)
Personnel
costs* (17,711,024) (28,069,548) (29,444,152) (3,812,429)
Depreciation
and
amortization (9,077,927) (13,569,820) (16,692,993) (2,161,409)
Consumables,
food and
beverage (8,165,300) (14,593,337) (13,564,210) (1,756,294)
Others (11,641,494) (18,649,549) (17,417,237) (2,255,184)
Total leased-and-
operated hotel
costs (83,107,440) (127,229,309) (136,222,390) (17,638,076)
Sales and
marketing
expenses (1,683,526) (4,329,343) (4,109,459) (532,093)
General and
administrative
expenses* (7,224,863) (15,843,119) (16,334,607) (2,115,005)
Total operating
costs and expenses (92,015,829) (147,401,771) (156,666,456) (20,285,174)
Income from
operations 12,748,634 20,141,146 15,916,931 2,060,923
Interest income 68,007 6,031,112 7,055,483 913,544
Interest expense (1,149,383) (1,778,676) (2,541,069) (329,018)
Other non-operating
income 50,126 343,262 238,196 30,842
Foreign exchange
gain or loss, net (48,070) (6,063,602) (6,146,310) (795,824)
Income before income
tax expense,
minority interests
and share of income
of affiliated
companies 11,669,314 18,673,242 14,523,230 1,880,467
Income tax expense (2,739,316) (5,652,998) (10,721,776) (1,388,256)
Minority interests (1,045,973) (1,276,740) (844,354) (109,327)
Net income 7,884,025 11,743,504 2,957,100 382,884
Amount allocated to
participating
preference
shareholders (3,591,532) (1,170,707) -- --
Net income available
to ordinary
shareholders 4,292,493 10,572,797 2,957,100 382,884
Earnings per share
- Basic 0.16 0.19 0.05 0.01
- Diluted 0.15 0.18 0.04 0.01
Weighted average
ordinary shares
outstanding
- Basic 27,399,140 56,260,181 65,829,216 65,829,216
- Diluted 28,696,632 59,229,417 68,979,887 68,979,887
* Share-based
compensation
expense was
included in the
statement of
operations as
follows:
Leased-and-operated
hotel costs -
Personnel costs 3,027 2,948 2,920 378
General and
administrative
expenses 343,570 1,561,741 1,720,438 222,762
Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
is based on the noon buying rate of US$1.00=RMB 7.7232 on March
31, 2007 in The City of New York for cable transfers of RMB as
certified for customs purpose by Federal Reserve Bank of New York.
Note 2: For the quarter ended March 31, 2007, Income tax expenses
Included a non-recurring charge of RMB6,096,529 (US$789,379)
for re-measurement of net deferred tax assets recognised before
January 1, 2007, which was resulted from the change of income tax
rates for most Chinese enterprises from 33% at the present to 25%
effective on January 1, 2008. (for the quarter ended March 31,
2006 and December 31, 2006: Nil)
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results
Quarter Ended March 31, 2007
GAAP % of Share-based % of Non-GAAP % of
Result Total Compensation Total Result Total
RMB Revenue RMB Revenue RMB Revenue
Leased-and-
operated
hotel
costs (136,222,390) 74.4% 2,920 0.0% (136,219,470) 74.4%
Sales and
marketing
expenses (4,109,459) 2.2% -- 0.0% (4,109,459) 2.2%
General
and
adminis-
trative
expenses (16,334,607) 8.9% 1,720,438 0.9% (14,614,169) 8.0%
Total
operating
costs and
expenses (156,666,456) 85.5% 1,723,358 0.9% (154,943,098) 84.6%
Income
from
operations 15,916,931 8.7% 1,723,358 0.9% 17,640,289 9.6%
Quarter Ended March 31, 2007
GAAP % of Share-based % of Non-GAAP % of
Result Total Compensation Total Result Total
US$ Revenue US$ Revenue US$ Revenue
Leased-and-
operated
hotel
costs (17,638,076) 74.4% 378 0.0% (17,637,698) 74.4%
Sales and
marketing
expenses (532,093) 2.2% -- 0.0% (532,093) 2.2%
General
and
adminis-
trative
expenses (2,115,005) 8.9% 222,762 0.9% (1,892,243) 8.0%
Total
operating
costs and
expenses (20,285,174) 85.5% 223,140 0.9% (20,062,034) 84.6%
Income
from
operations 2,060,923 8.7% 223,140 0.9% 2,284,063 9.6%
Quarter Ended December 31, 2006
GAAP % of Share-based % of Non-GAAP % of
Result Total Compensation Total Result Total
RMB Revenue RMB Revenue RMB Revenue
Leased-and-
operated
hotel
costs (127,229,309) 71.0% 2,948 0.0% (127,226,361) 71.0%
Sales and
marketing
expenses (4,329,343) 2.4% -- 0.0% (4,329,343) 2.4%
General
and
adminis-
trative
expenses (15,843,119) 8.8% 1,561,741 0.9% (14,281,378) 8.0%
Total
operating
costs and
expenses (147,401,771) 82.3% 1,564,689 0.9% (145,837,082) 81.4%
Income
from
operations 20,141,146 11.2% 1,564,689 0.9% 21,705,835 12.1%
Quarter Ended March 31, 2006
GAAP % of Share-based % of Non-GAAP % of
Result Total Compensation Total Result Total
RMB Revenue RMB Revenue RMB Revenue
Leased-and-
operated
hotel
costs (83,107,440) 75.1% 3,027 0.0% (83,104,413) 75.1%
Sales and
marketing
expenses (1,683,526) 1.5% -- 0.0% (1,683,526) 1.5%
General
and
adminis-
trative
expenses (7,224,863) 6.5% 343,570 0.3% (6,881,293) 6.2%
Total
operating
costs and
expenses (92,015,829) 83.1% 346,597 0.3% (91,669,232) 82.8%
Income
from
operations 12,748,634 11.5% 346,597 0.3% 13,095,231 11.8%
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended
March 31, December 31,
2006 2006 March 31, 2007
RMB RMB RMB US$
(unaudited) (unaudited)(unaudited)(unaudited)
Net income (GAAP) 7,884,025 11,743,504 2,957,100 382,884
Non-recurring charge
for re-measurement of
net deferred tax
assets (Note1) -- -- 6,096,529 789,379
Net income excluding non-
recurring income tax expense 7,884,025 11,743,504 9,053,629 1,172,263
Quarter Ended
March 31, December 31,
2006 2006 March 31, 2007
RMB RMB RMB US$
(unaudited) (unaudited)(unaudited)(unaudited)
Net income available to
ordinary shareholders (GAAP) 4,292,493 10,572,797 2,957,100 382,884
Non-recurring charge
for re-measurement of
net deferred tax
assets (Note1) -- -- 6,096,529 789,379
Net income available to
ordinary shareholders
excluding non-recurring
income tax expense 4,292,493 10,572,797 9,053,629 1,172,263
Quarter Ended
March 31, December 31,
2006 2006 March 31, 2007
RMB RMB RMB US$
(unaudited) (unaudited) (unaudited)(unaudited)
Earnings per share (GAAP)
- Basic 0.16 0.19 0.05 0.01
- Diluted 0.15 0.18 0.04 0.01
Earnings per share excluding
non-recurring provision for
deferred tax assets ( Note
1)
- Basic 0.16 0.19 0.14 0.02
- Diluted 0.15 0.18 0.13 0.02
Note 1: For the quarter ended March 31, 2007, Income tax expenses
included a non-recurring charge of RMB6,096,529 (US$789,379) for
re-measurement of net deferred tax assets recognised before
January 1, 2007, which was resulted from the change of income tax
rates for most Chinese enterprises from 33% at the present to 25%
effective on January 1, 2008. (for the quarter ended March 31,
2006 and December 31, 2006: Nil)
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended
March 31, December 31,
2006 2006 March 31, 2007
RMB RMB RMB US$
(unaudited) (unaudited) (unaudited)(unaudited)
Net income (GAAP) 7,884,025 11,743,504 2,957,100 382,884
Interest income (68,007) (6,031,112) (7,055,483) (913,544)
Interest expenses 1,149,383 1,778,676 2,541,069 329,018
Income tax expense 2,739,316 5,652,998 10,721,776 1,388,256
Depreciation and
amortization 9,409,087 14,209,255 16,653,405 2,156,283
EBITDA (Non-GAAP) 21,113,804 27,353,321 25,817,868 3,342,897
Foreign exchange
losses (gains), net 48,070 6,063,602 6,146,310 795,824
Share-based
compensation 346,597 1,564,689 1,723,358 223,140
EBITDA excluding foreign
exchange losses & share-
based compensation 21,508,471 34,981,611 33,687,536 4,361,861
%of total revenue 19.4% 19.5% 18.4% 18.4%
Home Inns & Hotels Management Inc.
Operating Data
As of and for the quarter ended
March 31, December 31, March 31,
2006 2006 2007
Total Hotels in operation:
Lease-and operated hotels 60 94 97
Franchised-and-managed hotels 15 40 48
Total rooms 8,972 16,162 17,417
Occupancy rate (as a percentage) 90.0% 90.0% 85.9%
Average daily rate (in RMB) 175 182 176
RevPAR (in RMB) 157 165 151
For investor and media inquiries, please contact:
Angela Li
Home Inns & Hotels Management Inc.
Tel: +86-21-3218-9988 x2004
Email: xlli@homeinns.com
