SHANGHAI, China, Nov. 15 /Xinhua-PRNewswire/ -- Home Inns & Hotels
Management Inc. (Nasdaq: HMIN), a leading economy hotel chain in China, today
announced its unaudited financial results for the quarter ended September 30,
2006.
Third Quarter 2006 Highlights
-- Total revenues increased 106.3% year-over-year and 15.9% sequentially
to RMB160.4 million (US$20.3 million).
-- Net income for the quarter was RMB7.9 million (US$ 1.0 million). Net
income available to ordinary shareholders was RMB4.5 million (US$0.6
million). Net income excluding share-based compensation expenses (non-
GAAP) was RMB21.6 million (US$2.7 million), an increase of 297.7% year-
over-year and 7.7% sequentially.
-- Adjusted EBITDA (non-GAAP), defined as earnings before interest,
taxes, depreciation, amortization and share-based compensation
expenses, was RMB41.8 million (US$5.3 million), an increase of
215.7% year-over-year and 8.3% sequentially.
-- Diluted earnings per share amounted to RMB0.14 (US$0.02), and diluted
earnings per ADS were RMB0.29 (US$0.04). Diluted earnings per share
excluding share-based compensation expenses (non-GAAP) were RMB0.39
(US$0.05), and diluted earnings per ADS excluding share-based
compensation expenses (non-GAAP) were RMB0.78 (US$0.10). Each ADS
represents two ordinary shares.
-- During the third quarter of 2006, Home Inns opened 25 new hotels. As
of September 30, 2006, the Home Inns hotel chain consisted of 107
hotels in operation with an additional 56 hotels under development,
covering 45 cities in China.
-- Occupancy rate for the Home Inns hotel chain was 94.0% in the third
quarter of 2006, compared with 93.1% during the same period in 2005
and 97.7% in the previous quarter.
-- RevPAR, defined as revenue per available room, was RMB172, compared
with RMB169 in the same period of 2005 and RMB182 in the previous
quarter. The sequential decrease in both occupancy rate and RevPAR
was primarily due to the 25 new hotels opened in the third quarter of
2006.
“We are pleased to report strong results for the third quarter of
2006,” said Mr. David Sun, Home Inn’s Chief Executive Officer. “We
continued our revenue growth momentum and executed on our expansion plan
while maintaining high occupancy and profitability.”
Mr. Sun continued, “In the quarters ahead, we will continue to leverage
our widely recognized brand name, nationwide scale and early mover advantage
in China’s economy hotel market to expand our network and provide a
comfortable and consistent lodging experience to a rapidly growing number of
business and leisure travelers.”
As of September 30, 2006, the Home Inns hotel chain consisted of 78
leased-and-operated hotels and 29 franchised-and-managed hotels in operation,
with an additional 33 leased-and-operated hotels and 23 franchised-and-
managed hotels under development, covering 45 cities in China. The average
number of rooms per hotel in operation was 119.
Third Quarter 2006 Financial Results
For the third quarter of 2006, Home Inns reported total revenues of
RMB160.4 million (US$20.3 million), representing a 106.3% increase year-over-
year and a 15.9% increase sequentially.
Total revenues from leased-and-operated hotels for the third quarter of
2006 were RMB153.0 million (US$19.4 million), representing a 101.4% increase
year-over-year and a 13.5% increase sequentially. The Company opened 15 new
lease-and-operated hotels during the quarter.
Total revenues from franchised-and-managed hotels for the third quarter
of 2006 were RMB7.4 million (US$0.9 million), representing a 312.2% increase
year-over-year and a 106.8% increase sequentially. The Company opened 10 new
franchised-and-managed hotels during the quarter.
Occupancy rate for the entire Home Inns hotel chain was 94.0% in the
third quarter of 2006, compared with 93.1% in the same period in 2005 and
97.7% in the previous quarter. RevPAR in the third quarter of 2006 was
RMB172, compared with RevPAR of RMB169 in the same period in 2005 and RMB182
in the previous quarter. The decrease in occupancy rate and RevPAR from the
second quarter of 2006 was primarily due to the 25 new hotels opened in the
third quarter of 2006.
Total operating expenses for the quarter were RMB137.6 million (US$17.4
million). Total operating expenses excluding share-based compensation
expenses (non-GAAP) were RMB123.9 million (US$15.7 million) or 77.3% of total
revenues, compared to 83.4% in the same period of 2005, and 74.5% in the
previous quarter.
Total leased-and-operated hotel costs were RMB105.4 million (US$13.3
million), representing an 85.5% increase over the same period in 2005 and a
19.9% increase over the second quarter of 2006. The increase was primarily
due to the new leased-and-operated hotels opened during the quarter.
Selling and marketing expenses were RMB3.3 million (US$0.4 million), an
increase of 59.3% year-over-year and 47.2% sequentially. The increase was
primarily attributable to increases in advertising activities and marketing
personnel during the quarter.
General and administrative expenses for the quarter were RMB29.0 million
(US$3.7 million). This quarter’s general and administrative expenses
included share-based compensation expenses of RMB13.7 million (US$1.7
million). Included in this amount are the following two items: in July 2006,
the Company sold approximately 2.8 million ordinary shares in a private
placement to certain individuals including certain executives and directors
of the Company. As the issue price was lower than the then fair market value
as assessed by an independent appraiser, a charge of RMB9.6 million (US$1.2
million) was taken. In addition, the Company recorded RMB3.3 million (US$0.4
million) to reflect certain severance arrangements relating to former
executives. Neither item was associated with Home Inns’ normal course of
business operations, and hence the company does not expect to incur such
charges on a recurring basis. Excluding share-based compensation expenses,
general and administrative expenses (non-GAAP) were RMB15.3 million (US$1.9
million) or 9.5% of total revenues, compared to 7.7% in the same period of
2005 and 9.4% in the previous quarter.
Adjusted EBITDA for the quarter was RMB41.8 million (US$5.3 million) or
26.1% of total revenues, compared to 17.0% in the same period of 2005 and
27.9% in the previous quarter.
Income from operations for the quarter was RMB13.6 million (US$1.7
million). Income from operations excluding share-based compensation (non-
GAAP) was RMB27.3 million (US$3.5 million) or 17.0% of total revenues,
compared to 11.0% in the same period of 2005 and 20.1% in the previous
quarter.
Net income for the quarter was RMB7.9 million (US$1.0 million). Net
income available to ordinary shareholders was RMB4.5 million (US$0.6
million). Net income excluding share-based compensation expenses (non-GAAP)
was RMB21.6 million (US$2.7 million) or 13.5% of total revenues, compared to
7.0% in the same period of 2005 and 14.5% in the previous quarter.
Basic and diluted earnings per share amounted to RMB0.15 (US$0.02) and
RMB0.14 (US$0.02), respectively, and basic and diluted earnings per ADS were
RMB0.29 (US$0.04) and RMB0.29 (US$0.04), respectively. Basic and diluted
earnings per share excluding share-based compensation expenses (non-GAAP)
were RMB0.40 (US$0.05) and RMB0.39 (US$0.05), respectively, and basic and
diluted earnings per ADS excluding share-based compensation expenses (non-
GAAP) were RMB0.80 (US$0.10) and RMB0.78 (US$0.10), respectively.
Capital expenditures for the quarter were RMB51.6 million (US$6.5
million).
As of September 30, 2006, Home Inns had cash and cash equivalents of
RMB161.4 million (US$20.4 million). Net operating cash flow for the third
quarter of 2006 was RMB46.3 million (US$5.9 million). Home Inns completed its
Nasdaq IPO in October 2006, receiving approximately US$72.8 million net
proceeds from the offering.
Outlook for Fourth Quarter 2006
Home Inns expects its total revenues in the fourth quarter of 2006 to be
in the range of RMB162 million (US$20.5 million) to RMB178 million (US$22.5
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 8 PM on
November 15, 2006 U.S. Eastern Standard Time (9 AM on November 16, 2006
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: +1-617-597-5324
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 November 22, 2006 U.S. Eastern Standard Time.
International: +1-617-801-6888
Passcode: 76628853
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 fourth quarter of 2006
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 third
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.
Further information regarding these and other risks is included in our
registration statement on Form F-1 and other documents filed with the
Securities and Exchange Commission. 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 November 15, 2006, and Home Inns undertakes no duty to
update such information, except as required under applicable law.
Non-GAAP Financial Measures
To supplement Home Inns’ consolidated financial results presented in
accordance with U.S. GAAP, Home Inns uses the following 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 share-based compensation expenses,
adjusted EBITDA, and basic and diluted earnings per share and per ADS
excluding share-based compensation expenses. 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 adjusted EBITDA, defined as
earnings before interest, income tax expense, depreciation and amortization
and share-based compensation expenses, 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 adjusted 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 adjusted 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 adjusted EBITDA has certain limitations. Depreciation and
amortization expense for various long-term assets, income tax expense,
interest expense, interest income and share-based compensation expenses have
been and will be incurred and are not reflected in the presentation of
adjusted EBITDA. Each of these items should also be considered in the
overall evaluation of our financial results. Additionally, adjusted 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 adjusted EBITDA is not defined under U.S.
GAAP, and adjusted 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 adjusted 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
adjusted 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 September September
31, 2005 30, 2006 30, 2006
RMB RMB US$
(unaudited) (unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents 37,727,231 161,401,264 20,420,200
Restricted cash 1,900,000 1,000,000 126,518
Accounts receivable 3,130,151 9,014,908 1,140,550
Receivables from related parties 15,729 -- --
Consumables 5,529,908 7,475,633 945,804
Prepayments and other current assets 5,484,080 12,978,182 1,641,975
Deferred tax assets, current 2,646,868 2,646,868 334,877
Total current assets 56,433,967 194,516,855 24,609,924
Property and equipment, net 267,675,576 380,106,796 48,090,435
Goodwill 32,906,112 32,906,112 4,163,223
Intangible assets, net 2,369,471 2,762,557 349,514
Other assets 2,968,829 3,555,812 449,875
Deferred tax assets, non-current 12,648,245 18,788,160 2,377,045
Total assets 375,002,200 632,636,292 80,040,016
LIABILITIES
Current liabilities:
Accounts payable 3,391,015 5,560,969 703,564
Payables to related parties 1,259,409 8,678,145 1,097,943
Short-term borrowings 20,000,000 86,000,000 10,880,567
Salaries and welfare payable 8,292,922 17,578,931 2,224,055
Income tax payable 11,389,738 11,273,155 1,426,259
Other taxes payable 2,016,325 3,456,331 437,289
Deferred revenues 6,442,135 17,903,842 2,265,162
Provisions for customer reward
program 776,645 2,254,023 285,175
Other payables and accruals 65,109,611 75,495,089 9,551,504
Deferred tax liabilities, current 508,916 508,916 64,387
Total current liabilities 119,186,716 228,709,401 28,935,905
Deferred rental 26,533,548 38,086,103 4,818,586
Long-term loan from a related party 40,000,000 60,000,000 7,591,093
Deferred tax liability, non-current 205,101 175,074 22,150
Total liabilities 185,925,365 326,970,578 41,367,734
Minority interest 9,994,321 11,506,225 1,455,747
Commitments and contingencies
Shareholders’ equity
Convertible preferred shares
Series A preferred shares
(US$0.005 par value; 17,241,400
shares authorized, issued and
outstanding) 713,541 713,541 90,276
Series B preferred shares
(US$0.005 par value; 2,417,645
shares authorized, issued and
outstanding) 100,055 100,055 12,659
Series C preferred shares
(US$0.005 par value; 3,265,841
shares authorized, issued and
outstanding) 135,149 135,149 17,099
Ordinary shares (US$0.005 par
value; 177,075,114 shares
authorized, 27,399,140 and
30,977,171 shares issued and
outstanding as of December 31,
2005 and September 30, 2006,
respectively) 1,133,911 1,276,848 161,545
Additional paid-in capital 152,878,585 229,852,055 29,080,473
Statutory reserves 11,360,020 11,360,020 1,437,249
Deferred share-based compensation (2,809,713) -- --
Retained earnings 15,570,966 50,721,821 6,417,234
Total shareholders’ equity 179,082,514 294,159,489 37,216,535
Total liabilities and shareholders’
equity 375,002,200 632,636,292 80,040,016
Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
is based on the noon buying rate of US$1.00=RMB7.9040
on September 30, 2006 in The City of New York for cable transfers
of RMB as certified for customs purpose by Federal Reserve Bank of
New York.
Home Inns & Hotels Management Inc.
Consolidated Statement of Operations Information
Quarter Ended
September June September September
30, 2005 30, 2006 30, 2006 30, 2006
RMB RMB RMB US$
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Leased-and-
operated
hotels 75,939,473 134,810,655 152,956,058 19,351,728
Franchised-and-
managed hotels 1,794,352 3,576,322 7,396,171 935,750
Total revenues 77,733,825 138,386,977 160,352,229 20,287,478
Less: Business
tax and
related
surcharges (4,369,882) (7,436,274) (9,087,206) (1,149,697)
Net revenues 73,363,943 130,950,703 151,265,023 19,137,781
Operating costs and
expenses:
Leased-and-
operated hotel
costs -
Rents and
utilities (26,825,328) (37,464,335) (45,253,311) (5,725,368)
Personnel
costs* (10,542,295) (18,790,527) (23,409,437) (2,961,720)
Depreciation
and
amortization (5,903,365) (10,651,811) (11,320,003) (1,432,187)
Consumables,
food and
beverage (5,838,976) (9,645,284) (11,077,789) (1,401,542)
Others (7,713,390) (11,380,097) (14,347,798) (1,815,258)
Total leased-and-
operated hotel
costs (56,823,354) (87,932,054) (105,408,338) (13,336,075)
Sales and
marketing
expenses (2,046,240) (2,214,431) (3,260,229) (412,478)
General and
administrative
expenses* (6,183,594) (13,627,129) (28,976,251) (3,666,024)
Total operating
costs and expenses (65,053,188) (103,773,614) (137,644,818) (17,414,577)
Income from
operations 8,310,755 27,177,089 13,620,204 1,723,204
Interest income 47,057 223,408 255,277 32,297
Interest expense (215,329) (1,569,845) (1,644,689) (208,083)
Other non-operating
income 116,530 1,650,373 3,264,850 413,063
Income before income
tax expense,
minority interests
and share of income
of affiliated
companies 8,259,013 27,481,025 15,495,643 1,960,481
Income tax expense (1,660,968) (6,464,601) (6,533,696) (826,632)
Minority interests (1,399,710) (1,651,386) (1,060,156) (134,129)
Net income 5,198,335 19,365,038 7,901,791 999,720
Amount allocated to
participating
preference
shareholders (2,368,078) (8,821,657) (3,360,682) (425,187)
Net income available
to ordinary
shareholders 2,830,257 10,543,381 4,541,109 574,533
Earnings per share
- Basic 0.10 0.38 0.15 0.02
- Diluted 0.10 0.37 0.14 0.02
Weighted average
ordinary shares
outstanding
- Basic 27,399,140 27,399,140 30,860,496 30,860,496
- Diluted 28,702,288 29,235,149 32,283,906 32,283,906
* Share-based
compensation
expense was
included in the
statement of
operations as
follows:
Leased-and-operated
hotel costs -
Personnel costs 937 3,019 2,986 378
General and
administrative
expenses (Note 2) 230,621 685,529 13,692,504 1,732,351
Note 1: The conversion of Renminbi ("RMB") into United States dollars
("US$") is based on the noon buying rate of US$1.00=RMB7.9040 on
September 30, 2006 in The City of New York for cable transfers
of RMB as certified for customs purpose by Federal Reserve Bank
of New York.
Note 2: For the quarter ended September 30, 2006, share-based
compensation expense included expenses associated with equity
issuance of RMB 9,564,136 (for the quarter ended June 30, 2006
and September 30, 2005: Nil) and expenses associated with
severance of RMB 3,314,800 (for the quarter ended June 30, 2006
and September 30, 2005: Nil).
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results
Quarter Ended September 30, 2006
ShareBased
GAAP %of Compen- %of Non-GAAP %of
Result Total sation Total Result Total
RMB Revenue RMB Revenue RMB Revenue
Leased-and-
operated hotel
costs (105,408,338) 65.7% 2,986 0.0% (105,405,352) 65.7%
Sales and
marketing
expenses (3,260,229) 2.0% -- 0.0% (3,260,229) 2.0%
General and
administrative
expenses (28,976,251) 18.1% 13,692,504 8.5% (15,283,747) 9.5%
Total operating
costs and
expenses (137,644,818) 85.8% 13,695,490 8.5% (123,949,328) 77.3%
Income from
operations 13,620,204 8.5% 13,695,490 8.5% 27,315,694 17.0%
Net income 7,901,791 4.9% 13,695,490 8.5% 21,597,281 13.5%
Earnings per
share
- Basic 0.15 0.26 0.40
- Diluted 0.14 0.25 0.39
Quarter Ended September 30, 2006
Sharebased
GAAP %of Compen- %of Non-GAAP %of
Result Total sation Total Result Total
US$ Revenue US$ Revenue US$ Revenue
Leased-and-
operated
hotel
costs (13,336,075) 65.7% 378 0.0% (13,335,697) 65.7%
Sales and
marketing
expenses (412,478) 2.0% -- 0.0% (412,478) 2.0%
General
and
administrative
expenses (3,666,024) 18.1% 1,732,351 8.5% (1,933,673) 9.5%
Total
operating
costs and
expenses (17,414,577) 85.8% 1,732,729 8.5% (15,681,848) 77.3%
Income
from
operations 1,723,204 8.5% 1,732,729 8.5% 3,455,933 17.0%
Net income 999,720 4.9% 1,732,729 8.5% 2,732,449 13.5%
Earnings
per share
- Basic 0.02 0.03 0.05
- Diluted 0.02 0.03 0.05
Quarter Ended June 30, 2006
Sharebased
GAAP %of Compen- %of Non-GAAP %of
Result Total sation Total Result Total
RMB Revenue RMB Revenue RMB Revenue
Leased-and-
operated
hotel
costs (87,932,054) 63.5% 3,019 0.0% (87,929,035) 63.5%
Sales and
marketing
expenses (2,214,431) 1.6% -- 0.0% (2,214,431) 1.6%
General
and
administrative
expenses (13,627,129) 9.8% 685,529 0.5% (12,941,600) 9.4%
Total
operating
costs and
expenses (103,773,614) 75.0% 688,548 0.5% (103,085,066) 74.5%
Income
from
operations 27,177,089 19.6% 688,548 0.5% 27,865,637 20.1%
Net income 19,365,038 14.0% 688,548 0.5% 20,053,586 14.5%
Earnings
per share
- Basic 0.38 0.01 0.40
- Diluted 0.37 0.01 0.38
Quarter Ended September 30, 2005
Share-
based
GAAP %of Compen- %of Non-GAAP %of
Result Total sation Total Result Net
RMB Revenue RMB Revenue RMB Revenue
Leased-and-
operated
hotel
costs (56,823,354) 73.1% 937 0.0% (56,822,417) 73.1%
Sales and
marketing
expenses (2,046,240) 2.6% -- 0.0% (2,046,240) 2.6%
General
and
administrative
expenses (6,183,594) 8.0% 230,621 0.3% (5,952,973) 7.7%
Total
operating
costs and
expenses (65,053,188) 83.7% 231,558 0.3% (64,821,630) 83.4%
Income
from
operations 8,310,755 10.7% 231,558 0.3% 8,542,313 11.0%
Net income 5,198,335 6.7% 231,558 0.3% 5,429,893 7.0%
Earnings
per share
- Basic 0.10 -- 0.11
- Diluted 0.10 -- 0.11
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results
(continued)
Quarter Ended
September June 30, September September
30, 2005 2006 30, 2006 30, 2006
RMB RMB RMB US$
(unaudited) (unaudited) (unaudited)(unaudited)
Net income (GAAP) 5,198,335 19,365,038 7,901,791 999,720
Interest income (47,057) (223,408) (255,277) (32,297)
Interest expenses 215,329 1,569,845 1,644,689 208,083
Income tax expense 1,660,968 6,464,601 6,533,696 826,632
Depreciation and
amortization 5,978,183 10,717,767 12,266,527 1,551,939
Share-based
compensation charge 231,558 688,548 13,695,490 1,732,729
Adjusted EBITDA (Non-GAAP) 13,237,316 38,582,391 41,786,916 5,286,806
% of total revenue 17.0% 27.9% 26.1% 26.1%
Home Inns & Hotels Management Inc.
Operating Data
As of and for the quarter ended
September June 30, September 30,
30, 2005 2006 2006
Total Hotels in operation:
Lease-and operated hotels 41 63 78
Franchised-and-managed hotels 13 19 29
Total rooms 6,512 9,707 12,729
Occupancy rate (as a percentage) 93.1% 97.7% 94.0%
Average daily rate (in RMB) 181 186 183
RevPAR (in RMB) 169 182 172
