GUANGZHOU, China, November 10, 2011 /PRNewswire/ --
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 third quarter of 2011.
Third Quarter 2011 Financial Highlights
Third Quarter 2011 Operational Highlights(4)
(1) As announced on July 1, 2011, 7 Days Group reached an agreement to acquire 100% ownership of 21 leased-and-operated hotels from Hunan Huatian Star Hotel Management Limited ("Huatian Star"). As Huatian Star is a state-owned company, the completion of the transaction is required to follow specific legal procedures, which are still in progress. The Company expects the transaction to close in the near future. However, 7 Days Group has already taken operational responsibilities over the 21 leased-and-operated hotels and completed the conversion process for the majority of properties. 7 Days Group has therefore included the pertinent net costs from the Huatian Star hotels in its third quarter 2011 income statement as "other hotel operating costs."
(2) 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 September 30, 2011 as set forth in the H.10 statistical release of the Federal Reserve Board, which was US$1.00 = RMB6.3780. 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 September 30, 2011.
(3) Each ADS represents 3 of the Company's ordinary shares.
(4) Operational data did not include any impact from Huatian Star
(5) RevPAR represents revenue per available room
Recent Business Developments:
Mr. Alex Nanyan Zheng, 7 Days Group's Chief Executive Officer and Director, commented, "We delivered healthy results in the third quarter, and net revenue excluding Huatian Star exceeded our guidance. The continued expansion of our hotel base throughout 2011, both in terms of the number of hotels and our geographic reach, has fueled our top-line performance and provides us with a strong platform to deliver long-term growth. Looking ahead, we still see significant market opportunity in the economy hotel segment. With our unique competitive edge, we expect to open 120 net new leased-and-operated hotels and 240 managed hotels in 2012. We remain committed to executing our expansion strategy and believe that we are well positioned to deliver further growth and development in the year ahead."
Mr. Eric Haibing Wu, 7 Days Group's Chief Financial Officer, added, "Our underlying financial performance for the third quarter remained strong. Going forward, we will keep expanding our hotel network and further leverage economies of scales and streamline costs to deliver sustainable growth and improve profitability."
Third Quarter 2011 Unaudited Financial Results
Gross revenues. Gross revenues for the third quarter of 2011 were RMB574.0 million (US$90.0 million), representing a year-over-year increase of 33.9% from RMB428.5 million in the third quarter of 2010 and an increase of 8.7% from RMB528.1 million in the second quarter of 2011.
Gross revenues from leased-and-operated hotels. Gross revenues from leased-and-operated hotels for the third quarter of 2011 were RMB516.0 million (US$80.9 million), representing a 29.9% increase from RMB397.3 million in the third quarter of 2010 and an increase of 7.9% from RMB478.2 million in the second quarter of 2011.
Gross revenues from managed hotels. Gross revenues from managed hotels for the third quarter of 2011 increased by 85.8% from RMB31.2 million to RMB58.0 million (US$9.1 million) compared to the same period in the fiscal year 2010 and increased by 16.4% from RMB49.9 million in the second quarter of 2011. During the third quarter of 2011, the Company opened 93 net managed hotels.
Total net revenues. Total net revenues for the third quarter of 2011 were RMB540.0 million (US$84.7 million), representing a year-over-year increase of 33.2% from RMB405.5 million in third quarter of 2010 and a quarter-over-quarter increase of 8.6% from RMB497.1 million in the second quarter of 2011, primarily resulting from the continued growth in the number of hotels in operation.
Hotel operating costs. Hotel operating costs for the third quarter of 2011 were RMB426.1 million (US$66.8 million), or 78.9% of total net revenues. Excluding the impact of Huatian Star, hotel operating costs for the quarter were RMB417.2 million (US$65.4 million), or 77.3% of total net revenues, compared with 77.0% of total net revenues in the second quarter of 2011 and 74.7% of total net revenues in the third quarter of 2010, respectively.
Sales and marketing expenses. Sales and marketing expenses for the third quarter of 2011 were RMB10.3 million (US$1.6 million), or 1.9% of total net revenues, compared with 2.3% of total net revenues in the same period of 2010 and 1.8% in the second quarter of 2011, respectively.
General and administrative expenses. General and administrative expenses for the third quarter of 2011 were RMB50.7 million (US$8.0 million), or 9.4% of total net revenues, compared to RMB28.0 million, or 6.9% of total net revenues in the same period of 2010, and RMB49.3 million, or 9.9% of total net revenues in the second quarter of 2011, respectively. The year-over-year increase in general and administrative expenses was a result of increased share-based compensation expenses and impairment expenses. General and administrative expenses excluding share-based compensation expenses (non-GAAP) were RMB39.7 million (US$6.2 million), or 7.3% of the total net revenues, compared to 6.6% of the total net revenues in the same period of 2010 and 7.8% in the previous quarter, respectively.
Accordingly, total operating costs and expenses was RMB487.1 million (US$76.4 million), representing 90.2% of total net revenues, compared to 83.9% of total net revenues in the same period of 2010 and 88.7% in the second quarter of 2011, respectively. Excluding the impact of Huatian Star, total operating costs and expenses for the quarter was RMB478.2 million (US$75.0 million), or 88.6% of total net revenues.
Income from operations. Income from operations for the third quarter of 2011 was RMB52.9 million (US$8.3 million), compared to RMB65.4 million in the third quarter of 2010 and RMB55.9 million in the second quarter of 2011, respectively. Excluding the impact of Huatian Star, income from operations for the quarter was RMB61.7 million (US$9.7 million). Non-GAAP income from operations was RMB65.0 million (US$10.2 million), compared to RMB67.2 million for the same period of 2010 and RMB67.0 million in the second quarter of 2011, respectively. Excluding the impact of Huatian Star, non-GAAP income from operations for the quarter was RMB73.8 million (US$11.6 million).
EBITDA. Excluding the impact of Huatian Star, EBITDA for the third quarter was RMB132.8 million (US$20.8 million), an increase of 19.6% year-over-year and 13.3% quarter-over-quarter from RMB111.1 million for the same period in 2010 and RMB117.2 million in the second quarter of 2011, respectively. Excluding the impact of Huatian Star, adjusted EBITDA for the quarter was RMB144.9 million (US$22.7 million) an increase of 28.4% year-over-year and 13.0% quarter-over-quarter. EBITDA margin was 24.6% compared to 27.4% in the same period in the fiscal year 2010. Adjusted EBITDA margin was 26.8% compared to 27.8% in the prior year period. Including Huatian Star, EBITDA for the third quarter was RMB124.0 million (US$19.4 million), adjusted EBITDA was RMB136.1 million (US$21.3 million), and adjusted EBITDA margin was 25.2%.
Interest expense. Interest expense for the third quarter of 2011 was RMB2.0 million, (US$0.3 million) compared to RMB0.02 million for the same period of 2010 and RMB0.4 million in the second quarter of 2011, respectively.
Income tax expense. Income tax expense for the third quarter of 2011 was RMB14.8 million (US$2.3 million), compared to RMB6.1 million in the same period of 2010 and RMB15.6 million in the second quarter of 2011, respectively.
Net income attributable to 7 Days Group Holdings Limited ordinary shareholders. Net income attributable to 7 Days Group Holdings Limited ordinary shareholders was RMB44.3 million (US$6.9 million) in the third quarter of 2011, compared to RMB59.8 million in the third quarter of 2010 and RMB45.1 million in the second quarter of 2011. Excluding the impact of Huatian Star, net income for the quarter was RMB53.1 million (US$8.3 million).
Non-GAAP net income. Non-GAAP net income was RMB56.4 million (US$8.8 million), compared to Non-GAAP net income of RMB61.7 million for the same quarter of 2010 and Non-GAAP net income of RMB56.1 million in the second quarter of 2011. Excluding the impact of Huatian Star, non-GAAP net income for the quarter was RMB65.2 million (US$10.2 million), representing a year-over-year increase of 5.7% and a quarter-over-quarter increase of 16.2%, respectively.
Basic and diluted earnings per ADS. Basic and diluted earnings per ADS were RMB0.89 (US$0.14) and RMB0.88 (US$0.14), respectively, for the third quarter of 2011, compared to basic and diluted earnings per ADS of RMB1.20 and RMB1.19, respectively, for the same period of 2010 and the basic and diluted earnings per ADS of RMB0.90 and RMB0.89 respectively in the second quarter of 2011. Non-GAAP basic and diluted earnings per ADS were RMB1.13 (US$0.18) and RMB1.12 (US$0.18), respectively, for the third quarter of 2011, compared to non-GAAP basic and diluted earnings per ADS of RMB1.24 and RMB1.23, respectively, in the same period of 2010 and basic and diluted earnings per ADS of RMB1.12 and RMB1.11, respectively, in the second quarter of 2011.
Cash and pledged bank deposits. As of September 30, 2011, the Company had cash and pledged bank deposits of RMB397.3 million (US$62.3 million), representing a quarter-over-quarter increase of 21.8% from RMB326.3 million as of June 30, 2011 and a year-over-year decrease of 12.3% from RMB452.9 million as of September 30, 2010, respectively, reflecting primarily the use of cash in expanding the leased and operating hotels.
Operating cash flow. Net operating cash inflow for the third quarter of 2011 was RMB121.1 million (US$19.0 million), representing an increase of 24.9% from RMB97.0 million in the third quarter of 2010.
Guidance
The Company expects to generate total net revenues in the range of RMB530 million to RMB540 million in the fourth quarter of 2011.
For the full year 2012, the Company expects to open 120 new leased-and-operated hotels and 240 new managed hotels. 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) Wednesday, November 9, 2011, which is 9:00 am (Beijing) on Thursday, November 10, 2011 to discuss its third quarter 2011 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 5194004 | |
US New York: | 1 718 354 1231 | |
International: | 65 6723 9381 | |
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: | 1877 0868 | |
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.
-- 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.
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. The Company prepares its financial statements in accordance with GAAP and, accordingly, expenses its employee share options. Since share-based compensation expenses 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 expenses 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 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
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the 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 and including, among other things, 7 Days Group's revenue guidance for the fourth quarter of 2011 and business forecast for 2012 including the expected number of hotel to be opened, and statements regarding the expected completion of the acquisition of Huatian Star hotels, Company's business strategies, its ability to leverage economies of scale and its ability to achieve strict cost controls and to deliver continued 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: 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; uncertainties regarding the Company's ability to respond to competitive pressures; uncertainties regarding the Company's ability to manage its expected growth; uncertainties regarding the Company's ability to continue its growth and achieve profitability; risks associated with the Company's limited operating history and historical operating losses; uncertainties regarding the Company's ability to fund its working capital needs; uncertainties regarding its ability to successfully and timely identify, secure or operate additional hotel properties. 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 2010 Annual Report on Form 20-F filed with the SEC on May 4, 2011 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 7 of the Company's 2010 Annual Report on Form 20-F. The Company's actual results of operations for the third quarter of 2011 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 be changed, 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 the year-end closing is performed, which could result in significant differences from this unaudited financial information.
Contacts:
Investor Contact:
Vivian Chen, Investor Relations Director
7 Days Group Holdings Limited
+86-20-8922-5858
Investor Relations (HK):
Mahmoud Siddig, Managing Director
Taylor Rafferty
Tel: +852 3196-3712
Investor Relations (US):
Kelly Gawlik, Director
Taylor Rafferty
+1 (212) 889-4350
-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --
7 Days Group Holdings Limited | |||||||
Consolidated balance sheet information | |||||||
Quarter Ended | |||||||
30/Sep/10 | 30/Jun/11 | 30/Sep/11 | |||||
RMB' 000 | RMB' 000 | RMB' 000 | US$'000 | ||||
ASSETS | |||||||
Current assets: | |||||||
Cash | 451,042 | 320,133 | 394,404 | 61,838 | |||
Pledged bank deposits | 1,846 | 6,167 | 2,938 | 461 | |||
Accounts receivable | 5,984 | 5,194 | 8,289 | 1,300 | |||
Prepaid rent | 123,536 | 158,604 | 174,235 | 27,318 | |||
Other prepaid expenses and current assets | 66,181 | 54,266 | 86,103 | 13,500 | |||
Hotel supplies | - | 39,761 | 42,655 | 6,688 | |||
Deferred tax assets | 17,137 | 21,795 | 24,799 | 3,888 | |||
Total current assets | 665,726 | 605,920 | 733,423 | 114,993 | |||
Property and equipment, net | 1,237,231 | 1,458,256 | 1,573,101 | 246,645 | |||
Rental deposits | 50,088 | 60,091 | 66,130 | 10,368 | |||
Investment in and advances to an affiliate | 1,688 | - | - | - | |||
Land use right | - | 24,353 | 24,198 | 3,794 | |||
Prepaid rent | 15,796 | 18,597 | 24,349 | 3,818 | |||
Intangible assets, net | - | 1,504 | 842 | 132 | |||
Goodwill | - | 694 | 694 | 109 | |||
Prepayments in respect of hotel acquisition | 7,769 | 13,000 | 70,000 | 10,975 | |||
Deferred tax assets | 14,432 | 24,239 | 28,507 | 4,470 | |||
Total assets | 1,992,730 | 2,206,654 | 2,521,244 | 395,304 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | 203,346 | 192,556 | 216,475 | 33,941 | |||
Bills payable | 2,822 | 20,590 | 9,463 | 1,484 | |||
Short-term bank borrowings | - | 18,000 | 184,993 | 29,005 | |||
Accrued expenses and other payables | 257,370 | 303,629 | 378,683 | 59,373 | |||
Amounts due to related parties | 1,593 | - | - | - | |||
Income taxes payable | 10,886 | 31,217 | 33,367 | 5,232 | |||
Total current liabilities | 476,017 | 565,992 | 822,981 | 129,035 | |||
Accrued lease payments | 148,862 | 177,060 | 189,644 | 29,734 | |||
Refundable deposits | 18,374 | 17,050 | 16,450 | 2,579 | |||
Deferred revenue | 4,531 | 1,490 | 1,276 | 200 | |||
Deferred rebate income | - | 6,520 | 6,218 | 975 | |||
Borrowings from related parties | 1,789 | 2,075 | 1,511 | 237 | |||
Deferred tax liability | - | 1,233 | 2,876 | 451 | |||
Total liabilities | 649,573 | 771,420 | 1,040,956 | 163,211 | |||
Equity: | |||||||
Ordinary shares | 140,525 | 140,995 | 141,070 | 22,118 | |||
Additional paid-in capital | 1,567,660 | 1,601,658 | 1,615,090 | 253,228 | |||
Accumulated other comprehensive income | 20,913 | 7,555 | 3,191 | 500 | |||
Accumulated deficit | (389,217) | (317,838) | (273,567) | (42,891) | |||
Total 7 Days Group Holdings Limited share holders' equity | 1,339,881 | 1,432,370 | 1,485,784 | 232,955 | |||
Non-controlling interests | 3,276 | 2,864 | (5,496) | (862) | |||
Total equity | 1,343,157 | 1,435,234 | 1,480,288 | 232,093 | |||
Total liabilities and equity | 1,992,730 | 2,206,654 | 2,521,244 | 395,304 | |||
7 Days Group Holdings Limited Unaudited Consolidated Statements of Operations Information | ||||||||
Quarter Ended | ||||||||
Sep 30 | Jun 30 | Sep 30 | ||||||
2010 | 2011 | 2011 | ||||||
RMB'000 | RMB'000 | RMB'000 | US$'000 | |||||
Total Revenues | 428,515 | 528,097 | 573,990 | 89,995 | ||||
Leased-and-operated hotels | 397,291 | 478,235 | 515,972 | 80,898 | ||||
Managed hotels | 31,224 | 49,862 | 58,018 | 9,097 | ||||
Less: Business tax and surcharges | (23,030) | (30,982) | (34,021) | (5,334) | ||||
Net revenues | 405,485 | 497,115 | 539,969 | 84,661 | ||||
Operating costs and expenses | ||||||||
Hotel operating costs | (302,800) | (382,732) | (426,058) | (66,801) | ||||
Rental expenses | (117,133) | (139,711) | (148,240) | (23,242) | ||||
Staff cost | (57,405) | (79,517) | (81,835) | (12,831) | ||||
Depreciation and amortization | (45,417) | (56,712) | (62,765) | (9,841) | ||||
Hotel supplies | (15,006) | (23,167) | (24,455) | (3,834) | ||||
Utilities | (29,330) | (29,801) | (36,889) | (5,784) | ||||
Other | (38,509) | (53,824) | (71,874) | (11,269) | ||||
Sales and marketing expenses | (9,286) | (9,196) | (10,330) | (1,620) | ||||
General and administrative expenses | (28,024) | (49,252) | (50,677) | (7,946) | ||||
Total operating costs and expenses | (340,110) | (441,180) | (487,065) | (76,367) | ||||
Income from operations | 65,375 | 55,935 | 52,904 | 8,294 | ||||
Other income (expenses) | ||||||||
Interest income | 1,013 | 1,722 | 1,161 | 182 | ||||
Interest expense | (24) | (353) | (1,969) | (309) | ||||
Equity income(loss) of an affiliate | (2) | 130 | - | - | ||||
Income before income tax | 66,362 | 57,434 | 52,096 | 8,167 | ||||
Income tax expenses | (6,123) | (15,593) | (14,765) | (2,315) | ||||
Net income | 60,239 | 41,841 | 37,331 | 5,852 | ||||
Net loss (income) attributable to non-controlling interest | (408) | 3,215 | 6,940 | 1,088 | ||||
Net income attributable to 7 Days Group Holdings Limited ordinary shareholders | 59,831 | 45,056 | 44,271 | 6,940 | ||||
Basic earnings per ordinary share | 0.40 | 0.30 | 0.30 | 0.05 | ||||
Diluted earnings per ordinary share | 0.40 | 0.30 | 0.29 | 0.05 | ||||
7 Days Group Holdings Limited Reconciliation of GAAP and Non-GAAP Results | ||||||||
EBITDA(non-GAAP) | ||||||||
Quarter Ended | ||||||||
Sep 30 | Jun 30 | Sep 30 | ||||||
2010 | 2011 | 2011 | ||||||
RMB'000 | RMB'000 | RMB'000 | US$'000 | |||||
Net income attributable to 7 Days Group Holdings Limited ordinary shareholders | 59,831 | 45,056 | 44,271 | 6,940 | ||||
Interest income | (1,013) | (1,722) | (1,161) | (182) | ||||
Interest expense | 24 | 353 | 1,969 | 309 | ||||
Income tax expense | 6,123 | 15,593 | 14,765 | 2,315 | ||||
Depreciation and amortization | 46,089 | 57,956 | 64,146 | 10,057 | ||||
EBITDA (non-GAAP) | 111,054 | 117,236 | 123,990 | 19,439 | ||||
EBITDA% | 27.4% | 23.6% | 23.0% | 23.0% | ||||
Share-based compensation expenses | 1,825 | 11,049 | 12,085 | 1,895 | ||||
Adjusted EBITDA (non- GAAP) excluding share-based compensation expense | 112,879 | 128,285 | 136,075 | 21,334 | ||||
Adjusted EBITDA% | 27.8% | 25.8% | 25.2% | 25.2% | ||||
Non-GAAP net income attributable to 7 Days Group Holdings Limited ordinary shareholders | ||||||||
Quarter Ended | ||||||||
Sep 30 | Jun 30 | Sep 30 | ||||||
2010 | 2011 | 2011 | ||||||
RMB'000 | RMB'000 | RMB'000 | US$'000 | |||||
Net income attributable to 7 Days Group Holdings Limited ordinary shareholders (GAAP) | 59,831 | 45,056 | 44,271 | 6,940 | ||||
Share-based compensation expenses | 1,825 | 11,049 | 12,085 | 1,895 | ||||
Net income attributable to ordinary shareholders excluding share-based compensation expense (Non GAAP net income) | 61,656 | 56,105 | 56,356 | 8,835 | ||||
Earnings per share | |||||||||
Quarter Ended | |||||||||
Sep 30 | Jun 30 | Sep 30 | |||||||
2010 | 2011 | 2011 | |||||||
RMB | RMB | RMB | USD | ||||||
Basic earnings per ordinary share (GAAP) | 0.40 | 0.30 | 0.30 | 0.05 | |||||
Diluted earnings per ordinary share (GAAP) | 0.40 | 0.30 | 0.29 | 0.05 | |||||
Basic earnings per ordinary share(Non-GAAP), excluding share-based compensation expense | 0.41 | 0.37 | 0.38 | 0.06 | |||||
Diluted earnings per ordinary share(Non-GAAP), excluding share-based compensation expense | 0.41 | 0.37 | 0.37 | 0.06 | |||||
Denominator: | |||||||||
Basic weighted average number of ordinary shares | 149,146,501 | 149,757,234 | 149,889,728 | ||||||
Diluted weighted average number of ordinary shares | 150,412,711 | 151,412,116 | 151,322,024 | ||||||
Quarter Ended | |||||||
30-Sep-10 | 30-Jun-11 | 30-Sep-11 | |||||
RMB '000 | RMB '000 | RMB'000 | USD'000 | ||||
Hotel operating cost | |||||||
GAAP Result | (302,800) | (382,732) | (426,058) | (66,801) | |||
% of Total net revenue | 74.68% | 76.99% | 78.90% | 78.90% | |||
Share-based Compensation | 383 | 678 | 672 | 105 | |||
% of Total net revenue | 0.09% | 0.14% | 0.12% | 0.12% | |||
Non-GAAP Result | (302,417) | (382,054) | (425,386) | (66,696) | |||
% of Total net revenue | 74.58% | 76.85% | 78.78% | 78.78% | |||
Sales and marketing expenses | |||||||
GAAP Result | (9,286) | (9,196) | (10,330) | (1,620) | |||
% of Total net revenue | 2.29% | 1.85% | 1.91% | 1.91% | |||
Share-based Compensation | 16 | 18 | 410 | 64 | |||
% of Total net revenue | 0.00% | 0.00% | 0.08% | 0.08% | |||
Non-GAAP Result | (9,270) | (9,178) | (9,920) | (1,556) | |||
% of Total net revenue | 2.29% | 1.85% | 1.84% | 1.84% | |||
General and administrative expenses | |||||||
GAAP Result | (28,024) | (49,252) | (50,677) | (7,946) | |||
% of Total net revenue | 6.91% | 9.91% | 9.39% | 9.39% | |||
Share-based Compensation | 1,426 | 10,353 | 11,003 | 1,725 | |||
% of Total net revenue | 0.35% | 2.08% | 2.04% | 2.04% | |||
Non-GAAP Result | (26,598) | (38,899) | (39,674) | (6,221) | |||
% of Total net revenue | 6.56% | 7.82% | 7.35% | 7.35% | |||
Total operating cost and expenses | |||||||
GAAP Result | (340,110) | (441,180) | (487,065) | (76,367) | |||
% of Total net revenue | 83.88% | 88.75% | 90.20% | 90.20% | |||
Share-based Compensation | 1,825 | 11,049 | 12,085 | 1,895 | |||
% of Total net revenue | 0.45% | 2.22% | 2.24% | 2.24% | |||
Non-GAAP Result | (338,285) | (430,131) | (474,980) | (74,472) | |||
% of Total net revenue | 83.43% | 86.53% | 87.96% | 87.96% | |||
Income from operations | |||||||
GAAP Result | 65,375 | 55,935 | 52,904 | 8,294 | |||
% of Total net revenue | 16.12% | 11.25% | 9.80% | 9.80% | |||
Share-based Compensation | 1,825 | 11,049 | 12,085 | 1,895 | |||
% of Total net revenue | 0.45% | 2.22% | 2.24% | 2.24% | |||
Non-GAAP Result | 67,200 | 66,984 | 64,989 | 10,189 | |||
% of Total net revenue | 16.57% | 13.47% | 12.04% | 12.04% | |||
7 Days Group Holdings Limited Operating Data(Excluding Huatian Star) | |||||
As of and for the Quarter Ended | |||||
Sep 30 | Jun 30 | Sep 30 | |||
2010 | 2011 | 2011 | |||
Hotels in operation | 461 | 722 | 838 | ||
Leased-and-operated hotels | 281 | 341 | 364 | ||
Managed hotels | 180 | 381 | 474 | ||
Hotels under conversion | 201 | 241 | 251 | ||
Leased-and-operated hotels | 51 | 43 | 43 | ||
Managed hotels | 150 | 198 | 208 | ||
Total hotel rooms for hotels in operation | 46,293 | 72,150 | 83,487 | ||
Leased-and-operated hotels | 28,986 | 35,254 | 37,458 | ||
Managed hotels | 17,307 | 36,896 | 46,029 | ||
Total hotel rooms for hotels under conversion | 19,578 | 23,064 | 24,365 | ||
Number of cities covered for hotels in operation | 75 | 111 | 127 | ||
Average occupancy rate | 92.2% | 87.5% | 85.5% | ||
Leased-and-operated hotels | 93.7% | 91.1% | 88.3% | ||
Managed hotels | 89.3% | 83.8% | 83.0% | ||
Average daily rate (in RMB) | 166.5 | 161.5 | 168.4 | ||
Leased-and-operated hotels | 167.9 | 167.4 | 173.3 | ||
Managed hotels | 163.6 | 154.8 | 163.8 | ||
RevPAR (in RMB) | 153.5 | 141.3 | 143.9 | ||
Leased-and-operated hotels | 157.3 | 152.4 | 153.1 | ||
Managed hotels | 146.2 | 129.7 | 135.9 | ||
Overnight occupancy rates | 88.8% | 82.9% | 81.5% | ||
Leased-and-operated hotels | 90.3% | 86.7% | 84.4% | ||
Managed hotels | 86.1% | 78.9% | 79.0% | ||
