SHANGHAI, November 14, 2012 /PRNewswire/ -- Home Inns & Hotels Management Inc. (NASDAQ: HMIN) ("Home Inns Group" or "the Company"), a leading economy hotel chain in China, today announced its unaudited financial results for the third quarter ended September 30, 2012.
Home Inns Group acquired Motel 168 and has consolidated Motel 168's operating and financial results since October 1, 2011. Consolidated group numbers are presented in this earnings release unless specifically mentioned. For the purpose of providing more context and comprehensive information to investors, Home Inns Group separately presents key financial data excluding Motel 168 in this earnings release in Appendix 1.
Key Highlights for Third Quarter 2012
Financial Highlights
Operational Highlights
"We are very pleased to report higher than expected revenue and solid overall operating results for the third quarter," said Mr. David Sun, the Company's chief executive officer. "Even though the overall macroeconomic market conditions remained soft, we effectively maintained stable performance in our core business and kept the integration of Motel 168 well on track for continued operational improvements. Further, our new hotels have been ramping up according to expectations and our productivity measures are generating positive impact to protect margins despite limited price opportunities and rising costs.
"There remains a level of uncertainty in the marketplace and we may not see significant improvements for another six to nine months. However, we believe China's travel and lodging industry will continue to provide growth and broad opportunity for the strongest players. We will continue to further the integration of Motel 168, leverage the strong growth momentum of our high margin franchise business, fully establish a strong foundation for the Yitel brand, and keep a vigilant control over our cost structure. We are confident of achieving profitable growth and driving long-term value for our shareholders."
Detailed Overview of Financial Results for Third Quarter 2012
Total Revenues for the third quarter of 2012 increased 61.8% year over year to RMB 1.60 billion (US$254.3 million), including revenues from Motel 168 of RMB 398.9 million (US$63.5 million). Motel 168 achieved the higher end of its revenue guidance for the third quarter.
Total Operating Costs and Expenses for the third quarter of 2012 were RMB 1.36 billion (US$215.6 million). Excluding any share-based compensation expenses and acquisition and integration cost, total operating costs and expenses (non-GAAP) for the quarter were RMB 1.30 billion (US$207.6 million), representing 81.6% of total revenues, compared with 77.6% for the same quarter a year ago and 82.4% for the second quarter of 2012.
Income from Operations for the third quarter of 2012 was RMB 154.0 million (US$24.5 million). Income from operations excluding share-based compensation expenses and integration cost (non-GAAP) for the third quarter of 2012 was RMB 204.7 million (US$32.6 million), or 12.8% of total revenues, compared to RMB 160.0 million, or 16.2% of total revenues, in the same period of 2011 and RMB 170.4 million, or 11.8% of total revenues, in the second quarter of 2012. The year-over-year decrease in the ratio of income from operations excluding share-based compensation expenses and acquisition and integration cost (non-GAAP) over total revenues was mainly caused by the higher cost ratio at Motel 168, absence of systematic selling price increases and one-time charges. The sequential increase in this ratio was mainly due to seasonality.
EBITDA (non-GAAP) for the third quarter of 2012 was RMB 283.5 million (US$45.1 million). Excluding any share-based compensation expenses, foreign exchange gain or loss, acquisition and integration cost, loss from fair value change of convertible notes and interest rate swap contracts non-operating expenses, adjusted EBITDA (non-GAAP) was RMB 375.5 million (US$59.8 million), or 23.5% of total revenues, compared to RMB 272.9 million, or 27.6% of total revenues, in the same period in 2011 and RMB 331.6 million, or 22.9% of total revenues, in the second quarter of 2012.
Consolidated Net Income Attributable to Home Inns Group's Shareholders for the third quarter of 2012 was RMB 33.7 million (US$5.4 million). Adjusted net income attributable to Home Inns Group's shareholders (non-GAAP), which excludes any share-based compensation expenses, foreign exchange gain or loss, acquisition and integration cost, upfront fee amortization of term loan, gain or loss from fair value change of convertible notes and interest rate swap contracts, withholding tax for profit distribution of previous periods and other non-operating expenses, was RMB 135.8 million (US$21.6 million) for the third quarter of 2012, compared to adjusted net income (non-GAAP) of RMB 132.0 million in the same period of 2011 and adjusted net income (non-GAAP) of RMB 108.5 million in the second quarter of 2012.
Basic and Diluted Earnings Per Ordinary Share and Per ADS for the third quarter of 2012: Basic earnings per share was RMB 0.37 (US$0.06), while diluted earnings per share was also RMB 0.37 (US$0.06). Basic earnings per ADS was RMB 0.74 (US$0.12), while diluted earnings per ADS was RMB 0.73 (US$0.12). Excluding any share-based compensation expenses, foreign exchange gain or loss, acquisition and integration cost, upfront fee amortization of term loan, gain or loss from fair value change of convertible notes and interest rate swap contracts, withholding tax for profit distribution of previous periods and other non-operating expenses, adjusted basic earnings per share (non-GAAP) was RMB 1.50 (US$0.24), while adjusted diluted earnings per share (non-GAAP) was RMB 1.47 (US$0.23). Adjusted basic earnings per ADS (non-GAAP) was RMB 2.99 (US$0.48), while adjusted diluted earnings per ADS (non-GAAP) was RMB 2.93 (US$0.47).
Cash Flow
Net operating cash flow for the third quarter of 2012 was RMB 239.9 million (US$38.2 million), compared to RMB 276.9 million from the third quarter of 2011. Capitalized expenditures for the third quarter of 2012 were RMB 357.4 million (US$56.9 million), while related cash paid for capital expenditures during the quarter was RMB 225.3 million (US$35.8 million).
Balance Sheet
As of September 30, 2012, the Company had cash and cash equivalents of RMB 752.5 million (US$119.7 million). The outstanding balance of convertible bonds (issued in 2007) was RMB 113.5 million (US$18.1 million) including principal and accrued interest. Financial liabilities of RMB 1.03 billion (US$164.1 million) consisted of the outstanding balance of long-term financial liability for convertible notes (issued in December 2010) and interest swap contracts (both measured at fair value). The balance of the Company's U.S. dollar-denominated four-year term loan facility decreased to RMB 786.3 million (US$125.1 million), as the Company paid down US$21 million during the third quarter of 2012.
Outlook for the Full Year 2012
Home Inns Group is reiterating its expected revenue for the full year 2012.
Total revenues for Home Inns Group for the year are expected to be in the range of RMB 5,715 million (US$909.3 million) to RMB 5,810 million (US$924.5 million).
Total revenues for the Motel 168 brand for the full year are expected to be in the range of RMB 1,475 million (US$234.7 million) to RMB 1,500 million (US$238.7 million).
Total revenues excluding Motel 168 brand for the full year of 2012 are expected to be in the range of RMB 4,240 million (US$674.6 million) to RMB 4,310 million (US$685.8 million).
Driven by strong franchised-and-managed hotel development, the Company expects to open no less than 360 new hotels in 2012 exceeding its guidance range of 330-360 hotel openings for the full year.
These forecasts reflect Home Inns Group's current and preliminary view, which is subject to change.
This announcement contains translations of certain RMB amounts into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.2848 to US$1.00, the noon buying rate for September 28, 2012 set forth in the H.10 statistical release of the Federal Reserve Board.
Conference Call Information
Management will hold an earnings conference call at 8:00 PM U.S. Eastern Standard Time on November 13, 2012 (9:00 AM Beijing/Hong Kong Time on November 14, 2012).
Dial-in details for the earnings conference call are as follows:
China Mainland: | 800.819.0121 or 400.620.8038 |
Hong Kong (toll free): | 800.930.346 |
Hong Kong: | 852.2475.0994 |
U.S. (toll free): | 1.866.519.4004 |
U.S.: | 1.718.354.1231 |
U.K. (toll free): | 080.8234.6646 |
U.K.: | 44.2030.598.139 |
Australia (toll free): | 1.800.457.076 |
Taiwan (toll free): | 008.0112.6920 |
International: | 65.6723.9381 |
Pass code for all regions: | Home Inns |
A replay of the conference call may be accessed by phone at the following numbers until the end of November 21, 2012 U.S. Eastern Standard Time.
U.S. toll free: | 1.866.214.5335 |
China toll free: | 10.800.714.0386 |
Hong Kong toll free: | 800.901.596 |
International: | 61.2.8235.5000 |
Conference ID number: | 35531194 |
Live and archived webcasts of this conference call will be available at http://english.homeinns.com.
About Home Inns Group
Home Inns Group is a leading economy hotel chain in China based on the number of hotels and hotel rooms, as well as the geographic coverage of the hotel chain. Since the Company commenced operations in 2002, it has built Home Inn as one of the best-known economy hotel brands in China. In October of 2011, Home Inns Group acquired Motel 168, another well-known hotel chain in China, as its second economy hotel brand. Home Inns Group aims to offer a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Home Inns Group's ADSs, each of which represents two ordinary shares, are currently trading on the NASDAQ Global Select Market under the symbol "HMIN." For more information about Home Inns Group, please visit http://english.homeinns.com.
Safe Harbor
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Any statements in this press release that are not historical facts are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; the expected growth of the lodging market in China; our expected successful consolidation and integration of Motel 168 with our existing operations; and other factors and risks detailed in our filings with the Securities and Exchange Commission. This press release also contains statements or projections that are based upon information available to the public, as well as other information from sources which management believes to be reliable, but it is not guaranteed by us to be accurate, nor does it purport to be complete. We undertake no obligation to update or revise to the public any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
Non-GAAP Financial Measures
To supplement Home Inns Group's unaudited consolidated financial results presented in accordance with U.S. GAAP, Home Inns Group uses the following non-GAAP measures:
Any financial data referring to "Excluding Motel 168" are also non-GAAP financial measures. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of this press release.
Home Inns Group believes that, used in conjunction with GAAP financial measures, these non-GAAP financial measures provide meaningful supplemental information regarding the Group's performance, and both management and investors benefit from referring to these non-GAAP financial measures in assessing the Group's performance and when planning and forecasting future periods. Management believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization, is a useful financial metric to assess Home Inns Group's operating and financial performance before the impact of investing and financing transactions and income taxes. In addition, management believes that EBITDA is widely used by other companies in the lodging industry and may be used as an analysis tool by both management and investors to measure and compare Home Inns Group's operational and financial performance with industry peers.
One of the limitations of using non-GAAP income from operations, EBITDA, adjusted EBITDA and non-GAAP net income attributable to shareholders is that they do not include all items that impact Home Inns Group's net income (loss) for the period. These non-GAAP measures exclude share-based compensation expenses, foreign exchange gain or loss and gain or loss from fair value change of convertible notes, which have been and will continue to be a significant recurring expense in Home Inns Group's business. In addition, Home Inns Group's EBITDA and adjusted EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as Home Inns Group does. Management compensates for this and other limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. Home Inns Group computes the non-GAAP financial measures using the same consistent method from quarter to quarter. Reconciliations of GAAP and non-GAAP results are included at the end of this press release. The non-GAAP adjustment items do not include the tax impact.
The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that Home Inns Group's future results will be unaffected by other charges and gains Home Inns Group considers to be outside the ordinary course of its business.
Home Inns Group completed its acquisition of 100% equity interest in Motel 168, and took control of Motel 168 effective on October 1, 2011. Home Inns Group has consolidated Motel 168's operating and financial results since October 1, 2011. Home Inns Group has presented certain separated financial data of Motel 168 in this earning release for the purpose of providing more information to investors. Home Inns Group will provide separate financial data for Motel 168 through the 2012 fiscal year.
For investor and media inquiries, please contact:
Ethan Ruan
Home Inns & Hotels Management Inc.
Tel: + 86-21-3401-9898*2004
Email: zjruan@homeinns.com
Cara O'Brien
FTI Consulting
Tel: +852-3768-4537
Email: cara.obrien@fticonsulting.com
Appendix 1:
For the purpose of providing more context and comprehensive information to investors, Home Inns Group separately presents key financial data excluding Motel 168 below. Home Inns Group will continue to provide separate financial data for Motel 168 through the integration period. All information outlined below excludes Motel 168 results and Motel 168 integration costs unless specifically mentioned.
Third Quarter 2012 Operational and Financial Highlights for Home Inns and Yitel Hotels
Home Inns & Hotels Management Inc. | ||||||
Unaudited Condensed Consolidated Balance Sheet | ||||||
December 31, 2011 | September 30, | |||||
RMB '000 | RMB '000 | US$ '000 | ||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | 1,786,038 | 752,454 | 119,726 | |||
Restricted cash | 205,926 | 316,184 | 50,309 | |||
Accounts receivable, net | 91,980 | 104,704 | 16,660 | |||
Receivables from related parties | 6,379 | 5,838 | 929 | |||
Consumables | 43,049 | 43,276 | 6,886 | |||
Prepayments and other current assets | 137,887 | 177,989 | 28,321 | |||
Deferred tax assets | 75,446 | 79,572 | 12,661 | |||
Total current assets | 2,346,705 | 1,480,017 | 235,492 | |||
Investment in a jointly controlled entity | 8,301 | 7,118 | 1,133 | |||
Property and equipment, net | 3,452,846 | 3,736,530 | 594,534 | |||
Goodwill | 2,197,728 | 2,252,052 | 358,333 | |||
Intangible assets, net | 1,174,452 | 1,157,165 | 184,121 | |||
Other assets | 170,039 | 116,971 | 18,612 | |||
Non-current deferred tax assets | 199,765 | 255,376 | 40,634 | |||
Total assets | 9,549,836 | 9,005,229 | 1,432,859 | |||
LIABILITIES | ||||||
Current liabilities: | ||||||
Accounts payable | 91,457 | 70,959 | 11,291 | |||
Payables to related parties | 2,797 | 4,781 | 761 | |||
Short term loans | 346,550 | 31,705 | 5,045 | |||
Finance lease liabilities | 7,006 | 6,778 | 1,078 | |||
Salaries and welfare payable | 178,032 | 211,039 | 33,579 | |||
Income tax payable | 80,356 | 83,353 | 13,263 | |||
Other taxes payable | 27,295 | 27,800 | 4,423 | |||
Deferred revenues | 202,870 | 217,024 | 34,532 | |||
Convertible bonds | 113,051 | 113,467 | 18,054 | |||
Other unpaid and accruals | 154,498 | 164,615 | 26,193 | |||
Other payables | 847,090 | 971,716 | 154,614 | |||
Deferred tax liability | 38,313 | 23,843 | 3,794 | |||
Total current liabilities | 2,089,315 | 1,927,080 | 306,627 | |||
Long term loans | 1,165,666 | 754,579 | 120,064 | |||
Deferred rental | 593,955 | 569,714 | 90,650 | |||
Deferred revenues | 79,202 | 46,918 | 7,465 | |||
Finance lease liabilities | 7,750 | 3,160 | 503 | |||
Deposits | 63,472 | 85,932 | 13,673 | |||
Unfavorable lease liabilities | 396,774 | 378,778 | 60,269 | |||
Financial liabilities* | 979,008 | 1,031,389 | 164,108 | |||
Deferred tax liabilities | 294,728 | 289,920 | 46,130 | |||
Total liabilities | 5,669,870 | 5,087,470 | 809,489 | |||
Shareholders' equity | ||||||
Ordinary shares (US$0.005 par value; 200,000,000 shares authorized, 90,659,882 and 90,806,820 shares issued and outstanding as of December 31, 2011 and September 30 2012, respectively) | 3,542 | 3,546 | 564 | |||
Additional paid-in capital | 2,683,923 | 2,758,594 | 438,931 | |||
Statutory reserves | 125,863 | 125,722 | 20,004 | |||
Retained earnings | 1,051,976 | 1,018,922 | 162,125 | |||
Total Home Inns shareholders' equity | 3,865,304 | 3,906,784 | 621,624 | |||
Noncontrolling interests | 14,662 | 10,975 | 1,746 | |||
Total shareholders' equity | 3,879,966 | 3,917,759 | 623,370 | |||
Total liabilities and shareholders' equity | 9,549,836 | 9,005,229 | 1,432,859 | |||
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2848 | ||||||
representing the certificated exchange rate published by the Federal Reserve Board. | ||||||
Note 2: Financial liabilities represent convertible notes measured at fair value and interest swap transaction. |
Home Inns & Hotels Management Inc. | ||||||||||||||||
Unaudited Condensed Consolidated Statement of Operations | ||||||||||||||||
Quarter Ended | ||||||||||||||||
September 30, 2011 | June 30, 2012 | September 30, 2012 | ||||||||||||||
RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | US$ '000 | RMB '000 | RMB '000 | |||||||||
Group | Group | Motel 168 | excluding | Group | Group | Motel 168 | excluding | |||||||||
Revenues: | ||||||||||||||||
Leased-and-operated hotels | 882,070 | 1,300,218 | 359,678 | 940,540 | 1,431,786 | 227,817 | 381,068 | 1,050,718 | ||||||||
Franchised-and-managed hotels | 105,962 | 149,724 | 17,700 | 132,024 | 166,624 | 26,512 | 17,797 | 148,827 | ||||||||
Total revenues | 988,032 | 1,449,942 | 377,378 | 1,072,564 | 1,598,410 | 254,329 | 398,865 | 1,199,545 | ||||||||
Less: Business tax and related surcharges | (61,686) | (89,290) | (22,538) | (66,752) | (97,003) | (15,435) | (23,683) | (73,320) | ||||||||
Net revenues | 926,346 | 1,360,652 | 354,840 | 1,005,812 | 1,501,407 | 238,894 | 375,182 | 1,126,225 | ||||||||
Operating costs and expenses: | ||||||||||||||||
Leased-and-operated hotel costs - | ||||||||||||||||
Rents and utilities | (269,017) | (450,155) | (149,278) | (300,877) | (496,559) | (79,010) | (165,845) | (330,714) | ||||||||
Personnel costs | (159,394) | (267,645) | (74,899) | (192,746) | (269,260) | (42,843) | (76,527) | (192,733) | ||||||||
Depreciation and amortization | (90,746) | (148,524) | (43,141) | (105,383) | (156,294) | (24,869) | (41,830) | (114,464) | ||||||||
Consumables, food and beverage | (57,176) | (87,207) | (25,433) | (61,774) | (96,555) | (15,363) | (25,258) | (71,297) | ||||||||
Others | (98,011) | (168,848) | (58,509) | (110,339) | (195,247) | (31,067) | (58,254) | (136,993) | ||||||||
Total leased-and-operated hotel costs | (674,344) | (1,122,379) | (351,261) | (771,118) | (1,213,915) | (193,152) | (367,715) | (846,200) | ||||||||
Personnel costs of Franchised-and-managed hotels | (25,370) | (32,811) | (5,987) | (26,824) | (45,046) | (7,167) | (7,894) | (37,152) | ||||||||
Sales and marketing expenses | (16,067) | (15,559) | (1,777) | (13,782) | (18,351) | (2,920) | (2,405) | (15,946) | ||||||||
General and administrative expenses | (112,082) | (74,005) | (11,612) | (62,393) | (77,850) | (12,387) | (9,221) | (68,629) | ||||||||
Total operating costs and expenses | (827,863) | (1,244,754) | (370,637) | (874,117) | (1,355,162) | (215,626) | (387,235) | (967,927) | ||||||||
Other income | - | 4,528 | 92 | 4,436 | 7,742 | 1,232 | 239 | 7,503 | ||||||||
Income/(loss) from operations | 98,483 | 120,426 | (15,705) | 136,131 | 153,987 | 24,500 | (11,814) | 165,801 | ||||||||
Interest income | 6,756 | 3,336 | 317 | 3,019 | 615 | 98 | 190 | 425 | ||||||||
Interest expenses | (6,007) | (43,919) | (202) | (43,717) | (27,182) | (4,325) | (177) | (27,005) | ||||||||
Loss from equity investment | - | (843) | (843) | (466) | (74) | (467) | ||||||||||
Gain/(loss) on change in fair value of convertible notes | 121,194 | 9,823 | - | 9,823 | (26,765) | (4,259) | - | (26,765) | ||||||||
Non-operating income | 21,088 | 13,820 | 2,166 | 11,654 | 11,044 | 1,758 | 2,136 | 8,908 | ||||||||
Non-operating expenses | - | - | - | - | (7,818) | (1,244) | - | (7,818) | ||||||||
Foreign exchange loss, net | (756) | (10,263) | (267) | (9,996) | (6,748) | (1,074) | (212) | (6,536) | ||||||||
Income/(loss) before income tax expenses and noncontrolling interests | 240,758 | 92,380 | (14,534) | 106,914 | 96,667 | 15,380 | (10,344) | 107,010 | ||||||||
Income tax expense | (75,162) | (54,169) | (4,766) | (49,403) | (62,255) | (9,906) | (4,239) | (58,016) | ||||||||
Net income/(loss) | 165,596 | 38,211 | (19,300) | 57,511 | 34,412 | 5,474 | (14,583) | 48,994 | ||||||||
Less:Net income attributable to noncontrolling interests | (1,333) | (1,800) | - | (1,800) | (703) | (112) | - | (703) | ||||||||
Net income/(loss) attributable to Home Inns Group's shareholders | 164,263 | 36,411 | (19,300) | 55,711 | 33,709 | 5,362 | (14,583) | 48,291 | ||||||||
Earnings per share | ||||||||||||||||
———— Basic | 2.00 | 0.40 | 0.61 | 0.37 | 0.06 | 0.53 | ||||||||||
———— Diluted | 0.31 | 0.37 | 0.57 | 0.37 | 0.06 | 0.52 | ||||||||||
Weighted average ordinary shares outstanding | ||||||||||||||||
———— Basic | 82,311 | 90,753 | 90,753 | 90,771 | 90,771 | 90,771 | ||||||||||
———— Diluted | 92,276 | 100,045 | 100,045 | 92,600 | 92,600 | 92,600 | ||||||||||
Share-based compensation expense was included in the statement of operations as follows: | ||||||||||||||||
Leased-and-operated hotel costs - Personnel costs | 1,647 | 2,181 | 461 | 1,720 | 2,025 | 322 | 261 | 1,764 | ||||||||
Personnel costs of Franchised-and-managed hotels | 1,660 | 2,529 | 550 | 1,979 | 2,410 | 383 | 313 | 2,097 | ||||||||
Sales and marketing expenses | 339 | 400 | - | 400 | 407 | 65 | - | 407 | ||||||||
General and administrative expenses | 16,476 | 19,630 | 965 | 18,665 | 19,195 | 3,054 | 545 | 18,650 | ||||||||
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2848 | ||||||||||||||||
on September 30, 2012, representing the certificated exchange rate published by the Federal Reserve Board. | ||||||||||||||||
Note 2: The Company started consolidation of the operating results of Motel 168 effective October 1,2011, therefore the acquisition had no impact on the third quarter of 2011. |
Home Inns & Hotels Management Inc. | ||||||||||||||||||||||||||||||||
Reconciliation of GAAP and Non-GAAP Results | ||||||||||||||||||||||||||||||||
Quarter Ended September 30, 2012 | Quarter Ended September 30, 2012(excluding Motel 168) | |||||||||||||||||||||||||||||||
GAAP | %of Total | Share-based | Acquisition | Integration | %of Total | Non-GAAP Result | %of Total | GAAP | %of Total | Share-based | Acquisition | Integration | %of Total Rev | Non-GAAP Result | %of Total | |||||||||||||||||
RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | |||||||||||||||||||||||
Leased-and-operated hotel costs | (1,213,915) | 75.9% | 2,025 | - | 25,406 | 1.7% | (1,186,484) | 74.2% | (846,200) | 70.5% | 1,764 | - | 7,714 | 0.8% | (836,722) | 69.8% | ||||||||||||||||
Personnel costs of Franchised-and-managed hotels | (45,046) | 2.8% | 2,410 | - | - | 0.2% | (42,636) | 2.7% | (37,152) | 3.1% | 2,097 | - | - | 0.2% | (35,055) | 2.9% | ||||||||||||||||
Sales and marketing expenses | (18,351) | 1.1% | 407 | - | - | 0.0% | (17,944) | 1.1% | (15,946) | 1.3% | 407 | - | - | 0.0% | (15,539) | 1.3% | ||||||||||||||||
General and administrative expenses | (77,850) | 4.9% | 19,195 | - | 1,224 | 1.3% | (57,431) | 3.6% | (68,629) | 5.7% | 18,650 | - | - | 1.6% | (49,979) | 4.2% | ||||||||||||||||
Total operating costs and expenses | (1,355,162) | 84.8% | 24,037 | - | 26,630 | 3.2% | (1,304,495) | 81.6% | (967,927) | 80.7% | 22,918 | - | 7,714 | 2.6% | (937,295) | 78.1% | ||||||||||||||||
Income from operations | 153,987 | 9.6% | 24,037 | - | 26,630 | 3.2% | 204,654 | 12.8% | 165,801 | 13.8% | 22,918 | - | 7,714 | 2.6% | 196,433 | 16.4% | ||||||||||||||||
Quarter Ended September 30, 2012 | Quarter Ended September 30, 2012(excluding Motel 168) | |||||||||||||||||||||||||||||||
GAAP | %of Total | Share-based | Acquisition | Integration | %of Total Rev | Non-GAAP Result | %of Total | GAAP | %of Total | Share-based | Acquisition | Integration | %of Total Rev | Non-GAAP Result | %of Total | |||||||||||||||||
US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | |||||||||||||||||||||||
Leased-and-operated hotel costs | (193,152) | 75.9% | 322 | - | 4,042 | 1.7% | (188,788) | 74.2% | (134,642) | 70.5% | 281 | - | 1,227 | 0.8% | (133,134) | 69.8% | ||||||||||||||||
Personnel costs of Franchised-and-managed hotels | (7,167) | 2.8% | 383 | - | - | 0.2% | (6,784) | 2.7% | (5,911) | 3.1% | 334 | - | - | 0.2% | (5,578) | 2.9% | ||||||||||||||||
Sales and marketing expenses | (2,920) | 1.1% | 65 | - | - | 0.0% | (2,855) | 1.1% | (2,537) | 1.3% | 65 | - | - | 0.0% | (2,472) | 1.3% | ||||||||||||||||
General and administrative expenses | (12,387) | 4.9% | 3,054 | - | 195 | 1.3% | (9,138) | 3.6% | (10,920) | 5.7% | 2,967 | - | - | 1.6% | (7,952) | 4.2% | ||||||||||||||||
Total operating costs and expenses | (215,626) | 84.8% | 3,824 | - | 4,237 | 3.2% | (207,565) | 81.6% | (154,011) | 80.7% | 3,647 | - | 1,227 | 2.6% | (149,137) | 78.1% | ||||||||||||||||
Income from operations | 24,500 | 9.6% | 3,824 | - | 4,237 | 3.2% | 32,561 | 12.8% | 26,381 | 13.8% | 3,647 | - | 1,227 | 2.6% | 31,255 | 16.4% | ||||||||||||||||
Quarter Ended June 30, 2012 | Quarter Ended June 30, 2012(excluding Motel 168) | |||||||||||||||||||||||||||||||
GAAP | %of Total | Share-based | Acquisition | Integration | %of Total Rev | Non-GAAP Result | %of Total | GAAP | %of Total | Share-based | Acquisition | Integration | %of Total Rev | Non-GAAP Result | %of Total | |||||||||||||||||
RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | |||||||||||||||||||||||
Leased-and-operated hotel costs | (1,122,379) | 77.4% | 2,181 | - | 23,942 | 1.8% | (1,096,256) | 75.6% | (771,118) | 71.9% | 1,720 | - | - | 0.2% | (769,398) | 71.7% | ||||||||||||||||
Personnel costs of Franchised-and-managed hotels | (32,811) | 2.3% | 2,529 | - | - | 0.2% | (30,282) | 2.1% | (26,824) | 2.5% | 1,979 | - | - | 0.2% | (24,845) | 2.3% | ||||||||||||||||
Sales and marketing expenses | (15,559) | 1.1% | 400 | - | 48 | 0.0% | (15,111) | 1.0% | (13,782) | 1.3% | 400 | - | - | 0.0% | (13,382) | 1.2% | ||||||||||||||||
General and administrative expenses | (74,005) | 5.1% | 19,630 | - | 1,288 | 1.4% | (53,087) | 3.7% | (62,393) | 5.8% | 18,665 | - | - | 1.7% | (43,728) | 4.1% | ||||||||||||||||
Total operating costs and expenses | (1,244,754) | 85.8% | 24,740 | - | 25,278 | 3.4% | (1,194,736) | 82.4% | (874,117) | 81.5% | 22,764 | - | - | 2.1% | (851,353) | 79.4% | ||||||||||||||||
Income from operations | 120,426 | 8.3% | 24,740 | - | 25,278 | 3.4% | 170,444 | 11.8% | 136,131 | 12.7% | 22,764 | - | - | 2.1% | 158,895 | 14.8% | ||||||||||||||||
Quarter Ended September 30, 2011 | ||||||||||||||||||||||||||||||||
GAAP | %of Total | Share-based | Acquisition | Integration | %of Total Rev | Non-GAAP Result | %of Total | |||||||||||||||||||||||||
RMB '000 | RMB '000 | RMB '000 | RMB '000 | RMB '000 | ||||||||||||||||||||||||||||
Leased-and-operated hotel costs | (674,344) | 68.3% | 1,647 | - | - | 0.2% | (672,697) | 68.1% | ||||||||||||||||||||||||
Personnel costs of Franchised-and-managed hotels | (25,370) | 2.6% | 1,660 | - | - | 0.2% | (23,710) | 2.4% | ||||||||||||||||||||||||
Sales and marketing expenses | (16,067) | 1.6% | 339 | - | - | 0.0% | (15,728) | 1.6% | ||||||||||||||||||||||||
General and administrative expenses | (112,082) | 11.3% | 16,476 | 41,392 | - | 5.9% | (54,214) | 5.5% | ||||||||||||||||||||||||
Total operating costs and expenses | (827,863) | 83.8% | 20,122 | 41,392 | - | 6.2% | (766,349) | 77.6% | ||||||||||||||||||||||||
Income from operations | 98,483 | 10.0% | 20,122 | 41,392 | - | 6.2% | 159,997 | 16.2% | ||||||||||||||||||||||||
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2848 on September 30, 2012, representing the certificated exchange rate published by the Federal Reserve Board. |
Home Inns & Hotels Management Inc. | ||||||||||||
Reconciliation of GAAP and Non-GAAP Results (continued) | ||||||||||||
Quarter Ended | ||||||||||||
September 30, 2011 | June 30, 2012 | September 30, 2012 | ||||||||||
RMB '000 | RMB '000 | RMB'000 | RMB '000 | US$ '000 | RMB'000 | |||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||
Net income attributable to Home Inns Group's shareholders (GAAP) | 164,263 | 36,411 | 55,711 | 33,709 | 5,362 | 48,291 | ||||||
Foreign exchange loss, net | 756 | 10,263 | 9,996 | 6,748 | 1,074 | 6,536 | ||||||
Share-based compensation | 20,122 | 24,740 | 22,764 | 24,037 | 3,824 | 22,918 | ||||||
Acquisition expenses -- Motel 168 | 41,392 | - | - | - | - | - | ||||||
Integration cost | - | 25,278 | - | 26,630 | 4,237 | 7,714 | ||||||
Interest expenses -- Upfront fee amortization of term loans | - | 25,290 | 25,290 | 10,126 | 1,611 | 10,126 | ||||||
Non-operating (income)/expenses-- (Gain)/loss on change in fair value of interest swap contracts | - | (3,689) | (3,689) | 7,818 | 1,244 | 7,818 | ||||||
(Gain)/loss on change in fair value of convertible notes | (121,194) | (9,823) | (9,823) | 26,765 | 4,259 | 26,765 | ||||||
Withholding tax for profit distribution of previous periods | 26,693 | - | - | - | - | - | ||||||
Adjusted net income attributable to Home Inns Group's shareholders (Non-GAAP) | 132,032 | 108,470 | 100,249 | 135,833 | 21,611 | 130,168 | ||||||
Quarter Ended | ||||||||||||
September 30, 2011 | June 30, 2012 | September 30, 2012 | ||||||||||
RMB '000 | RMB '000 | RMB'000 | RMB '000 | US$ '000 | RMB'000 | |||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||
Earnings per share (GAAP) | ||||||||||||
———— Basic | 2.00 | 0.40 | 0.61 | 0.37 | 0.06 | 0.53 | ||||||
———— Diluted | 0.31 | 0.37 | 0.57 | 0.37 | 0.06 | 0.52 | ||||||
Weighted average ordinary shares outstanding | ||||||||||||
———— Basic | 82,311 | 90,753 | 90,753 | 90,771 | 90,771 | 90,771 | ||||||
———— Diluted | 92,276 | 100,045 | 100,045 | 92,600 | 92,600 | 92,600 | ||||||
Adjusted earnings per share (Non-GAAP) | ||||||||||||
———— Basic | 1.60 | 1.20 | 1.10 | 1.50 | 0.24 | 1.43 | ||||||
———— Diluted | 1.43 | 1.08 | 1.00 | 1.47 | 0.23 | 1.41 | ||||||
Weighted average ordinary shares outstanding | ||||||||||||
———— Basic | 82,311 | 90,753 | 90,753 | 90,771 | 90,771 | 90,771 | ||||||
———— Diluted | 92,276 | 100,045 | 100,045 | 92,600 | 92,600 | 92,600 | ||||||
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2848 | ||||||||||||
on September 30, 2012, representing the certificated exchange rate published by the Federal Reserve Board. | ||||||||||||
Note 2: The non-GAAP adjustment items do not include the tax impact. |
Home Inns & Hotels Management Inc. | ||||||||||||
Reconciliation of GAAP and Non-GAAP Results (continued) | ||||||||||||
Quarter Ended | ||||||||||||
September 30, 2011 | June 30, 2012 | September 30, 2012 | ||||||||||
RMB '000 | RMB '000 | RMB'000 | RMB '000 | US$ '000 | RMB'000 | |||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||
Net income attributable to Home Inns Group's shareholders | 164,263 | 36,411 | 55,711 | 33,709 | 5,362 | 48,291 | ||||||
Interest income | (6,756) | (3,336) | (3,019) | (615) | (98) | (425) | ||||||
Interest expenses | 6,007 | 43,919 | 43,717 | 27,182 | 4,325 | 27,005 | ||||||
Income tax expense | 75,162 | 54,169 | 49,403 | 62,255 | 9,906 | 58,016 | ||||||
Depreciation and amortization | 93,141 | 153,623 | 109,245 | 161,006 | 25,618 | 117,680 | ||||||
EBITDA (Non-GAAP) | 331,817 | 284,786 | 255,057 | 283,537 | 45,113 | 250,567 | ||||||
Foreign exchange loss, net | 756 | 10,263 | 9,996 | 6,748 | 1,074 | 6,536 | ||||||
Share-based compensation | 20,122 | 24,740 | 22,764 | 24,037 | 3,824 | 22,918 | ||||||
Acquisition expenses -- Motel 168 | 41,392 | - | - | - | - | - | ||||||
Integration cost | - | 25,278 | - | 26,630 | 4,237 | 7,714 | ||||||
Non-operating (income)/expenses-- (Gain)/loss on change in fair value of interest swap contracts | - | (3,689) | (3,689) | 7,818 | 1,244 | 7,818 | ||||||
(Gain)/loss on change in fair value of convertible notes | (121,194) | (9,823) | (9,823) | 26,765 | 4,259 | 26,765 | ||||||
Adjusted EBITDA (Non-GAAP) | 272,893 | 331,555 | 274,305 | 375,535 | 59,751 | 322,318 | ||||||
%of total revenue | 27.6% | 22.9% | 25.6% | 23.5% | 23.5% | 26.9% | ||||||
Note 1: The "Depreciation and amortization expense" includes the depreciation and amortization expenses of the Group. | ||||||||||||
The depreciation and amortization expenses of all leased-and-operated hotels are included in "Operating costs and expenses". | ||||||||||||
The depreciation and amortization expenses of administrative long-term assets are included in "General and administrative expenses". |
Home Inns & Hotels Management Inc. | ||||||||||||||
Operating Data | ||||||||||||||
As of and for the quarter ended | ||||||||||||||
September 30, 2011 | June 30, 2012 | September 30, 2012 | ||||||||||||
Excluding Motel 168 | Group | Motel 168 | Excluding Motel 168 | Group | Motel 168 | Excluding Motel 168 | ||||||||
Total Hotels in operation: | 1,004 | 1,580 | 316 | 1,264 | 1,682 | 321 | 1,361 | |||||||
Leased-and-operated hotels | 500 | 733 | 144 | 589 | 770 | 146 | 624 | |||||||
Franchised-and-managed hotels | 504 | 847 | 172 | 675 | 912 | 175 | 737 | |||||||
Total rooms | 114,792 | 193,105 | 48,358 | 144,747 | 204,678 | 48,619 | 156,059 | |||||||
Occupancy rate (as a percentage) | 94.1% | 89.2% | 80.8% | 92.1% | 90.3% | 82.7% | 92.7% | |||||||
Average daily rate (in RMB) | 180 | 167 | 159 | 170 | 174 | 162 | 177 | |||||||
RevPAR (in RMB) | 169 | 149 | 129 | 157 | 157 | 134 | 164 | |||||||
Like-for-like performance for hotels opened for at least 18 months during the current quarter | ||||||||||||||
As of and for the quarter ended | ||||||||||||||
September 30, 2011 | September 30, 2012 | |||||||||||||
Excluding Motel 168 | Excluding Motel 168 | |||||||||||||
Total Hotels in operation: | 833 | 833 | ||||||||||||
Leased-and-operated hotels | 446 | 446 | ||||||||||||
Franchised-and-managed hotels | 387 | 387 | ||||||||||||
Total rooms | 95,740 | 96,479 | ||||||||||||
Occupancy rate (as a percentage) | 97.7% | 97.3% | ||||||||||||
Average daily rate (in RMB) | 181 | 182 | ||||||||||||
RevPAR (in RMB) | 177 | 177 | ||||||||||||
The Company did not participate in the operating of Motel 168 before the 4th quarter 2011, therefore the above like-for-like performance figures do not include Motel 168 hotels. | ||||||||||||||
* "Occupancy rate" refers to the total number of occupied rooms divided by the total number of available rooms in a given period. | ||||||||||||||
"Average daily rate" refers to total hotel room revenues divided by the total number of occupied rooms in a given period. | ||||||||||||||
"RevPAR" represents revenue per available room, which is calculated by dividing total hotel room revenues by the total number of available rooms in a given period, or by multiplying average daily rates and occupancy rates in a given period. |