omniture

7 Days Group Holdings Limited Announces Unaudited 2010 Fourth Quarter and Full Year Financial Results

2011-03-09 05:21 952

GUANGZHOU, China, March 9, 2011 /PRNewswire-Asia/ -- 7 Days Group Holdings Limited ("7 Days Group" or the "Company") (NYSE: SVN), a leading and fast growing national economy hotel chain based in China, today announced its unaudited financial results for the fourth quarter of 2010 and full year 2010.

  • Record 107 net hotels added in fourth quarter to a total of 568 hotels in operation. A total of 231 hotels in operation were added in full year 2010.
  • Fourth quarter total net revenue increased 41.4% year-over-year to RMB439.1 million.
  • Full Year adjusted EBITDA grew 51.9% year-over-year to RMB348.8 million.
  • Target of 290 new hotel openings in 2011, up from initial target of 240.

Fourth Quarter 2010 Financial Highlights

  • Total net revenues increased by 41.4% to RMB439.1 million (US$66.5 million) (1), compared to RMB310.5 million for the same period in the fiscal year 2009.
  • Income from operations was RMB32.1 million (US$4.9 million), compared to RMB26.8 million in the fourth quarter of 2009. Non-GAAP income from operations increased by 38.9% to RMB41.1million (US$6.2 million) from RMB29.6 million for the same period in the fiscal year 2009.
  • EBITDA was RMB84.7 million (US$12.8 million), compared to a loss of RMB30.1 million for the same period in 2009. Adjusted EBITDA increased by 35.6% year-over-year to RMB93.7 million (US$14.2 million). EBITDA margin was 19.3% as compared to a loss in the same period in the fiscal year 2009. Adjusted EBITDA margin was 21.3% compared to 22.3% in the same period in the fiscal year 2009.
  • Net income attributable to the Company's shareholders was RMB22.0million (US$3.3 million), compared to a net loss of RMB93.4 million for the same period in the fiscal year 2009. Non-GAAP net income was RMB31.0million (US$4.7 million), compared to RMB5.8 million for the same period in the fiscal year 2009.
  • Basic and diluted earnings per ADS(2) were RMB0.45 (US$0.07). Non-GAAP basic and diluted earnings per ADS were RMB0.61 (US$0. 09).and RMB0.60 (US$ 0.09), respectively.
  • Net operating cash inflow was RMB133.5 million (US$20.2 million), an increase of 54.3% compared to RMB86.5 million in the fourth quarter of the fiscal year 2009.

Full Year 2010 Financial Highlights

  • Total net revenues increased by 31.3% year-over-year to RMB1,498.9 million (US$227.1 million) compared to RMB1,141.3 million for 2009.
  • Income from operations was RMB154.1 million (US$23.3 million), compared to RMB73.9 million in the fiscal year 2009. Non-GAAP income from operations increased by 98.8% to RMB169.6 million (US$25.7 million) from RMB85.3 million in the fiscal year 2009.
  • EBITDA was RMB333.3 million (US$50.5 million), a 188.6% increase compared to RMB115.5 million in the fiscal year 2009. Adjusted EBITDA was RMB348.8 million (US$52.8 million), compared to RMB229.7 million in the fiscal year 2009. EBITDA margin increased to 22.2% from 10.1% in the fiscal year 2009. Adjusted EBITDA margin increased to 23.3% from 20.1% in the fiscal year 2009.
  • Net income attributable to the shareholders was RMB117.7 million (US$17.8 million), compared to a net loss of RMB104.0 million in the fiscal year 2009. Non-GAAP net income was RMB133.2 million (US$20.2 million), compared to Non-GAAP net income of RMB10.3 million during the fiscal year 2009.
  • Basic earnings per ADS was RMB2.37 (US$0.36), and diluted earnings per ADS was RMB 2.34 (US$0.35), compared with the basic and diluted loss per ADS of RMB5.78 for the fiscal year 2009. Non-GAAP basic and diluted earnings per ADS were RMB2.67 (US$0.40).
  • Net operating cash inflow increased significantly to RMB371.0 million (US$56.2 million), compared to RMB248.6 million in the fiscal year 2009.

Fourth Quarter and Full Year 2010 Operational Highlights

  • Added a record 107 hotels, comprising 40 net leased-and-operated hotels and 67 net managed hotels in the fourth quarter 2010.
  • Added record 231 hotels, comprising 85 net leased-and-operated hotels and 146 net managed hotels in fiscal year 2010.
  • As of December 31, 2010, 7 Days Group had 568 hotels in operation, consisting of 321 leased-and-operated hotels and 247 managed hotels, representing a total of 56,410 rooms covering 89 cities.
  • As of December 31, 2010, there were 25 leased-and-operated hotels under conversion and 172 managed hotels contracted but not yet opened.
  • For full year 2010, occupancy rates for leased-and-operated hotels, managed hotels and all hotels were 91.0%, 84.0% and 88.7%, respectively, compared with 89.2%, 82.8% and 88.3%, respectively, in the fiscal year 2009. For fourth quarter 2010, occupancy rates for leased-and-operated hotels, managed hotels and all hotels were 86.2%, 80.4% and 83.9%, respectively, compared with 90.0%, 80.0% and 88.1%, respectively, in the fourth quarter 2009. The year-over-year decrease in occupancy rates in the fourth quarter was primarily a result of a record number of new hotels added in the fourth quarter and a decline in domestic travel to Guangzhou and surrounding areas due to the 16th Asian Games held in Guangzhou in the fourth quarter of 2010.
  • RevPAR(3) for leased-and-operated hotels was RMB143.4 in the fourth quarter of 2010, compared to RMB147.8 in the same period in the fiscal year 2009, while RevPAR for managed hotels was RMB124.9 in the fourth quarter of 2010 compared to RMB125.3 in the fourth quarter of 2009. The year-over-year decrease in RevPAR in the fourth quarter was primarily a result of a higher number of new hotels opened.
  • For the full year 2010, RevPAR for all hotels slightly increased to RMB143.9 from RMB140.9 in the fiscal year 2009; while RevPAR for leased-and-operated hotels and managed hotels were RMB150.0 and RMB131.6, respectively, up from RMB142.7 and RMB129.3, respectively, in the fiscal year 2009.
  • As of December 31, 2010, the number of 7 Days Club members increased by 69.2% to 16.5 million from 9.75 million as of December 31, 2009, with repeat customers accounting for 80% of total room nights in the fourth quarter of 2010.

Recent Business Developments:

Mr. Alex Nanyan Zheng, 7 Days Group's Chief Executive Officer and Director, commented, "I am pleased to announce a strong finish to 2010, which rounded out a year characterized by robust financial and operational growth in line with our expectations. Our results for the fourth quarter and full year were supported by ongoing economic growth in China and the rapid expansion of the domestic travel and lodging industries. Our ability to leverage these favorable dynamics by proactively increasing investment in business development, coupled with consistent execution of our strategy, helped us to achieve the highest number of new hotel openings for the full year in the economy hotel sector in China. Our 231 new hotels opened in fiscal 2010 is equal to the number of new hotel openings in 2008 and 2009 combined, a true testament of our ability to execute on our rapid expansion strategy. While the resulting increase in the number of hotel rooms in our portfolio has naturally impacted some of our hotel operating metrics, we remain confident that our operating performance will improve as the new hotels mature. As of December 31, 2010, we operated 568 hotels, nearly doubled our size of our hotel portfolio prior to becoming a public company in late 2009, and have expanded our geographic footprint to 89 cities in 2010 from 54 cities in the previous year.

"The impressive growth we achieved in 2010 has further strengthened the 7 Days Inn brand, and we are now the second largest economy hotel chain in China in terms of both number of hotels and rooms. Our success is attributable in large part to a deep understanding of our customer base and a consistent focus on catering to their core needs.  As such, when a guest chooses 7 Days Inn, they know they will have locations around the country to choose from, a fast and efficient reservation system, the ability to purchase quality hotel services on an as needed basis during the booking process, a quick check-in, a high quality, clean and comfortable guest room, and most importantly, a consistent experience at an affordable price.

"We continue to see significant growth opportunities in the economy hotel segment in China and we aim to accelerate our business development efforts in 2011, particularly within our managed hotel portfolio. We have made significant and rapid progress in developing our managed hotels, and thus far we are encouraged by the performance of our newly opened managed hotels. For 2011, in light of the favorable market conditions and our successful expansion efforts to date, we are revising our initial goal of opening 240 hotels and now target to open 290 new properties, including 80 leased-and-operated hotels and 210 managed hotels.  We believe the strength of our brand name, industry leading 7 Days Club, powerful eCommerce platform, low-cost strategy and focus on customer needs position us well to capture additional market share in 2011, especially in China's Tier 2 and Tier 3 cities. Since becoming a public company in November 2009, we have made significant progress in growing our business and we remain committed to delivering growth and increasing shareholder value."

Mr. Eric Haibing Wu, 7 Days Group's Chief Financial Officer, added, "Our financial results for the fourth quarter and full year, with both top- and bottom-line growth, benefited from our growth strategy. As expected, the rapid expansion of our hotel portfolio contributed to an increase in our hotel operating costs and operating expenses. As our hotel portfolio grows, we intend to leverage economies of scale, while remaining committed to maintaining a prudent cost structure. In 2011, we expect the contribution from managed hotels to increase and our overall outlook remains positive. We are confident that our planned expansion of our hotel base will support continued revenue and profit growth in the year ahead."

Fourth Quarter 2010 Unaudited Financial Results

Gross revenues. Gross revenues for the fourth quarter of 2010 were RMB465.0 million (US$70.5 million), representing a year-over-year increase of 41.2% from RMB329.4 million in the fourth quarter of 2009 and an increase of 8.5% from RMB428.5 million in the third quarter of 2010.

Gross revenues from leased-and-operated hotels. Gross revenues from leased-and-operated hotels for the fourth quarter of 2010 were RMB420.5 million (US$63.7 million), a 29.0% increase from RMB326.0 million in the fourth quarter 2009, and an increase of 5.8% from RMB397.3 million in the third quarter of 2010, driven by the expansion of the Company's hotel portfolio.

Gross revenues from managed hotels.  Gross revenues from managed hotels for the fourth quarter of 2010 increased by 1,209% year-over-year and by 42.6% quarter-over-quarter to RMB44.5 million (US$6.7 million) as the Company continued to expand its managed hotel portfolio in the fourth quarter of 2010. During the period, the Company opened 67 net managed hotels.

Total net revenues.  Total net revenues for the fourth quarter of 2010 were RMB439.1 million (US$66.5 million), representing a year-over-year increase of 41.4% from RMB310.5 million in fourth quarter 2009, resulting from continued growth in the number of hotels and an improved operating performance supported by the Company's powerful loyalty program, increased brand name recognition as well as an improved macro environment. Total net revenues increased by 8.3% on a sequential basis from RMB405.5 million in the third quarter of 2010.

Hotel operating costs. Hotel operating costs for the fourth quarter of 2010 were RMB345.5 million (US$52.3 million), or 78.7% of total net revenues, compared with 83.8% of total net revenues in the same quarter in 2009 and 74.7% for the third quarter of 2010. The improvement in operating costs as a percentage of total net revenues compared to the same quarter in 2009 was primarily due to revenue growth coupled with the Company's efforts to maintain a lean operating structure. The sequential increase in hotel operating costs as a percentage of the total net revenue from the third quarter of 2010 was due to a seasonal decline in operating performance while the costs were relatively fixed in the fourth quarter of 2010.

Sales and marketing expenses. Sales and marketing expenses for the fourth quarter of 2010 were RMB16.6 million (US$2.5 million), or 3.8% of total net revenues, compared with 3.0% of total net revenues in the same quarter in 2009 and 2.3% in the third quarter of 2010. The increase in sales and marketing costs as a percentage of revenue resulted from an increase in promotional activities in the fourth quarter.

General and administrative expenses. General and administrative expenses for the fourth quarter of 2010 were RMB44.8 million (US$6.8 million), or 10.2% of total net revenues, compared to RMB14.2 million, or 4.6% of total net revenues in the same quarter in 2009, and RMB28.0 million, or 6.9% of total net revenues in the third quarter of 2010. The year-over-year in increase in general and administrative expenses was a result of increased share based compensation expenses, a rise in incentive payment associated with better than expected business development activities and hotel opening schedule and a reduction in general administrative expenses in the prior year period due to a net gain of approximately RMB5.7 million upon termination of a lease in the fourth quarter 2009.

Accordingly, total operating costs and expenses was RMB407.0 million (US$61.7 million), representing 92.7% of total net revenues, compared to 91.4% of total net revenues in the same quarter of 2009 and 83.9% in the third quarter of 2010.

Income from operations. Income from operations for the fourth quarter of 2010 was RMB32.1 million (US$4.9 million), compared to RMB26.8 million in the fourth quarter 2009 and RMB65.4 million in the third quarter of 2010. The year-over-year rise in income from operations was primarily driven by the increased contribution from managed hotels in the portfolio. The sequential decrease in income from operations was primarily a result of seasonality. Non-GAAP income from operations was RMB41.1 million (US$6.2 million), compared to a non-GAAP income from operations of RMB29.6 million for the same quarter in 2009 and non-GAAP income from operations of RMB67.2 million in the third quarter of 2010.

EBITDA. EBITDA was RMB84.7 million (US$12.8 million) as compared to a loss of RMB30.1 million for the same period in 2009 and RMB111.1 million in the third quarter of 2010. Adjusted EBITDA for the fourth quarter of 2010 was RMB93.7 million (US$14.2 million), compared to RMB69.1 million for the same quarter in 2009 and RMB112.9 million in the third quarter of 2010. Adjusted EBITDA margin was 21.3% during the fourth quarter of 2010, compared to 22.3% in fourth quarter of 2009 and 27.8% in the third quarter of 2010.

Interest expense. Interest expense for the fourth quarter of 2010 was RMB0.3 million, compared to RMB18.2 million for the same period in 2009 and RMB0.02 million in the third quarter of 2010.

Income tax expense. Income tax expense for the fourth quarter of 2010 was RMB10.9 million (US$1.7 million), compared to RMB5.8 million in the fourth quarter of 2009 and RMB6.1 million in the third quarter of 2010.

Net income attributable to 7 Days Group Holdings Limited shareholders. Net income attributable to 7 Days Group Holdings Limited shareholders was RMB22.0 million (US$3.3 million) in the fourth quarter of 2010, compared to a net loss of RMB93.4 million in the fourth quarter of 2009 and RMB59.8 million in the third quarter of 2010.

Non-GAAP net income.  Non-GAAP net income was RMB31.0 million (US$4.7 million), compared to Non-GAAP net income of RMB5.8 million for the fourth quarter of 2009 and Non-GAAP net income of RMB61.7 million in the third quarter of 2010.

Basic and diluted earnings per ADS. Basic and diluted earnings per ADS were RMB0.45 (US$0.07) for the fourth quarter of 2010, compared to basic and diluted loss per ADS of RMB3.84 for the same quarter in 2009 and the basic earnings per ADS of RMB1.20 and diluted earnings per ADS of RMB1.19 in the third quarter 2010. Non-GAAP basic and diluted earnings per ADS were RMB0.61 (US$0. 09) and RMB0.60 (US$0.09) respectively, for the fourth quarter 2010, compared to non-GAAP basic and diluted earnings per ADS of RMB0.18 in the same quarter in 2009 and basic and diluted earnings per ADS of RMB1.24 and RMB1.23 in the third quarter 2010.

Cash and pledged bank deposits. As of December 31, 2010, the Company had cash and pledged bank deposits of RMB393.5 million (US$59.6 million), representing a quarter-over-quarter decrease of 13.1%, from RMB452.9 million as of September 30, 2010.

Operating cash flow. Net operating cash inflow for the fourth quarter of 2010 was RMB133.5 million (US$20.2 million), representing quarter-over-quarter increase of 37.6% from RMB97.0 million in the third quarter 2010 and a year-over-year increase of 54.3% from RMB86.5 million in fourth quarter 2009.

Full Year 2010 Unaudited Financial Results

Gross revenues. Gross revenues for 2010 were RMB1,587.0 million (US$240.5 million), representing a year-over-year increase of 31.1% from RMB1,210.1 million in 2009.

Gross revenues from leased-and-operated hotels. Gross revenues from leased-and-operated hotels for 2010 were RMB1,491.0 million (US$225.9 million), 24.0% higher than the fiscal year 2009's RMB1,202.0 million driven by the expansion in the number of leased-and-operated hotels.

Gross revenues from managed hotels.  Gross revenues from managed hotels for 2010 increased by 1,085.2% to RMB96.0 million (US$14.5 million) as more managed hotels were added to the Company's hotel portfolio.

Total net revenues.  Total net revenues for 2010 were RMB1,498.9 million (US$227.1 million), representing a year-over-year increase of 31.3% from RMB1,141.3 million in the fiscal year 2009. The growth was primarily driven by the expansion in the number of leased-and-operated hotels.

Hotel operating costs. Hotel operating costs for 2010 were RMB1,182.9 million (US$179.2 million), or 78.9% of total net revenues, compared with 85.1% of total net revenues in the fiscal year 2009.  The improvement in hotel operating costs as a percentage of total net revenues resulted from the increased operational leverage resulting from the significant increase in the number of hotels in operation and higher revenues.

Sales and marketing expenses. Sales and marketing expenses for the fiscal year 2010 were RMB39.6 million (US$6.0 million), or 2.6% of total net revenues, compared with 2.7% of total net revenues in the fiscal year 2009.

General and administrative expenses. General and administrative expenses for the fiscal year 2010 were RMB122.4 million (US$18.5 million), or 8.2% of total net revenues, compared with 5.7% of total net revenues in the fiscal year 2009. The year-over-year increase was primarily due to a rise in incentive payment associated with better than expected business development activities and hotel opening schedule, an increase in costs associated with being a publicly listed company in the U.S., higher share based compensation expenses, impairment of hotel assets and a reduction in general administrative expenses in the prior year period due to a net gain of approximately RMB5.7 million upon termination of a lease in the fourth quarter 2009.

Accordingly, total operating costs and expenses for the fiscal year 2010 was RMB1,344.9 million (US$203.8 million) representing 89.7% of total net revenues compare with 93.5% of total net revenues in the fiscal year 2009.

Income from operations. Income from operations for 2010 was RMB154.1 million (US$23.3 million), compared to RMB73.9 million in the fiscal year 2009. Non-GAAP income from operations increased to RMB169.6 million (US$25.7 million) from RMB85.3 million in the fiscal year 2009.

EBITDA.  EBITDA was RMB333.3 million (US$50.5 million), compared to RMB115.5 million in the fiscal year 2009. Adjusted EBITDA was RMB348.8 million (US$52.8 million), compared to RMB229.7 million in the fiscal year 2009. Adjusted EBITDA margin was 23.3%, an improvement of 3.2% in the fiscal year 2009.

Interest expense. Interest expense for the fiscal year 2010 was RMB2.1 million (US$0.3 million), representing a year-over-year decrease of 97.4%, from RMB81.9 million in the fiscal year 2009.

Change in fair value of ordinary share purchase warrants. There was no ordinary share purchase warrants in the fiscal year 2010, compared to a loss of RMB76.4 million in the fiscal year 2009.

Income tax benefit (expense). Income tax expense for 2010 was RMB35.8 million (US$5.4 million), compared to tax benefit of RMB5.0 million in the fiscal 2009.

Net income (loss) attributable to 7 Days Group Holdings Limited shareholders. Net income attributable to 7 Days Group Holdings Limited shareholders was RMB117.7 million (US$17.8 million) in 2010, compared to a net loss attributable to 7 Days Group Holdings Limited shareholders of RMB104.0 million in the fiscal year 2009.

Non-GAAP net income. Non-GAAP net income was RMB133.2 million (US$20.2 million), compared to net income of RMB10.3 million during the fiscal year 2009.

Basic and diluted net income (loss) per ADS. Basic and diluted income per ADS were RMB2.37 (US$0.36) and RMB 2.34 (US$ 0.35) for 2010, respectively. Non-GAAP basic and diluted earnings per ADS were RMB2.67 (US$0.40), compared to Non-GAAP basic and diluted earnings per ADS of RMB0.45 in the fiscal year 2009.

Operating cash flow. Net operating inflow for the fiscal year 2010 was RMB371.0 million (US$56.2 million), a substantial increase from RMB248.6 million in 2009.

Guidance

The Company expects to generate total net revenues in the range of RMB405 million to RMB410 million in the first quarter 2011. 7 Days Group expects full-year 2011 total net revenues to grow 32% to 36% over the full-year 2010. The forecasts reflect the Company's current and preliminary view, which is subject to change.

Conference Call

7 Days Group Holdings Limited senior management will host a conference call at 8:00 pm (Eastern) / 5:00 pm (Pacific) Tuesday, March 8, 2011, which is 9:00 am (Beijing) on Wednesday, March 9, 2011 to discuss its fourth quarter and full year 2010 financial results and recent business activity.  The conference call may be accessed by calling the following numbers:

China:

 

800 8190 121

 

 

Hong Kong:

 

852 2475 0994

 

 

US Toll Free:

 

1 866 5194 004

 

 

International:

 

65 6723 9381

 

 

Conference ID number:

 

19196240

 

 

Passcode:

 

7 Days

 

 

 

 


A live webcast of the conference call and replay will be available on the investor relations page of 7 Days Group's website at http://en.7daysinn.cn/.

A telephone replay will be available shortly after the call.  The dial-in details are as follows:

US:

 

1 866 214 5335

 

 

International:

 

61 2 8235 5000

 

 

Conference ID number:

 

19196240

 

 

 

 


About 7 Days Group Holdings Limited

7 Days Group is a leading and fast growing national economy hotel chain based in China. It converts and operates limited service economy hotels across major metropolitan areas in China under its award-winning "7 Days Inn" brand. The Company strives to offer consistent and high-quality accommodations and services primarily to the growing population of value conscious business and leisure travelers who demand affordable, clean, comfortable, convenient and safe lodging, and to respond to its guests' needs.

Use of Non-GAAP Financial Measures

To supplement 7 Days Group's unaudited financial results presented in accordance with U.S. GAAP, the Company has used the following non-GAAP measures defined as non-GAAP financial measures by the Securities and Exchange Commission (the "SEC") to report its financial results:

  • Non-GAAP income from operations represents income from operations reported in accordance with GAAP, excluding share-based compensation expense.
  • Non-GAAP net income represents net income reported in accordance with GAAP, excluding share-based compensation expense, loss on debt extinguishment and change in fair value of ordinary share purchase warrants, in each case, if any.
  • Non-GAAP earnings per ADS represents non-GAAP net income divided by the number of ADS used in computing basic and diluted earnings per ADS.
  • EBITDA represents net income reported in accordance with GAAP, adjusted for the effects of interest income and expense, provision for income taxes, depreciation and amortization.
  • Adjusted EBITDA represents EBITDA, excluding share-based compensation expense, loss on debt extinguishment and change in fair value of ordinary share purchase warrants, in each case, if any.

The Company believes EBITDA is a useful financial metric to assess its operating and financial performance before the impact of investing and financing transactions, if any, and income taxes. In addition, 7 Days Group believes that EBITDA is widely used by other companies in the lodging industry and may be used by investors as a measure of its financial performance. Given the significant investments that 7 Days Group has made in the past in property and equipment, depreciation and amortization expense comprises a meaningful portion of its cost structure. 7 Days Group 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 the Company's future results will be unaffected by other charges and gains the Company considers to be outside the ordinary course of its business.  7 Days Group also calculates Adjusted EBITDA excluding share-based compensation expense, loss on debt extinguishment and change in fair value of ordinary share purchase warrants, in each case, if any. The Company prepares its financial statements in accordance with GAAP and, accordingly, expenses its employee share options and recognizes, if any, the impact of loss on debt extinguishment and changes in the fair value of its ordinary share purchase warrants. Since share-based compensation expense, loss on debt extinguishment and change in fair value of ordinary share purchase warrants are non-cash expenses, the Company believes excluding them from its calculation of EBITDA allows it to provide investors with a more useful tool for assessing its operating and financial performance.

The use of EBITDA and Adjusted EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets, such as property and equipment, 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 its results. Additionally, EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of the Company's liquidity. The Company compensates for these limitations by providing the relevant disclosure of its depreciation and amortization, interest expense and interest income, income tax expense, capital expenditures, share-based compensation expense and other relevant items both in its reconciliations to the GAAP financial measures and in its consolidated financial statements, all of which should be considered when evaluating the Company's performance. The terms EBITDA and Adjusted EBITDA are not defined under GAAP, and EBITDA and Adjusted EBITDA are not measures of net income, operating income, operating performance or liquidity presented in accordance with GAAP. When assessing the Company's operating and financial performance, investors should not consider this data in isolation or as a substitute for the Company's net income, operating income or any other operating performance measure that is calculated in accordance with GAAP. In addition, the Company's EBITDA and Adjusted EBITDA may not be comparable to EBITDA or Adjusted EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA and Adjusted EBITDA in the same manner as the Company does.

For reasons same to the use of EBITDA and Adjusted EBITDA described above, the Company has also reported net income, basic and diluted earnings per ADS and income (loss) from operations on a non-GAAP basis, excluding share-based compensation expense, loss on debt extinguishment and change in fair value of ordinary share purchase warrants, in each case, if any, in the relevant period.  These non-GAAP operating measures are useful for understanding and assessing the Company's underlying business performance and operating trends and the Company expects to report net income, basic and diluted earnings per ADS and income (loss) from operations on a non-GAAP basis using a consistent method on a quarterly basis going forward.

7 Days Group believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing 7 Days Group's financial performance and liquidity and when planning and forecasting future periods. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP results with non-GAAP results for the periods set forth in the tables at the end of this release.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release contains "forward-looking statements," including, among other things, 7 Days Group's beliefs as to the improvement of macro environment and conditions, the factors driving expected growth, its revenue guidance for the first quarter and the full year of 2011, its increased investment in business development, the acceleration of increase of the size and scope of the Company's hotel network (especially with regards to managed hotels), expected number of new hotel openings in 2011 (including the related breakdown of expected new leased-and-operated hotels and new managed hotels), its ability to execute on our rapid expansion strategy, its ability to meet or exceed its hotel opening targets, its ability to understand the customer base and provide high quality, clean, comfortable and consistent experience at an affordable price, its implementation of various strategic and operational initiatives, its ability to capture additional market shares (especially in China's Tier 2 and Tier 3 cities), its ability to leverage the economies of scale and maintain a prudent cost structure, its expectation on the improvement of operating performance and the increase of contribution from managed hotels, and its expectation on the continued revenue and profit growth. These forward-looking statements are not historical facts but instead represent only the Company's belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. The Company's actual results and financial condition and other circumstances may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. In particular, the Company's operating results for any period are impacted significantly by the mix of leased-and-operated hotels and managed hotels in its chain, causing the Company's operating results to fluctuate and making them difficult to predict.

Other factors that could cause forward-looking statements to differ materially from actual future events or results include risks and uncertainties related to: risks associated with the Company's limited operating history and historical operating losses; uncertainties regarding the Company's ability to continue its growth and achieve profitability; uncertainties regarding the Company's ability to fund its working capital needs; uncertainties regarding the Company's ability to expand its operations while maintaining consistent and high-quality accommodations and services; uncertainties regarding the Company's ability to respond to competitive pressures; and uncertainties associated with factors typically affecting the lodging industry, including changes in economic conditions, adverse weather conditions, natural disasters or outbreaks of serious contagious diseases in markets where the Company has a presence.  The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2009 Annual Report on Form 20-F filed with the SEC on April 26, 2010 and is available on the SEC's website at www.sec.gov. For a discussion of other important factors that could adversely affect the Company's business, financial condition, results of operations and prospects, see "Risk Factors" beginning on page 9 of the Company's 2009 Annual Report on Form 20-F. The Company's actual results of operations for the third quarter 2010 are not necessarily indicative of its operating results for any future periods. Any projections in this release are based on limited information currently available to the Company, which is subject to change. Although such projections and the factors influencing them will likely change, the Company will not necessarily update the information. Such information speaks only as of the date of this release.

Statement Regarding Unaudited Financial Information

The financial information set forth above is unaudited and subject to adjustments. Adjustments to the financial statements may be identified when audit work is performed for the year end audit, which could result in significant differences from this preliminary unaudited financial information.

Contacts:

 

 

 

 

Investor Contact:

 

 

Vivian Chen, Investor Relations Senior Manager

 

 

7 Days Group Holdings Limited

 

 

+86-20-8922-5858

 

 

IR@7daysinn.cn

 

 

 

 

Investor Relations (HK):

 

 

Mahmoud Siddig, Managing Director

 

 

Taylor Rafferty

 

 

Tel: +852 3196-3712

 

 

 


Notes:

  1. The Company's reporting currency is Renminbi ("RMB"). The translation of amounts from RMB to United States Dollars is solely for the convenience of the reader. RMB amounts included in this press release have been translated into U.S. dollars at the exchange rate of December 30, 2010 as set forth in the H.10 statistical release of the Federal Reserve Board, which was US$1.00 = RMB6.60. No representation is made that RMB amounts could have been, or could be, converted into U.S. Dollars at that rate or at any other rate on December 30, 2010.
  2. Each ADS represents 3 of the Company's ordinary shares.
  3. RevPAR represents revenue per available room.

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --


 

 

7 Days Group Holdings Limited

 

 

Unaudited consolidated balance sheet information

 

 

 

Dec 31, 2009

 

Sep 30, 2010

 

 

Dec 31, 2010

 

 

 

RMB' 000

 

RMB' 000

 

 

RMB' 000

 

US$'000

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash

 

341,370

 

451,042

 

 

388,795

 

58,908

 

 

Pledged bank deposits

 

5,400

 

1,846

 

 

4,718

 

715

 

 

Short-term investment

 

293,613

 

-

 

 

-

 

-

 

 

Accounts receivable

 

4,557

 

5,984

 

 

6,805

 

1,031

 

 

Prepaid rent

 

64,509

 

123,536

 

 

130,522

 

19,776

 

 

Other prepaid expenses and current assets

 

48,392

 

66,181

 

 

80,373

 

12,178

 

 

Deferred tax assets

 

7,551

 

17,137

 

 

23,001

 

3,485

 

 

Total current assets

 

765,392

 

665,726

 

 

634,214

 

96,093

 

 

Property and equipment, net

 

1,013,500

 

1,237,231

 

 

1,355,554

 

205,387

 

 

Rental deposits

 

38,297

 

50,088

 

 

53,718

 

8,139

 

 

Investment in and advances to an affiliate

 

1,359

 

1,688

 

 

1,588

 

241

 

 

Prepayments in respect of hotel acquisition

 

-

 

7,769

 

 

1,000

 

152

 

 

Land use right

 

-

 

-

 

 

24,662

 

3,736

 

 

Other non-current assets

 

-

 

15,796

 

 

19,630

 

2,974

 

 

Deferred tax assets

 

15,867

 

14,432

 

 

12,876

 

1,951

 

 

Total assets

 

1,834,415

 

1,992,730

 

 

2,103,242

 

318,673

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current liabilities  

 

 

 

 

 

 

 

Accounts payable

 

141,056

 

203,346

 

 

233,770

 

35,420

 

 

Bills payable

 

17,142

 

2,822

 

 

11,692

 

1,772

 

 

Accrued expenses and other payables

 

162,164

 

257,370

 

 

281,050

 

42,583

 

 

Amounts due to related parties

 

162

 

1,593

 

 

-

 

-

 

 

Income taxes payable

 

5,965

 

10,886

 

 

19,603

 

2, 970

 

 

Total current liabilities

 

326,489

 

476,017

 

 

546,115

 

82,745

 

 

Long-term bank borrowings

 

110,000

 

-

 

 

-

 

-

 

 

Borrowings from related parties

 

3,233

 

1,789

 

 

4,279

 

648

 

 

Accrued lease payments

 

116,896

 

148,862

 

 

153,206

 

23,213

 

 

Refundable deposits

 

24,250

 

18,374

 

 

17,950

 

2,720

 

 

Deferred revenue

 

5,046

 

4,531

 

 

1,944

 

294

 

 

Other non-current liabilities

 

-

 

-

 

 

6,446

 

977

 

 

Total liabilities

 

585,914

 

649,573

 

 

729,940

 

110,597

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

Ordinary shares

 

140,377

 

140,525

 

 

140,857

 

21,342

 

 

Additional paid-in capital

 

1,559,458

 

1,567,660

 

 

1,579,391

 

239,302

 

 

Accumulated other comprehensive income

 

30,696

 

20,913

 

 

15,649

 

2,371

 

 

Accumulated deficit

 

(484,925)

 

(389,217)

 

 

(367,234)

 

(55,642)

 

 

Total equity attributable to 7 Days Group Holdings Limited  

 

1,245,606

 

1,339,881

 

 

1,368,663

 

207,373

 

 

Noncontrolling interests

 

2,895

 

3,276

 

 

4,639

 

703

 

 

Total equity  

 

1,248,501

 

1,343,157

 

 

1,373,302

 

208,076

 

 

Total liabilities and equity  

 

1,834,415

 

1,992,730

 

 

2,103,242

 

318,673

 

 

 

 

 

 

 

 

 

 




 

 

7 Days Group Holdings Limited

 

 

Unaudited Consolidated statements of operations information

 

 

 

 

 

Quarter Ended

 

 

Year Ended

 

 

 

Dec 31

 

 

Sep 30

 

 

Dec 31

 

 

Dec 31

 

 

Dec 31

 

 

 

2009

 

 

2010

 

 

2010

 

 

2009

 

 

2010

 

 

 

RMB'000

 

 

RMB'000

 

 

RMB'000

 

US$'000

 

 

RMB'000

 

 

RMB'000

 

US$'000

 

 

Total Revenues

 

329,389

 

 

428,515

 

 

465,008

 

70,456

 

 

1,210,071

 

 

1,587,033

 

240,459

 

 

Leased-and-operated hotels

 

325,999

 

 

397,291

 

 

420,462

 

63,707

 

 

1,201,980

 

 

1,491,022

 

225,912

 

 

Managed hotels

 

3,390

 

 

31,224

 

 

44,546

 

6,749

 

 

8,091

 

 

96,011

 

14,547

 

 

Less: Business tax and surcharges

 

(18,851)

 

 

(23,030)

 

 

(25,945)

 

(3,931)

 

 

(68,756)

 

 

(88,124)

 

(13,352)

 

 

Net revenues

 

310,538

 

 

405,485

 

 

439,063

 

66,525

 

 

1,141,315

 

 

1,498,909

 

227,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating costs

 

(260,186)

 

 

(302,800)

 

 

(345,540)

 

(52,354)

 

 

(971,550)

 

 

(1,182,927)

 

(179,232)

 

 

Sales and marketing expenses

 

(9,338)

 

 

(9,286)

 

 

(16,644)

 

(2,522)

 

 

(30,824)

 

 

(39,557)

 

(5,993)

 

 

General and administrative expenses  

 

(14,173)

 

 

(28,024)

 

 

(44,794)

 

(6,787)

 

 

(65,074)

 

 

(122,371)

 

(18,541)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

(283,697)

 

 

(340,110)

 

 

(406,978)

 

(61,663)

 

 

(1,067,448)

 

 

(1,344,855)

 

(203,766)

 

 

Income from operations

 

26,841

 

 

65,375

 

 

32,085

 

4,862

 

 

73,867

 

 

154,054

 

23,341

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

713

 

 

1,013

 

 

1,319

 

200

 

 

3,669

 

 

3,127

 

474

 

 

Interest expense

 

(18,177)

 

 

(24)

 

 

(256)

 

(39)

 

 

(81,867)

 

 

(2,082)

 

(315)

 

 

Loss on debt extinguishment

 

(26,477)

 

 

-

 

 

-

 

-

 

 

(26,477)

 

 

-

 

-

 

 

Change in fair value of ordinary share purchase warrants

 

(69,957)

 

 

-

 

 

-

 

-

 

 

(76,376)

 

 

-

 

-

 

 

Equity income (loss) of an affiliate

 

(21)

 

 

(2)

 

 

(17)

 

(3)

 

 

23

 

 

(18)

 

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

 

 

Quarter Ended

 

 

Year Ended

 

 

 

Dec 31

 

 

Sep 30

 

 

Dec 31

 

 

Dec 31

 

 

Dec 31

 

 

 

2009

 

 

2010

 

 

2010

 

 

2009

 

 

2010

 

 

 

RMB'000

 

 

RMB'000

 

 

RMB'000

 

US$'000

 

 

RMB'000

 

 

RMB'000

 

US$'000

 

 

Income (loss) before income taxes  

 

(87,078)

 

 

66,362

 

 

33,131

 

5,020

 

 

(107,161)

 

 

155,081

 

23,497

 

 

Income tax benefit (expense)

 

(5,811)

 

 

(6,123)

 

 

(10,904)

 

(1,652)

 

 

4,952

 

 

(35,833)

 

(5,429)

 

 

Net income (loss)

 

(92,889)

 

 

60,239

 

 

22,227

 

3,368

 

 

(102,209)

 

 

119,248

 

18,068

 

 

Net income attributable to noncontrolling interests

 

(498)

 

 

(408)

 

 

(244)

 

(37)

 

 

(1,745)

 

 

(1,557)

 

(236)

 

 

Net income (loss) attributable to 7 Days Group Holdings Limited

 

(93,387)

 

 

59,831

 

 

21,983

 

3,331

 

 

(103,954)

 

 

117,691

 

17,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per ordinary share

 

(1.28)

 

 

0.40

 

 

0.15

 

0.02

 

 

(1.93)

 

 

0.79

 

0.12

 

 

 Diluted earnings (loss) per ordinary share

 

(1.28)

 

 

0.40

 

 

0.15

 

0.02

 

 

(1.93)

 

 

0.78

 

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

 

7 Days Group Holdings Limited

 

 

Reconciliation of GAAP and Non-GAAP Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (non-GAAP)

 

Quarter Ended

 

 

Year Ended

 

 

 

Dec 31

 

 

Sep 30

 

 

Dec 31

 

 

Dec 31

 

 

Dec 31

 

 

 

2009

 

 

2010

 

 

2010

 

 

2009

 

 

2010

 

 

 

RMB'000

 

 

RMB'000

 

 

RMB'000

 

US$'000

 

 

RMB'000

 

 

RMB'000

 

US$'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to 7 Days Group Holdings Limited

 

(93,387)

 

 

59,831

 

 

21,983

 

3,331

 

 

(103,954)

 

 

117,691

 

17,832

 

 

Interest income

 

(713)

 

 

(1,013)

 

 

(1,319)

 

(200)

 

 

(3,669)

 

 

(3,127)

 

(474)

 

 

Interest expense

 

18,177

 

 

24

 

 

256

 

39

 

 

81,867

 

 

2,082

 

315

 

 

Income tax expense

 

5,811

 

 

6,123

 

 

10,904

 

1,652

 

 

(4,952)

 

 

35,833

 

5,429

 

 

Depreciation and amortization

 

40,000

 

 

46,089

 

 

52,891

 

8,014

 

 

146,173

 

 

180,814

 

27,396

 

 

EBITDA (non-GAAP)

 

(30,112)

 

 

111,054

 

 

84,715

 

12,836

 

 

115,465

 

 

333,293

 

50,498

 

 

EBITDA%

 

(9.7%)

 

 

27.4%

 

 

19.3%

 

19.3%

 

 

10.1%

 

 

22.2%

 

22.2%

 

 

Share-based compensation expenses

 

2,781

 

 

1,825

 

 

8,993

 

1,363

 

 

11,412

 

 

15,517

 

2,351

 

 

Loss on debt extinguishment

 

26,477

 

 

-

 

 

-

 

-

 

 

26,477

 

 

-

 

-

 

 

Change in fair value of ordinary share purchase warrants

 

69,957

 

 

-

 

 

-

 

-

 

 

76,376

 

 

-

 

-

 

 

Adjusted EBITDA (non- GAAP) excluding share-based compensation expense and change in fair value of ordinary share purchase warrants

 

69,103

 

 

112,879

 

 

93,708

 

14,198

 

 

229,730

 

 

348,810

 

52,849

 

 

Adjusted EBITDA%

 

22.3%

 

 

27.8%

 

 

21.3%

 

21.3%

 

 

20.1%

 

 

23.3%

 

23.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Non-GAAP net income attributable to 7 Days Group Holdings Limited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

Year Ended

 

 

 

Dec 31

 

 

Sep 30

 

 

Dec 31

 

 

Dec 31

 

 

Dec 31

 

 

 

2009

 

 

2010

 

 

2010

 

 

2009

 

 

2010

 

 

 

RMB'000

 

 

RMB'000

 

 

RMB'000

 

US$'000

 

 

RMB'000

 

 

RMB'000

 

US$'000

 

 

Net income attributable to 7 Days Group Holdings Limited (GAAP)

 

(93,387)

 

 

59,831

 

 

21,983

 

3,331

 

 

(103,954)

 

 

117,691

 

17,832

 

 

Share-based compensation expenses

 

2,781

 

 

1,825

 

 

8,993

 

1,363

 

 

11,412

 

 

15,517

 

2,351

 

 

Loss on debt extinguishment

 

26,477

 

 

-

 

 

-

 

-

 

 

26,477

 

 

-

 

-

 

 

Change in fair value of ordinary share purchase warrants

 

69,957

 

 

-

 

 

-

 

-

 

 

76,376

 

 

-

 

-

 

 

Net income attributable to 7 Days Group Holdings Limited excluding share-based compensation expense and change in fair value of ordinary share purchase warrants (Non GAAP net income)

 

5,828

 

 

61,656

 

 

30,976

 

4,694

 

 

10,311

 

 

133,208

 

20,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

 

    Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

Year Ended

 

 

 

Dec 31

2009

 

 

Sep 30

2010

 

 

Dec 31

2010

 

 

Dec 31

2009

 

 

Dec 31

2010

 

 

 

RMB

 

 

RMB

 

 

RMB

 

US$

 

 

RMB

 

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per ordinary share (GAAP)

 

(1.28)

 

 

0.40

 

 

0.15

 

0.02

 

 

(1.93)

 

 

0.79

 

0.12

 

 

Diluted earnings per ordinary share (GAAP)

 

(1.28)

 

 

0.40

 

 

0.15

 

0.02

 

 

(1.93)

 

 

0.78

 

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per ordinary share(Non-GAAP), excluding share-based compensation expense and change in fair value of ordinary share purchase warrants

 

0.06

 

 

0.41

 

 

0.21

 

0.03

 

 

0.15

 

 

0.89

 

0.13

 

 

Diluted earnings per ordinary share(Non-GAAP), excluding share-based compensation expense and change in fair value of ordinary share purchase warrants

 

0.06

 

 

0.41

 

 

0.20

 

0.03

 

 

0.15

 

 

0.89

 

0.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of ordinary shares

 

95,883,725

 

 

149,146,501

 

 

149,388,775

 

 

 

69,044,665

 

 

149,169,106

 

 

 

Diluted weighted average number of ordinary shares

 

97,259,150

 

 

150,412,711

 

 

151,566,823

 

 

 

70,420,089

 

 

150,366,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

 

 

Quarter Ended

 

Year Ended

 

 

 

Dec 31

2009

 

Sep 30

2010

 

Dec 31

2010

 

Dec 31

2009

 

Dec 31

2010

 

 

 

RMB'000

 

RMB'000

 

RMB'000

 

USD'000

 

RMB'000

 

RMB'000

 

USD'000

 

 

 

 

 

 

 

 

 

 

 

Hotel operating costs

 

 

 

 

 

 

 

 

 

GAAP Result

 

(260,186)

 

(302,800)

 

(345,540)

 

(52,354)

 

(971,550)

 

(1,182,927)

 

(179,232)

 

 

% of Total net Revenue

 

83.79%

 

74.68%

 

78.70%

 

78.70%

 

85.13%

 

78.92%

 

78.92%

 

 

Share-based Compensation

 

541

 

383

 

566

 

86

 

1,795

 

2,018

 

306

 

 

% of Total net Revenue

 

0.17%

 

0.09%

 

0.13%

 

0.13%

 

0.16%

 

0.13%

 

0.13%

 

 

Non-GAAP Result

 

(259,645)

 

(302,417)

 

(344,974)

 

(52,268)

 

(969,755)

 

(1,180,909)

 

(178,926)

 

 

% of Total net Revenue

 

83.61%

 

74.58%

 

78.57%

 

78.57%

 

84.97%

 

78.78%

 

78.78%

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing expenses

 

 

 

 

 

 

 

 

 

GAAP Result

 

(9,338)

 

(9,286)

 

(16,644)

 

(2,522)

 

(30,824)

 

(39,557)

 

(5,993)

 

 

% of Total net Revenue

 

3.01%

 

2.29%

 

3.79%

 

3.79%

 

2.70%

 

2.64%

 

2.64%

 

 

Share-based Compensation

 

158

 

16

 

45

 

7

 

678

 

267

 

40

 

 

% of Total net Revenue

 

0.05%

 

0.00%

 

0.01%

 

0.01%

 

0.06%

 

0.02%

 

0.02%

 

 

Non-GAAP Result

 

(9,180)

 

(9,270)

 

(16,599)

 

(2,515)

 

(30,146)

 

(39,290)

 

(5,953)

 

 

% of Total net Revenue

 

2.96%

 

2.29%

 

3.78%

 

3.78%

 

2.64%

 

2.62%

 

2.62%

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

 

 

 

 

 

 

 

GAAP Result

 

(14,173)

 

(28,024)

 

(44,794)

 

(6,787)

 

(65,074)

 

(122,371)

 

(18,541)

 

 

% of Total net Revenue

 

4.56%

 

6.91%

 

10.20%

 

10.20%

 

5.70%

 

8.16%

 

8.16%

 

 

Share-based Compensation

 

2,082

 

1,426

 

8,382

 

1,270

 

8,939

 

13,232

 

2,005

 

 

% of Total net Revenue

 

0.67%

 

0.35%

 

1.91%

 

1.91%

 

0.78%

 

0.88%

 

0.88%

 

 

Non-GAAP Result

 

(12,091)

 

(26,598)

 

(36,412)

 

(5,517)

 

(56,135)

 

(109,139)

 

(16,536)

 

 

% of Total net Revenue

 

3.89%

 

6.56%

 

8.29%

 

8.29%

 

4.92%

 

7.28%

 

7.28%

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

 

 

 

 

 

 

 

 

GAAP Result

 

(283,697)

 

(340,110)

 

(406,978)

 

(61,663)

 

(1,067,448)

 

(1,344,855)

 

(203,766)

 

 

% of Total net Revenue

 

91.36%

 

83.88%

 

92.69%

 

92.69%

 

93.53%

 

89.72%

 

89.72%

 

 

Share-based Compensation

 

2,781

 

1,825

 

8,993

 

1,363

 

11,412

 

15,517

 

2,351

 

 

% of Total net Revenue

 

0.90%

 

0.45%

 

2.05%

 

2.05%

 

1.00%

 

1.04%

 

1.04%

 

 

Non-GAAP Result

 

(280,916)

 

(338,285)

 

(397,985)

 

(60,300)

 

(1,056,036)

 

(1,329,338)

 

(201,415)

 

 

% of Total net Revenue

 

90.46%

 

83.43%

 

90.64%

 

90.64%

 

92.53%

 

88.69%

 

88.69%

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

 

 

 

 

 

 

GAAP Result

 

26,841

 

65,375

 

32,085

 

4,862

 

73,867

 

154,054

 

23,341

 

 

% of Total net Revenue

 

8.64%

 

16.12%

 

7.31%

 

7.31%

 

6.47%

 

10.28%

 

10.28%

 

 

Share-based Compensation

 

2,781

 

1,825

 

8,993

 

1,363

 

11,412

 

15,517

 

2,351

 

 

% of Total net Revenue

 

0.90%

 

0.45%

 

2.05%

 

2.05%

 

1.00%

 

1.04%

 

1.04%

 

 

Non-GAAP Result

 

29,622

 

67,200

 

41,078

 

6,225

 

85,279

 

169,571

 

25,692

 

 

% of Total net Revenue

 

9.54%

 

16.57%

 

9.36%

 

9.36%

 

7.47%

 

11.31%

 

11.31%

 

 

 

 

 

 

 

 

 

 

 

 




 

 

7 Days Group Holdings Limited

 

 

Operating Data

 

 

 

As of and for the

Quarter Ended

 

As of and for the Year Ended

 

 

 

Dec 31

 

Sep 30

 

Dec 31

 

Dec 31

 

Dec 31

 

 

 

2009

 

2010

 

2010

 

2009

 

2010

 

 

 

 

 

 

 

 

 

Hotels in operation

 

337

 

461

 

568

 

337

 

568

 

 

  Leased-and-operated hotels

 

236

 

281

 

321

 

236

 

321

 

 

  Managed hotels

 

101

 

180

 

247

 

101

 

247

 

 

Hotels under conversion

 

64

 

201

 

197

 

64

 

197

 

 

  Leased-and-operated hotels

 

6

 

51

 

25

 

6

 

25

 

 

  Managed hotels

 

58

 

150

 

172

 

58

 

172

 

 

Total hotel rooms for hotels in operation

 

32,836

 

46,293

 

56,410

 

32,836

 

56,410

 

 

  Leased-and-operated hotels

 

23,764

 

28,986

 

32,825

 

23,764

 

32,825

 

 

  Managed hotels

 

9,072

 

17,307

 

23,585

 

9,072

 

23,585

 

 

Total hotel rooms for hotels under conversion

 

6,168

 

19,578

 

19,345

 

6,168

 

19,345

 

 

 

 

 

 

 

 

 

Number of cities covered for hotels in operation

 

54

 

75

 

89

 

54

 

89

 

 

 

 

 

 

 

 

 

Occupancy rate

 

88.1%

 

92.2%

 

83.9%

 

88.3%

 

88.7%

 

 

  Leased-and-operated hotels

 

90.0%

 

93.7%

 

86.2%

 

89.2%

 

91.0%

 

 

  Managed hotels

 

80.0%

 

89.3%

 

80.4%

 

82.8%

 

84.0%

 

 

Average daily rate (in RMB)

 

162.9

 

166.5

 

162.4

 

159.6

 

162.3

 

 

 Leased-and-operated hotels

 

164.2

 

167.9

 

166.5

 

160.0

 

164.9

 

 

 Managed hotels

 

156.6

 

163.6

 

155.4

 

156.2

 

156.7

 

 

RevPAR (in RMB)

 

143.4

 

153.5

 

136.3

 

140.9

 

143.9

 

 

 Leased-and-operated hotels

 

147.8

 

157.3

 

143.4

 

142.7

 

150.0

 

 

 Managed hotels

 

125.3

 

146.2

 

124.9

 

129.3

 

131.6

 

 

Overnight occupancy rates

 

84.9%

 

88.8%

 

81.6%

 

84.8%

 

85.5%

 

 

 Leased-and-operated hotels

 

86.8%

 

90.3%

 

83.8%

 

85.6%

 

87.8%

 

 

 Managed hotels

 

77.2%

 

86.1%

 

78.0%

 

79.4%

 

81.1%

 

 

 
Source: 7 Days Group Holdings Limited
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