GUANGZHOU, China, March 12, 2013 /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 fourth quarter and full year 2012.
Fourth Quarter 2012 Financial Highlights
Full Year 2012 Financial Highlights
Fourth Quarter and Full Year 2012 Operational Highlights
[1] | Definition of Total transaction value: total room revenue from leased-and-operated hotels and managed hotels. The metric is highlighted as an indicator of the scale and reach of 7 Days' brands. |
[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 December 31, 2012 as set forth in the H.10 statistical release of the Federal Reserve Board, which was US$1.00 = RMB6.2301. 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 31, 2012. |
[3] | Each ADS represents 3 of the Company's ordinary shares. |
[4] | RevPAR represents revenue per available room. |
Recent Business Developments:
Mr. Yuezhou Lin, 7 Days Group's Chief Executive Officer and Director, commented, "We are pleased to report a strong fourth quarter with financial results exceeding our guidance, concluding a solid year of steady strategic and operational progress. With our healthy pipeline and increasing economies of scale, we expect to maintain our fast expansion pace in 2013, which we believe will further solidify our position as the market leader in the economy hotel industry."
On February 28, 2013, 7 Days Group announced it entered into a definitive Agreement and Plan of Merger with various parties pursuant to which Keystone Lodging Company Limited will acquire 7 Days Group for US$4.60 per ordinary share or US$13.80 per American Depositary Share, each representing three ordinary shares ("ADSs"), through the merger of its wholly owned acquisition subsidiary, Keystone Lodging Acquisition Limited, with and into 7 Days Group, with 7 Days Group continuing as the surviving corporation and a wholly owned subsidiary of Keystone Lodging Company Limited (the "Merger"). The consideration to be paid in the Merger represents a 30.6% premium over the closing price of US$10.57 per ADS as quoted by the New York Stock Exchange on September 25, 2012, the last trading day prior to 7 Days Group's announcement on September 26, 2012 that it had received a "going private" proposal, and implies an equity value for 7 Days Group of approximately US$688 million, on a fully diluted basis.
For detailed information, please refer to the Company's news release on February 28, 2013 at the Company's website (http://en.7daysinn.cn).
Fourth Quarter 2012 Unaudited Financial Results
Gross revenues. Gross revenues for the fourth quarter 2012 were RMB736.4 million (US$118.2 million), representing a year-over-year increase of 27.3% from RMB578.5 million in the fourth quarter 2011 and an increase of 1.7% from RMB724.3 million in the third quarter 2012.
Gross revenues from leased-and-operated hotels. Gross revenues from leased-and-operated hotels for the fourth quarter 2012 amounted to RMB648.4 million (US$104.1 million), representing a 22.9% increase from RMB527.6 million in the fourth quarter 2011 and an increase of 0.3% from RMB646.3 million in the third quarter 2012.
Gross revenues from managed hotels. Gross revenues from managed hotels for the fourth quarter 2012 increased by 72.9% to RMB88.0 million (US$14.1 million) from RMB50.9 million in the same period in 2011, and increased by 12.9% from RMB77.9 million in the third quarter 2012. During the fourth quarter 2012, the Company opened 77 net managed hotels.
Total net revenues. Total net revenues for the fourth quarter 2012 totaled RMB696.0 million (US$111.7 million), representing a year-over-year increase of 27.6% from RMB545.6 million in fourth quarter 2011 and a quarter-over-quarter increase of 1.8% from RMB683.4 million in the third quarter 2012, primarily resulting from the continued growth in the number of hotels in operation.
Hotel operating costs. Hotel operating costs for the fourth quarter 2012 were RMB560.6 million (US$90.0 million), or 80.5% of total net revenues, compared with 77.5% of total net revenues in the fourth quarter 2011 and 75.7% of total net revenues in the third quarter 2012.
Sales and marketing expenses. Sales and marketing expenses for the fourth quarter 2012 were RMB31.7 million (US$5.1 million), or 4.6% of total net revenues, compared with 3.4% of total net revenues in the same period of 2011 and 2.8% in the third quarter 2012. The quarter-over-quarter increase in sales and marketing expenses was due to business development activities and associated media and brand promotions at the year end and slightly increased advertising expenses and sales commissions during the fourth quarter 2012.
General and administrative expenses. General and administrative expenses for the fourth quarter 2012 were RMB52.6 million (US$8.4 million), or 7.6% of total net revenues, compared to RMB69.5 million, or 12.7% of total net revenues in the same period of 2011, and RMB57.6 million, or 8.4% of total net revenues in the third quarter 2012. The year-over-year decrease in general and administrative expenses was primarily due to the decreased impairment loss for property and equipment as well as decreased share-based compensation expenses.
Accordingly, total operating costs and expenses amounted to RMB644.9 million (US$103.5 million), representing 92.7% of total net revenues, compared to 93.6% of total net revenues in the same period of 2011 and 86.9% in the third quarter 2012.
Income from operations. Income from operations for the fourth quarter 2012 was RMB51.1 million (US$8.2 million), compared to RMB34.9 million in the fourth quarter 2011 and RMB89.6 million in the third quarter 2012. Non-GAAP income from operations was RMB56.3 million (US$9.0 million), compared to RMB44.5 million for the same period of 2011 and RMB96.8 million in the third quarter 2012.
EBITDA. EBITDA for the fourth quarter was RMB141.2 million (US$22.7 million), an increase of 30.3% year-over-year from RMB108.4 million for the same period in 2011. Adjusted EBITDA for the quarter was RMB146.4 million (US$23.5 million) an increase of 24.1% year-over-year. EBITDA margin was 20.3% compared to 19.9% in the same period in 2011. Adjusted EBITDA margin was 21.0% compared to 21.6% in the prior year period.
Interest expense. Interest expense for the fourth quarter 2012 was RMB2.9 million, (US$0.5 million) compared to RMB4.6 million for the same period of 2011 and RMB5.2 million in the third quarter 2012.
Income tax expense. Income tax expense for the fourth quarter 2012 was RMB13.8 million (US$2.2 million), compared to RMB2.5 million in the same period of 2011 and RMB25.0 million in the third quarter 2012.
Net income attributable to 7 Days Group Holdings Limited ordinary shareholders. Net income attributable to 7 Days Group Holdings Limited ordinary shareholders was RMB37.9 million (US$6.1 million) in the fourth quarter 2012, compared to RMB35.2 million in the fourth quarter 2011 and RMB63.6 million in the third quarter 2012.
Non-GAAP net income. Non-GAAP net income was RMB43.1 million (US$6.9 million), compared to Non-GAAP net income of RMB44.8 million for the fourth quarter 2011 and Non-GAAP net income of RMB70.8 million in the third quarter 2012.
Basic and diluted earnings per ADS. Basic and diluted earnings per ADS were RMB0.77 (US$0.12) and RMB0.77 (US$0.12), respectively, for the fourth quarter 2012, compared to basic and diluted earnings per ADS of RMB0.70 in the fourth quarter 2011 and basic and diluted earnings per ADS of RMB1.29 in the third quarter 2012. Non-GAAP basic and diluted earnings per ADS were RMB0.88 (US$0.14) and RMB0.88 (US$0.14), respectively, for the fourth quarter 2012, compared to non-GAAP basic and diluted earnings per ADS of RMB0.90 and RMB0.89, respectively, in the same period of 2011 and basic and diluted earnings per ADS of RMB1.44 and RMB1.43, respectively, in the third quarter 2012.
Cash and pledged bank deposits. As of December 31, 2012, the Company had cash and pledged bank deposits of RMB382.3 million (US$61.4 million), representing a quarter-over-quarter decrease of 1.6% from RMB388.6 million as of September 30, 2012 and a year-over-year decrease of 25.5% from RMB513.1 million as of December 31, 2011, respectively.
Operating cash flow. Net operating cash inflow for the fourth quarter 2012 was RMB154.5million (US$24.8 million), representing an increase of 45.5% from RMB106.1 million in the fourth quarter 2011.
Full Year 2012 Unaudited Financial Results
Gross revenues. Gross revenues for the full year 2012 were RMB2,709.4 million (US$434.9 million), representing a year-over-year increase of 27.3% from RMB2,127.9 million in the full year 2011.
Gross revenues from leased-and-operated hotels. Gross revenues from leased-and-operated hotels for 2012 amounted to RMB2,409.8 million (US$386.8 million), representing a 25.0% increase from RMB1,927.5 million in 2011. During 2012, the Company opened 81 net leased-and-operated hotels.
Gross revenues from managed hotels. Gross revenues from managed hotels for 2012 increased by 49.5% to RMB299.6 million (US$48.1 million) from RMB200.4 million in 2011. During 2012, the Company opened 320 net managed hotels.
Total net revenues. Total net revenues for 2012 were RMB2,557.2 million (US$410.5 million), representing a year-over-year increase of 27.6% from RMB2,003.4 million in the full year 2011, primarily resulting from the continued growth in the number of hotels in operation.
Hotel operating costs. Hotel operating costs for 2012 were RMB2,033.5 million (US$326.4 million), or 79.5% of total net revenues, compared with 79.5% of total net revenues in 2011.
Sales and marketing expenses. Sales and marketing expenses for 2012 totaled RMB82.1 million (US$13.2 million), or 3.2% of total net revenues, compared with 2.5% of total net revenues in 2011. The year-over-year increase in sales and marketing expenses was due to business development activities and associated media and brand promotions at the year end and increased advertising expenses and sales commissions during 2012.
General and administrative expenses. General and administrative expenses for 2012 were RMB201.3 million (US$32.3 million), or 7.9% of total net revenues, compared to RMB209.8 million, or 10.5% of total net revenues in 2011. The year-over-year decrease in general and administrative expenses was a result of decreased impairment loss for property and equipment as well as decreased share-based compensation expenses in 2012.
Accordingly, total operating costs and expenses were RMB2,316.9 million (US$371.9 million), representing 90.6% of total net revenues, compared to 92.5% of total net revenues in 2011.
Income from operations. Income from operations for 2012 was RMB240.3 million (US$38.6 million), compared to RMB151.1 million in 2011. Non-GAAP income from operations was RMB267.4 million (US$42.9 million), compared to RMB194.6 million for 2011.
EBITDA. EBITDA was RMB581.3 million (US$93.3 million), an increase of 41.0% year-over-year from RMB412.1 million in 2011. Adjusted EBITDA was RMB608.4 million (US$97.7 million) an increase of 33.5% year-over-year. EBITDA margin was 22.7% compared to 20.6% in 2011. Adjusted EBITDA margin was 23.8% compared to 22.7% in 2011.
Interest expense. Interest expense for the full year 2012 was RMB21.5 million (US$3.4 million) compared to RMB7.2 million for 2011.
Income tax expense. Income tax expense for 2012 was RMB67.5 million (US$10.8 million), compared to RMB36.3 million in the full year 2011.
Net income attributable to 7 Days Group Holdings Limited ordinary shareholders. Net income attributable to 7 Days Group Holdings Limited ordinary shareholders was RMB176.0 million (US$28.3 million) in the full year 2012, compared to RMB128.9 million in 2011.
Non-GAAP net income. Non-GAAP net income was RMB203.2 million (US$32.6 million), compared to Non-GAAP net income of RMB172.4 million in 2011.
Basic and diluted earnings per ADS. Basic and diluted earnings per ADS were RMB3.55 (US$0.57) and RMB3.54 (US$0.57), respectively, for the full year 2012, compared to basic and diluted earnings per ADS of RMB2.58 and RMB2.56 for 2011, respectively. Non-GAAP basic and diluted earnings per ADS were RMB4.10 (US$0.66) and RMB4.09 (US$0.66), respectively, for the full year 2012, compared to non-GAAP basic and diluted earnings per ADS of RMB3.45 and RMB3.43 in the full year 2011.
Operating cash flow. Net operating cash inflow for the full year 2012 was RMB572.5 million (US$91.9 million), representing an increase of 25.1% from RMB457.5 million in 2011.
Guidance
The Company expects to generate total net revenues in the range of RMB620 million to RMB635 million in the first quarter 2013 and full year 2013 total net revenues to grow 15% to 18% over the full year 2012. For the full year 2013, the Company expects to open 360 new hotels, including 50 leased-and-operated hotels and 310 managed hotels. These 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 10:00 pm (Eastern) / 7:00 pm (Pacific) Monday, March 11, 2013, which is 10:00 am (Beijing) on Tuesday, March 12, 2013 to discuss its fourth quarter and full year 2012 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: | 1 866 519 4004 |
US New York: | 1 718 354 1231 |
International: | 65 6723 9381 |
Passcode: | 7Days |
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: | 1 855 452 5696 |
International: | 61 2 8199 0299 |
Conference ID number: | 97171556 |
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:
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 first quarter and the full year 2012 and business forecast for 2012 including the expected number of hotel to be opened (including the breakdown of expected new leased-and-operated hotels and new managed hotels), Company's business strategies, its ability to offer consistent and high-quality accommodations and services at an affordable price, 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, which 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 results of operations for the fourth quarter and the full year 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 annual financial statements are prepared and audit work is performed for the year end audit, 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
IR@7daysinn.cn
Investor Relations (US):
Mahmoud Siddig, Managing Director
Taylor Rafferty
Tel: +1 (212) 889-4350
7DaysInn@taylor-rafferty.com
Investor Relations (HK):
Candy Cheung, Senior Consultant
Taylor Rafferty
+852 3196 3712
7DaysInn@taylor-rafferty.com
-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --
7 Days Group Holdings Limited | ||||||
Consolidated balance sheet information
| ||||||
Quarter Ended | ||||||
31/Dec/11 | 30/Sep/12 | 31/Dec/12 | ||||
RMB' 000 | RMB' 000 | RMB' 000 | US$'000 | |||
ASSETS | ||||||
Current assets: | ||||||
Cash | 493,256 | 385,070 | 378,809 | 60,803 | ||
Pledged bank deposits | 19,852 | 3,484 | 3,443 | 553 | ||
Short-term investment | 10,000 | - | - | - | ||
Accounts receivable | 7,881 | 16,870 | 17,015 | 2,731 | ||
Prepaid rent | 152,629 | 173,112 | 171,370 | 27,507 | ||
Other prepaid expenses and current assets | 52,550 | 69,433 | 77,608 | 12,457 | ||
Hotel supplies | 47,371 | 51,904 | 56,591 | 9,083 | ||
Amounts due from related parties | - | 87 | 87 | 14 | ||
Deferred tax assets | 19,842 | 19,144 | 26,222 | 4,209 | ||
Total current assets | 803,381 | 719,104 | 731,145 | 117,357 | ||
Property and equipment, net | 1,701,431 | 1,851,653 | 1,970,763 | 316,329 | ||
Rental deposits | 69,861 | 90,731 | 90,824 | 14,578 | ||
Land use right | 24,044 | 23,581 | 23,426 | 3, 760 | ||
Prepaid rent | 73,419 | 63,822 | 71,088 | 11,410 | ||
Intangible assets, net | 30,426 | 27,272 | 26,221 | 4,209 | ||
Goodwill | 61,041 | 61,041 | 61,041 | 9,798 | ||
Other non-current assets | 500 | - | - | - | ||
Deferred tax assets | 46,096 | 62,615 | 62,513 | 10, 034 | ||
Total assets | 2,810,199 | 2,899,819 | 3,037,021 | 487,475 | ||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | 249,592 | 247,871 | 300,240 | 48,192 | ||
Bills payable | 16,009 | 13,182 | 11,475 | 1,842 | ||
Short-term bank borrowings | 334,686 | 71,000 | 130,015 | 20,869 | ||
Accrued expenses and other payables | 418,308 | 477,603 | 511,800 | 82,150 | ||
Amounts due to related parties | 333 | 1,850 | 2,601 | 417 | ||
Income taxes payable | 25,509 | 36,947 | 25,617 | 4,112 | ||
Total current liabilities | 1,044,437 | 848,453 | 981,748 | 157,582 | ||
Long-term bank borrowings | - | 178,975 | 121,381 | 19,483 | ||
Accrued lease payment | 206,113 | 238,642 | 256,472 | 41,167 | ||
Unfavorable lease contract liability | 7,812 | 7,305 | 7,136 | 1,145 | ||
Refundable deposits | 15,823 | 15,050 | 14,850 | 2,384 | ||
Deferred revenue | 770 | 608 | - | - | ||
Deferred rebate income | 6,663 | 5,984 | 5,727 | 919 | ||
Borrowings from related parties | 1,388 | 892 | 752 | 121 | ||
Income taxes payable | 6,644 | 6,644 | 3,317 | 532 | ||
Deferred tax liabilities | 4,565 | 2,935 | 7,527 | 1,208 | ||
Total liabilities | 1,294,215 | 1,305,488 | 1,398,910 | 224,541 | ||
Equity: | ||||||
Ordinary shares | 141,080 | 141,133 | 141,317 | 22,683 | ||
Treasury stock | - | (67,137) | (67,137) | (10,776) | ||
Additional paid-in capital | 1,623,275 | 1,638,948 | 1,649,880 | 264,824 | ||
Accumulated other comprehensive income | 330 | 1,136 | (721) | (116) | ||
Accumulated deficit | (238,348) | (100,203) | (62,303) | (10,001) | ||
Total 7 Days Group Holdings Limited share holders' equity | 1,526,337 | 1,613,877 | 1,661,036 | 266,614 | ||
Non-controlling interests | (10,353) | (19,546) | (22,925) | (3,680) | ||
Total equity | 1,515,984 | 1,594,331 | 1,638,111 | 262,934 | ||
Total liabilities and equity | 2,810,199 | 2,899,819 | 3,037,021 | 487,475 | ||
7 Days Group Holdings Limited Unaudited Consolidated Statements of Income and Comprehensive Income
| |||||||||||
Quarter Ended | Year Ended | ||||||||||
Dec 31 | Sep 30 | Dec 31 | Dec 31 | Dec 31 | |||||||
2011 | 2012 | 2012 | 2011 | 2012 | |||||||
RMB'000 | RMB'000 | RMB'000 | US$'000 | RMB'000 | RMB'000 | US$'000 | |||||
Total Revenues | 578,481 | 724,252 | 736,385 | 118,198 | 2,127,938 | 2,709,356 | 434,881 | ||||
Leased-and-operated hotels | 527,609 | 646,330 | 648,427 | 104,080 | 1,927,537 | 2,409,805 | 386,800 | ||||
Managed hotels | 50,872 | 77,922 | 87,958 | 14,118 | 200,401 | 299,551 | 48,081 | ||||
Less: Business tax and surcharges | (32,852) | (40,854) | (40,355) | (6,477) | (124,560) | (152,171) | (24,425) | ||||
Net revenues | 545,629 | 683,398 | 696,030 | 111,721 | 2,003,378 | 2,557,185 | 410,456 | ||||
Operating costs and expenses | |||||||||||
Hotel operating costs | (422,878) | (517,129) | (560,637) | (89,988) | (1,593,260) | (2,033,508) | (326,400) | ||||
Rental expenses | (152,923) | (179,513) | (190,645) | (30,601) | (571,351) | (707,692) | (113,592) | ||||
Staff cost | (88,794) | (100,887) | (114,169) | (18,325) | (317,374) | (406,623) | (65,267) | ||||
Depreciation and amortization | (66,961) | (80,602) | (84,790) | (13,610) | (241,020) | (314,189) | (50,431) | ||||
Hotel supplies | (25,967) | (35,800) | (40,439) | (6,491) | (97,452) | (135,112) | (21,687) | ||||
Utilities | (35,618) | (47,744) | (46,554) | (7,472) | (145,468) | (190,030) | (30,502) | ||||
Other | (52,615) | (72,583) | (84,040) | (13,489) | (220,595) | (279,862) | (44,921) | ||||
Sales and marketing expenses | (18,336) | (19,059) | (31,702) | (5,089) | (49,222) | (82,116) | (13,181) | ||||
General and administrative expenses | (69,542) | (57,596) | (52,555) | (8,436) | (209,786) | (201,271) | (32,306) | ||||
Total operating costs and expenses | (510,756) | (593,784) | (644,894) | (103,513) | (1,852,268) | (2,316,895) | (371,887) | ||||
Income from operations | 34,873 | 89,614 | 51,136 | 8,208 | 151,110 | 240,290 | 38,569 | ||||
Other income (expenses) | |||||||||||
Interest income | 2,350 | 1,716 | 800 | 128 | 6,224 | 7,887 | 1,266 | ||||
Interest expense | (4,627) | (5,221) | (2,875) | (461) | (7,212) | (21,459) | (3,444) | ||||
Equity income (loss) of an affiliate | - | - | - | - | 120 | - | - | ||||
Income before income tax | 32,596 | 86,109 | 49,061 | 7,875 | 150,242 | 226,718 | 36,391 | ||||
Income tax expenses | (2,507) | (25,011) | (13,844) | (2,222) | (36,259) | (67,540) | (10,841) | ||||
Net income | 30,089 | 61,098 | 35,217 | 5,653 | 113,983 | 159,178 | 25,550 | ||||
Net income attributable to non-controlling interest | 5,131 | 2,511 | 2,683 | 431 | 14,903 | 16,867 | 2,707 | ||||
Net income attributable to 7 Days | 35,220 | 63,609 | 37,900 | 6,084 | 128,886 | 176,045 | 28,257 | ||||
Basic earnings per ordinary share | 0.23 | 0.43 | 0.26 | 0.04 | 0. 86 | 1.18 | 0.19 | ||||
Diluted earnings per ordinary share | 0.23 | 0.43 | 0.26 | 0.04 | 0.85 | 1.18 | 0.19 | ||||
Other Comprehensive income (loss) | |||||||||||
Foreign currency transaction | (2,861) | 480 | (1,857) | (298) | (15,319) | (1,051) | (169) | ||||
Comprehensive income | 27,228 | 61,578 | 33,360 | 5,355 | 98,664 | 158,127 | 25,381 | ||||
Less: Comprehensive income | (5,131) | (2,511) | (2,683) | (431) | (14,903) | (16,867) | (2,707) | ||||
Comprehensive income attributable to | 32,359 | 64,089 | 36,043 | 5,786 | 113,567 | 174,994 | 28,088 | ||||
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 | |||||||||
2011 | 2012 | 2012 | 2011 | 201 | |||||||||
RMB'000 | RMB'000 | RMB'000 | US$'000 | RMB'000 | RMB'000 | US$'000 | |||||||
Net income attributable to 7 Days Group Holdings Limited ordinary shareholders | 35,220 | 63,609 | 37,900 | 6,084 | 128,886 | 176,045 | 28,257 | ||||||
Interest income | (2,350) | (1,716) | (800) | (128) | (6,224) | (7,887) | (1,266) | ||||||
Interest expense | 4,627 | 5,221 | 2,875 | 461 | 7,212 | 21,459 | 3,444 | ||||||
Income tax expenses | 2,507 | 25,011 | 13,844 | 2,222 | 36,259 | 67,540 | 10,841 | ||||||
Depreciation and amortization | 68,382 | 83,237 | 87,429 | 14,033 | 246,007 | 324,126 | 52,026 | ||||||
EBITDA (non-GAAP) | 108,386 | 175,362 | 141,248 | 22,672 | 412,140 | 581,283 | 93,302 | ||||||
EBITDA% | 19.9% | 25.7% | 20.3% | 20.3% | 20.6% | 22.7% | 22.7% | ||||||
Share-based compensation expenses | 9,585 | 7,227 | 5,187 | 833 | 43,483 | 27,127 | 4,354 | ||||||
Adjusted EBITDA (non-GAAP) excluding share-based compensation expenses | 117,971 | 182,589 | 146,435 | 23,505 | 455,623 | 608,410 | 97,656 | ||||||
Adjusted EBITDA% | 21.6% | 26.7% | 21.0% | 21.0% | 22.7% | 23.8% | 23.8% | ||||||
Non-GAAP net income attributable to 7 Days Group Holdings Limited ordinary shareholders
| ||||||||||||||||||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||||||||||||||||||
Dec 31 | Sep 30 | Dec 31 | Dec 31 | Dec 31 | ||||||||||||||||||||||||||||
2011 | 2012 | 2012 | 2011 | 2012 | ||||||||||||||||||||||||||||
RMB'000 | RMB'000 | RMB'000 | US$'000 | RMB'000 | RMB'000 | US$'000 | ||||||||||||||||||||||||||
Net income attributable to 7 Days Group | 35,220 | 63,609 | 37,900 | 6,084 | 128,886 | 176,045 | 28,257 | |||||||||||||||||||||||||
Share-based compensation expenses | 9,585 | 7,227 | 5,187 | 833 | 43,483 | 27,127 | 4,354 | |||||||||||||||||||||||||
Net income attributable to ordinary shareholders excluding share-based | 44,805 | 70,836 | 43,087 | 6,917 | 172,369 | 203,172 | 32,611 | |||||||||||||||||||||||||
Earnings per share | ||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||
Dec 31 | Sep 30 | Dec 31 | Dec 31 | Dec 31 | ||||||||||||
2011 | 2012 | 2012 | 2011 | 2012 | ||||||||||||
RMB | RMB | RMB | USD | RMB | RMB | USD | ||||||||||
Basic earnings per ordinary share | 0.23 | 0.43 | 0.26 | 0.04 | 0.86 | 1.18 | 0.19 | |||||||||
Diluted earnings per ordinary share | 0.23 | 0.43 | 0.26 | 0.04 | 0.85 | 1.18 | 0.19 | |||||||||
Basic earnings per ordinary
|
0.30
|
0.48
|
0.29
|
0.05
|
1.15
|
1.37
|
0.22
| |||||||||
Diluted earnings per ordinary
|
0.30
|
0.48
|
0.29
|
0.05
|
1.14
|
1.36
|
0.22
| |||||||||
Denominator: | ||||||||||||||||
Basic weighted average number of | 149,926,081 | 147,769,286 | 146,813,397 | 149,811,784 | 148,602,762 | |||||||||||
Diluted weighted average number of | 151,023,253 | 148,164,932 | 147,384,945 | 151,473,066 | 149,145,386 | |||||||||||
Quarter Ended | Year Ended | |||||||||
31-Dec-11 | 30-Sep-12 | 31-Dec-12 | 31-Dec-11 | 31-Dec-12 | ||||||
RMB '000 | RMB '000 | RMB'000 | USD'000 | RMB '000 | RMB'000 | USD'000 | ||||
Hotel operating cost | ||||||||||
GAAP Result | (422,878) | (517,129) | (560,637) | (89,988) | (1,593,260) | (2,033,508) | (326,400) | |||
% of Total net revenue | 77.50% | 75.67% | 80.55% | 80.55% | 79.53% | 79.52% | 79.52% | |||
Share-based Compensation | 384 | 582 | 313 | 50 | 2,551 | 1,723 | 277 | |||
% of Total net revenue | 0.07% | 0.09% | 0.04% | 0.04% | 0.13% | 0.07% | 0.07% | |||
Non-GAAP Result | (422,494) | (516,547) | (560,324) | (89,938) | (1,590,709) | (2,031,785) | (326,123) | |||
% of Total net revenue | 77.43% | 75.59% | 80.50% | 80.50% | 79.40% | 79.45% | 79.45% | |||
Sales and marketing expenses | ||||||||||
GAAP Result | (18,336) | (19,059) | (31,702) | (5,089) | (49,222) | (82,116) | (13,181) | |||
% of Total net revenue | 3.36% | 2.79% | 4.55% | 4.55% | 2.46% | 3.21% | 3.21% | |||
Share-based Compensation | 627 | 703 | 578 | 93 | 1,094 | 2,481 | 398 | |||
% of Total net revenue | 0.11% | 0.10% | 0.08% | 0.08% | 0.05% | 0.10% | 0.10% | |||
Non-GAAP Result | (17,709) | (18,356) | (31,124) | (4,996) | (48,128) | (79,635) | (12,783) | |||
% of Total net revenue | 3.25% | 2.69% | 4.47% | 4.47% | 2.40% | 3.11% | 3.11% | |||
General and administrative expenses | ||||||||||
GAAP Result | (69,542) | (57,596) | (52,555) | (8,436) | (209,786) | (201,271) | (32,306) | |||
% of Total net revenue | 12.75% | 8.43% | 7.55% | 7.55% | 10.47% | 7.87% | 7.87% | |||
Share-based Compensation | 8,574 | 5,942 | 4,296 | 690 | 39,838 | 22,923 | 3,679 | |||
% of Total net revenue | 1.57% | 0.87% | 0.62% | 0.62% | 1.99% | 0.90% | 0.90% | |||
Non-GAAP Result | (60,968) | (51,654) | (48,259) | (7,746) | (169,948) | (178,348) | (28,627) | |||
% of Total net revenue | 11.17% | 7.56% | 6.93% | 6.93% | 8.48% | 6.97% | 6.97% | |||
Total operating cost and expenses | ||||||||||
GAAP Result | (510,756) | (593,784) | (644,894) | (103,513) | (1,852,268) | (2,316,895) | (371,887) | |||
% of Total net revenue | 93.61% | 86.89% | 92.65% | 92.65% | 92.46% | 90.60% | 90.60% | |||
Share-based Compensation | 9,585 | 7,227 | 5,187 | 833 | 43,483 | 27,127 | 4,354 | |||
% of Total net revenue | 1.76% | 1.06% | 0.75% | 0.75% | 2.17% | 1.06% | 1.06% | |||
Non-GAAP Result | (501,171) | (586,557) | (639,707) | (102,680) | (1,808,785) | (2,289,768) | (367,533) | |||
% of Total net revenue | 91.85% | 85.83% | 91.91% | 91.91% | 90.29% | 89.54% | 89.54% | |||
Income from operations | ||||||||||
GAAP Result | 34,873 | 89,614 | 51,136 | 8,208 | 151,110 | 240,290 | 38,569 | |||
% of Total net revenue | 6.39% | 13.11% | 7.35% | 7.35% | 7.54% | 9.40% | 9.40% | |||
Share-based Compensation | 9,585 | 7,227 | 5,187 | 833 | 43,483 | 27,127 | 4,354 | |||
% of Total net revenue | 1.76% | 1.06% | 0.75% | 0.75% | 2.17% | 1.06% | 1.06% | |||
Non-GAAP Result | 44,458 | 96,841 | 56,323 | 9,041 | 194,593 | 267,417 | 42,923 | |||
% of Total net revenue | 8.15% | 14.17% | 8.09% | 8.09% | 9.71% | 10.46% | 10.46% | |||
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 | |||
2011 | 2012 | 2012 | 2011 | 2012 | |||
Hotels in operation | 944 | 1,236 | 1,345 | 944 | 1,345 | ||
Leased-and-operated hotels | 411 | 460 | 492 | 411 | 492 | ||
Managed hotels | 533 | 776 | 853 | 533 | 853 | ||
Hotels under conversion | 234 | 228 | 223 | 234 | 223 | ||
Leased-and-operated hotels | 32 | 43 | 21 | 32 | 21 | ||
Managed hotels | 202 | 185 | 202 | 202 | 202 | ||
Total hotel rooms for hotels in operation | 94,684 | 123,080 | 133,497 | 94,684 | 133,497 | ||
Leased-and-operated hotels | 43,021 | 48,380 | 51,725 | 43,021 | 51,725 | ||
Managed hotels | 51,663 | 74,700 | 81,772 | 51,663 | 81,772 | ||
Total hotel rooms for hotels under conversion | 22,485 | 21,674 | 20,368 | 22,485 | 20,368 | ||
Number of cities covered for hotels in operation | 141 | 191 | 208 | 141 | 208 | ||
Average occupancy rate | 82.8% | 85.0% | 78.1% | 84.6% | 81.3% | ||
Leased-and-operated hotels | 86.4% | 86.1% | 79.2% | 87.9% | 82.9% | ||
Managed hotels | 80.0% | 84.3% | 77.4% | 81.5% | 80.3% | ||
Average daily rate (in RMB) | 159.6 | 165.6 | 161.8 | 161.0 | 161.7 | ||
Leased-and-operated hotels | 165.8 | 169.5 | 168.5 | 166.2 | 167.0 | ||
Managed hotels | 154.3 | 163.0 | 157.4 | 155.8 | 158.0 | ||
RevPAR (in RMB) | 132.2 | 140.9 | 126.4 | 136.2 | 131.5 | ||
Leased-and-operated hotels | 143.3 | 145.9 | 133.4 | 146.0 | 138.3 | ||
Managed hotels | 123.5 | 137.5 | 121.9 | 127.0 | 126.9 | ||
