Quarterly Revenues Increased 43% Year-over-year to RMB 642 Million (US$ 94.0 Million)
Home Inns Chain Consisted of 547 Hotels in Operation as of June 30, 2009
SHANGHAI, Aug. 6 /PRNewswire-Asia/ -- Home Inns & Hotels Management Inc. (Nasdaq: HMIN), a leading economy hotel chain in China, today announced its unaudited financial results for the second quarter ended June 30, 2009.
Second Quarter 2009 Financial Highlights
-- Total revenues for the quarter increased 43.3% year-over-year to RMB
642.1 million (US$ 94.0 million).
-- Net income attributable to shareholders for the quarter was RMB 100.4
million (US$ 14.7 million), including gain on buy-back of its own
convertible bonds of RMB 46.5 million (US$ 6.8 million), share-based
compensation expenses of RMB 6.4 million (US$ 0.9 million), and foreign
exchange loss of RMB 0.3 million (US$ 0.04 million). This compares to a
net income attributable to shareholders of RMB 7.5 million in the
second quarter of 2008, which included share based compensation of RMB
5.4 million (US$ 0.8 million) and foreign exchange loss of RMB 13.7
million (US$ 2.0 million).
-- Income from operations for the quarter was RMB 67.7 million (US$ 9.9
million), compared to income from operations of RMB 31.3 million (US$
4.6 million) in the same period of 2008. Income from operations
excluding share-based compensation expenses (non-GAAP) was RMB 74.1
million (US$ 10.9 million) for the quarter, compared to RMB 36.7
million (US$ 5.4 million) in the same period of 2008, representing an
increase of 102% year-over-year.
-- EBITDA (non-GAAP) for the quarter was RMB 188.9 million (US$ 27.7
million). Excluding gain on buy-back of convertible bonds, foreign
exchange loss and share-based compensation expenses, adjusted EBITDA
(non-GAAP) for the quarter was RMB 149.0 million (US$ 21.8 million),
compared to RMB 82.2 million (US$ 12.0 million) in the same period of
2008, representing an increase of 81.4% year-over-year.
-- Diluted earnings per ADS for the quarter were RMB 1.40 (US$ 0.21).
Adjusted diluted earnings per ADS (Non-GAAP) for the quarter were RMB
1.55 (US$ 0.23). Both diluted earnings per ADS and adjusted diluted
earnings per ADS exclude gain on buy-back of convertible bonds. As used
in this press release, adjusted diluted earnings per ADS (non-GAAP)
also exclude foreign exchange loss and share-based compensation
expenses. Please refer to "Reconciliations of GAAP and Non-GAAP
Results" at the end of this press release.
"Home Inns has started to realize the benefits of the strategic decisions we made in response to the financial downturn, which has affected our business since the fourth quarter of 2008. Our prudent development plans and the maturity of the hotels we opened last year, together with higher than expected revenues due to the easing of the economic situation towards the end of the quarter, resulted in our improved overall operational performance and profitability," remarked Mr. David Sun, Home Inns’ Chief Executive Officer.
Second Quarter of 2009 Operational Highlights
-- During the second quarter of 2009, Home Inns opened 25 net new hotels,
including 15 net leased-and-operated hotels and 10 net
franchised-and-managed hotels. As of June 30, 2009, the Home Inns hotel
chain consisted of 547 hotels in operation with an average of 117 rooms
per hotel in operation. Home Inns’ hotels in operation cover 107 cities
in China and consist of 369 leased-and-operated hotels, including one H
Hotel (Home Inns’ premium brand hotel), and 178 franchised-and-managed
hotels.
-- As of June 30, 2009, Home Inns had an additional 17 leased-and-operated
hotels and 46 franchised-and-managed hotels contracted and under
development.
-- The occupancy rate for hotels in operation in the whole chain was 92.4%
in the second quarter of 2009, compared with 88.2% in the same period
in 2008, and 82.6% in the previous quarter. The increase year-over-year
was due to less dilutive impact from new hotels opened this year, as
new hotels as a proportion of the total number of hotels decreased from
last year. The increase sequentially was mainly due to a strong
business season in the second quarter. The improving economic
conditions also contributed to the increase.
-- RevPAR, defined as revenue per available room, was RMB 148 in the
second quarter of 2009, compared with RMB 153 in the same period in
2008 and RMB 130 in the previous quarter. The RevPAR decline
year-over-year was primarily due to a decrease in average daily rate,
or ADR. The decline in ADR was expected as Home Inns opens more hotels
in lower tier of cities, where room rates are lower. In addition,
selected hotels had downward price adjustment in response to the
economic slowdown and local conditions during the quarter, which also
contributed to a lower overall ADR compared to the same period in 2008.
The sequential increase was primarily due to seasonality.
-- RevPAR for Home Inns’ hotels which had been in operation for at least
18 months was RMB 168 for the second quarter of 2009, compared to RMB
175 for the same period in 2008. The decline was caused by lower ADR
during the quarter as described above, despite a higher occupancy rate.
"We believe our business has entered into a phase of stability and gradual recovery. We are well-positioned to execute on our strategy and we are committed to achieving a balance between growth and profitability. During the second quarter, this balance allowed us to open 25 new hotels and enter six new markets, while still demonstrating improved operational metrics and financial performance," continued Mr. Sun.
Second Quarter of 2009 Financial Results
For the second quarter of 2009, Home Inns’ total revenues increased by 43.3% year-over-year to RMB 642.1 million (US$ 94.0 million).
Total revenues from leased-and-operated hotels for the second quarter of 2009 were RMB 609.1 million (US$ 89.2 million), representing a 43.5% increase year-over-year and a 21.4% increase sequentially. The year-over-year increase was primarily the result of a larger leased-and-operated hotel portfolio, while the sequential increase was primarily a result of seasonality. Home Inns opened a net of 15 new leased-and-operated hotels during the second quarter of 2009.
Total revenues from franchised-and-managed hotels for the second quarter of 2009 were RMB 32.9 million (US$ 4.8 million), representing a 40.0% increase year-over-year and an 8.1% increase sequentially. Revenues from
franchised-and-managed hotels for the quarter increased as a result of the higher number of franchised-and-managed hotels in operation, partially offset by lower initiation fees recognized due to relatively limited number of new franchised-and-managed hotels openings in the quarter. Home Inns opened a net of 10 new franchised-and-managed hotels during the second quarter of 2009.
Total operating costs and expenses for the second quarter of 2009 were RMB 534.9 million (US$ 78.3 million). Total operating costs and expenses excluding share-based compensation expenses (non-GAAP) for the quarter were RMB 528.4 million (US$ 77.4 million), or 82.3% of total revenues, representing a 37.2% increase year-over-year and a 3.9% increase sequentially. Major components of operating costs and expenses are described and discussed in more detail below.
Total leased-and-operated hotel costs for the second quarter of 2009 were RMB 486.1 million (US$ 71.2 million), representing 79.8% of the
leased-and-operated hotel revenues. This compared to 82.1% for the same quarter in 2008 and 93.7% for the previous quarter. The decrease in
leased-and-operated hotel costs as a percentage of leased-and-operated hotel revenue year-over-year was primarily due to fewer hotels under construction, resulting in substantially lower pre-opening expenses and fewer new hotels as a percentage of total hotels this year. The decease sequentially was mainly due to higher RevPAR and hence higher revenues, as well as lower utility costs for heating in the second quarter.
Sales and marketing expenses for the second quarter of 2009 were RMB 5.2 million (US$ 0.8 million), a decrease of 3.9% year-over-year and a decrease of 39.5% sequentially. The decrease year-over-year was due to a less aggressive marketing plan this year, and the sequential decrease was due to a chain-wide promotion program that ended in March.
General and administrative expenses for the second quarter of 2009 were RMB 43.5 million (US$ 6.4 million). General and administrative expenses excluding share-based compensation expenses (non-GAAP) were RMB 37.0 million (US$ 5.4 million), or 5.8% of the total revenues, compared with 6.9% of the total revenues in the same period of 2008 and 5.6% in the previous quarter.
Income from operations for the quarter was RMB 67.7 million (US$ 9.9 million). Income from operations excluding share-based compensation expenses (non-GAAP) was RMB 74.1 million (US$ 10.9 million), compared to RMB 36.7 million (US$ 5.4 million) in the same period of 2008. Home Inns had a loss from operations excluding share-based compensation expenses (non-GAAP) of RMB 9.0 million (US$ 1.3 million) in the previous quarter. The major reasons that led to higher income from operations were higher revenues and better
leased-and-operated hotel expense ratios, as discussed above.
EBITDA (non-GAAP) for the second quarter of 2009 was RMB 188.9 million (US$ 27.7 million). Excluding gain on buy-back of convertible bonds, foreign exchange loss and share-based compensation expenses, adjusted EBITDA (non-GAAP) was RMB 149.0 million (US$ 21.8 million), an increase of 81.4% from the same period a year ago and an increase of 146.6% sequentially.
Net income attributable to shareholders for the quarter was RMB 100.4 million (US$ 14.7 million). Excluding gain on buy-back of convertible bonds, foreign exchange loss and share-based compensation expenses, adjusted net income attributable to shareholders (non-GAAP) for the second quarter of 2009 was RMB 60.6 million (US$ 8.9 million).
For the second quarter of 2009, basic earnings per share were RMB 1.37 (US$ 0.20), while diluted earnings per share were RMB 0.70 (US$ 0.10). Basic earnings per ADS were RMB 2.74 (US$ 0.40), while diluted earnings per ADS were RMB 1.40 (US$ 0.21). The difference between basic and diluted earnings per share and per ADS was caused by excluding large gain on buy-back of convertible bonds in the diluted earnings calculation under US GAAP. Excluding gain on buy-back of convertible bonds, foreign exchange loss and share-based compensation expenses, adjusted basic earnings per share (non-GAAP) were RMB 0.83 (US$ 0.12), while adjusted diluted earnings per share (non-GAAP) were RMB 0.78 (US$ 0.11). Adjusted basic earnings per ADS (non-GAAP) were RMB 1.65 (US$ 0.24), and adjusted diluted earnings per ADS (non-GAAP) were RMB 1.55 (US$ 0.23).
Net operating cash flow for the second quarter of 2009 was RMB 180.5 million (US$ 26.4 million). Capital expenditures for the quarter were RMB 60.9 million (US$ 8.9 million). Cash spent on the purchase of property and equipment was RMB 99.6 million (US$ 14.6 million), resulting from both new capital expenditure and reduction in payables.
As of June 30, 2009, Home Inns had cash and cash equivalents of RMB 624.6 million (US$ 91.4 million), including US$ 50 million in cash received from Ctrip.com International Ltd. ("Ctrip") for an equity private placement transaction previously announced. The transaction closed in the second quarter of 2009, resulting in Home Inns’ issuing 7,514,503 ordinary shares to Ctrip. As of June 30, 2009, Home Inns had RMB 477.7 million (US$ 69.9 million) convertible bonds outstanding, including principal and accrued interest. During the second quarter of 2009, Home Inns repurchased and retired RMB 362.0 million (US$ 53.0 million) of these convertible bonds.
Outlook for Third Quarter of 2009
Home Inns expects its total revenues in the third quarter of 2009 to be in the range of RMB 685 million (US$ 100.3 million) to RMB 705 million (US$ 103.2 million). Home Inns now expects its total revenues for the full year of 2009 to grow between 33-35% over 2008, an increase from the 28-33% guidance it previously announced when it discussed its 2008 year-end results in March 2009, reflecting the impact from the recent improvement in economic and operating environment. This forecast reflects Home Inns’ current and preliminary view, which is subject to change.
Conference Call Information
Home Inns’ management will hold an earnings conference call at 9 PM on August 5, 2009, U.S. Eastern Daylight Time (9 AM on August 6, 2009, Beijing/Hong Kong time).
Dial-in details for the earnings conference call are as follows:
China Mainland (toll free): +10-800-130-0399
Hong Kong: +852-3002-1672
U.S. (toll free): +1-800-299-6183
U.S. and International: +1-617-801-9713
Passcode for all regions: Home Inns
A replay of the conference call may be accessed by phone at the following numbers until the end of August 12, 2009, U.S. Eastern Daylight Time.
U.S. toll free: +1-888-286-8010
International: +1-617-801-6888
Passcode: 780-20-676
Live and archived webcasts of this conference call will be available at http://english.homeinns.com .
About Home Inns
Home Inns is a leading economy hotel chain in China based on the number of hotels and hotel rooms, as well as the geographic coverage of the hotel chain. Since Home Inns commenced operations in 2002, it has become one of the best-known economy hotel brands in China. Home Inns offers a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Home Inns’ ADSs, each of which represents two ordinary shares, are currently trading on the NASDAQ Global Market under the symbol "HMIN." For more information about Home Inns, please visit http://english.homeinns.com .
Safe Harbor
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. 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; and the expected growth of the lodging market in China; 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 do we purport it 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.
Non-GAAP Financial Measures
To supplement Home Inns’ unaudited consolidated financial results presented in accordance with U.S. GAAP, Home Inns uses the following non-GAAP measures defined as non-GAAP financial measures by the SEC: total operating expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, income from operations excluding share-based expenses, adjusted net income attributable to shareholders excluding foreign exchange gain or loss,
share-based compensation and gain on buy-back of convertible bonds, adjusted basic and diluted earnings and ADS per share excluding foreign exchange gain or loss, share-based compensation and gain on buy-back of convertible bonds, EBITDA and adjusted EBITDA excluding foreign exchange gain or loss,
share-based compensation and gain on buy-back of convertible bonds. 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 believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity and both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. Home Inns computes the non-GAAP financial measures using the same consistent method from quarter to quarter. One of the limitations of using non-GAAP financial measures is the exclusion of
share-based compensation expenses, which have been and will continue to be a significant recurring expense in its business. Management compensates for this and other limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables provide additional details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
Management also believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization, is a useful financial metric to assess Home Inns’ 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 by investors as a measure of Home Inns’ financial performance. EBITDA will provide investors with a useful tool for comparability between periods because it eliminates depreciation and amortization expense attributable to capital expenditures.
One of the limitations of using non-GAAP adjusted gross profit, adjusted EBITDA and adjusted net income is that they do not include all items that impact Home Inns’ net income for the period. In addition, its 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 does. The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that Home Inns’ future results will be unaffected by other charges and gains Home Inns considers to be outside the ordinary course of its business.
Reconciliations of GAAP and non-GAAP results are included at the end of this press release.
For investor and media inquiries, please contact:
Home Inns & Hotels Management Inc.
Ethan Ruan
Tel: +86-21-3401-9898 x2004
Email: zjruan@homeinns.com
FD Beijing
Peter Schmidt
Tel: +86-10-8591-1953
Email: peter.schmidt@fd.com
Home Inns & Hotels Management Inc.
Consolidated Balance Sheet Information
December 31, June 30,
2008 2009
RMB ‘000 RMB ‘000 US$ ‘000
(audited) (unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents 608,445 624,617 91,449
Short-term investment 100,000 -- --
Accounts receivable 23,263 32,021 4,688
Receivables from related parties 1,617 2,747 402
Consumables 26,885 21,731 3,182
Prepayments and other current assets,
net of allowance 63,904 38,129 5,582
Deferred tax assets, current 41,824 62,228 9,111
Total current assets 865,938 781,473 114,414
Property and equipment, net 1,950,900 1,973,241 288,899
Goodwill 390,882 390,882 57,228
Intangible assets, net 44,977 44,212 6,473
Other assets 33,177 33,651 4,927
Deferred tax assets, non-current 77,580 84,323 12,346
Total assets 3,363,454 3,307,782 484,287
LIABILITIES
Current liabilities:
Accounts payable 22,438 19,492 2,854
Payables to related parties 6,668 6,401 937
Short-term borrowings -- 10,000 1,464
Salaries and welfare payable 69,635 66,361 9,716
Income tax payable 52,458 61,828 9,052
Other taxes payable 12,691 14,672 2,148
Deferred revenues 38,082 47,231 6,915
Accruals for customer reward program 8,587 11,709 1,714
Other unpaid and accruals 52,220 59,104 8,653
Other payables 376,739 227,797 33,351
Total current liabilities 639,518 524,595 76,804
Deferred rental 136,825 143,736 21,044
Deferred revenues, non-current 22,697 32,016 4,687
Deposits from franchised-and-managed
hotels 13,741 16,341 2,392
Unfavorable lease liability 16,017 15,301 2,240
Convertible bond 895,696 477,688 69,938
Deferred tax liability, non-current 12,279 11,903 1,743
Total liabilities 1,736,773 1,221,580 178,848
Commitments and contingencies
Shareholders’ equity
Ordinary shares (US$0.005 par value;
200,000,000 shares authorized,
71,212,795 and 79,068,500 shares
issued and outstanding as of
December 31, 2008 and June 30,
2009, respectively) 2,899 3,167 464
Additional paid-in capital 1,393,905 1,750,791 256,331
Statutory reserves 49,994 49,994 7,320
Retained earnings 160,810 261,694 38,314
Noncontrolling interest 19,073 * 20,556 3,010
Total shareholders’ equity 1,626,681 2,086,202 305,439
Total liabilities and shareholders’
equity 3,363,454 3,307,782 484,287
* Reflects implementation of SFAS No.160 Noncontrolling Interest in
Consolidated Financial Statements-an amendment of ARB No.51
Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
is based on the noon buying rate of US$1.00=RMB6.8302 on June 30,
2009 in The City of New York for cable transfers of RMB as
certified for customs purpose by Federal Reserve Bank of New York.
Home Inns & Hotels Management Inc.
Consolidated Statement of Operations Information
Quarter Ended
June 30, March 31, June 30,
2008 2009 2009
RMB ‘000 RMB ‘000 RMB ‘000 US$ ‘000
(unaudited)(unaudited)(unaudited)(unaudited)
Revenues:
Leased-and-operated hotels 424,569 501,735 609,136 89,183
Franchised-and-managed hotels 23,521 30,472 32,930 4,821
Total revenues 448,090 532,207 642,066 94,004
Less: Business tax and
related surcharges (26,359) (32,674) (39,507) (5,784)
Net revenues 421,731 499,533 602,559 88,220
Operating costs and expenses:
Leased-and-operated hotel costs -
Rents and utilities (149,429) (205,827) (186,668) (27,330)
Personnel costs* (82,175) (108,965) (114,950) (16,830)
Depreciation and amortization (43,961) (67,499) (69,833) (10,223)
Consumables, food and beverage (31,851) (37,720) (42,811) (6,268)
Others (41,274) (49,961) (71,871) (10,523)
Total leased-and-operated hotel
costs (348,690) (469,972) (486,133) (71,174)
Sales and marketing expenses (5,454) (8,668) (5,243) (768)
General and administrative
expenses* (36,307) (37,970) (43,474) (6,365)
Total operating costs and
expenses (390,451) (516,610) (534,850) (78,307)
Income/(loss) from operations 31,280 (17,077) 67,709 9,913
Interest income 5,935 3,254 1,002 147
Interest expense (7,435) (4,052) (3,142) (460)
Gain on buy-back of convertible
bond -- 16,406 46,540 6,814
Other non-operating income 1,666 446 4,672 684
Foreign exchange (loss)/gain, net (13,742) 44 (262) (38)
Income/(loss) before income tax
expense and noncontrolling
interests 17,704 (979) 116,519 17,060
Income tax (expense)/benefit (8,954) 1,971 (15,144) (2,217)
Net income 8,750 992 101,375 14,843
Noncontrolling interest (1,287) (540) (943) (138)
Net income attributable to
shareholders 7,463 452 100,432 14,705
Earnings per share
- Basic 0.11 0.01 1.37 0.20
- Diluted 0.10 (0.20) 0.70 0.10
Weighted average ordinary shares
outstanding
- Basic 70,821 71,338 73,347 73,347
- Diluted 72,743 76,376 77,983 77,983
* Share-based compensation expense
was included in the statement of
operations as follows:
Leased-and-operated hotel costs -
Personnel costs 3 -- -- --
General and administrative expenses 5,432 8,053 6,430 941
Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
is based on the noon buying rate of US$1.00=RMB6.8302 on June 30,
2009 in The City of New York for cable transfers of RMB as
certified for customs purpose by Federal Reserve Bank of New York.
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results
Quarter Ended June 30, 2009
Share-
%of based %of %of
GAAP Total Compen- Total Non-GAAP Total
Result Revenue sation Revenue Result Revenue
RMB ‘000 RMB ‘000 RMB ‘000
(unaudited) (unaudited) (unaudited)
Leased-and-
operated
hotel costs (486,133) 75.7% -- 0.0% (486,133) 75.7%
Sales and
marketing
expenses (5,243) 0.8% -- 0.0% (5,243) 0.8%
General and
administrative
expenses (43,474) 6.8% 6,430 1.0% (37,044) 5.8%
Total operating
costs and
expenses (534,850) 83.3% 6,430 1.0% (528,420) 82.3%
Income from
operations 67,709 10.6% 6,430 1.0% 74,139 11.6%
Quarter Ended June 30, 2009
Share-
%of based %of %of
GAAP Total Compen- Total Non-GAAP Total
Result Revenue sation Revenue Result Revenue
US$ ‘000 US$ ‘000 US$ ‘000
(unaudited) (unaudited) (unaudited)
Leased-and-
operated
hotel costs (71,174) 75.7% -- 0.0% (71,174) 75.7%
Sales and
marketing
expenses (768) 0.8% -- 0.0% (768) 0.8%
General and
administrative
expenses (6,365) 6.8% 941 1.0% (5,424) 5.8%
Total operating
costs and
expenses (78,307) 83.3% 941 1.0% (77,366) 82.3%
Income from
operations 9,913 10.6% 941 1.0% 10,854 11.6%
Quarter Ended March 31, 2009
Share-
%of based %of %of
GAAP Total Compen- Total Non-GAAP Total
Result Revenue sation Revenue Result Revenue
RMB ‘000 RMB ‘000 RMB ‘000
(unaudited) (unaudited) (unaudited)
Leased-and-
operated
hotel costs (469,972) 88.3% -- 0.0% (469,972) 88.3%
Sales and
marketing
expenses (8,668) 1.6% -- 0.0% (8,668) 1.6%
General and
administrative
expenses (37,970) 7.1% 8,053 1.5% (29,917) 5.6%
Total operating
costs and
expenses (516,610) 97.0% 8,053 1.5% (508,557) 95.6%
(Loss)/income
from operations (17,077) 3.2% 8,053 1.5% (9,024) 1.7%
Quarter Ended June 30, 2008
Share-
%of based %of %of
GAAP Total Compen- Total Non-GAAP Net
Result Revenue sation Revenue Result Revenue
RMB ‘000 RMB ‘000 RMB ‘000
(unaudited) (unaudited) (unaudited)
Leased-and-
operated
hotel costs (348,690) 77.8% 3 0.0% (348,688) 77.8%
Sales and
marketing
expenses (5,454) 1.2% -- 0.0% (5,454) 1.2%
General and
administrative
expenses (36,307) 8.1% 5,432 1.2% (30,875) 6.9%
Total operating
costs and
expenses (390,451) 87.1% 5,435 1.2% (385,017) 85.9%
Income from
operations 31,280 7.0% 5,435 1.2% 36,714 8.2%
Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
is based on the noon buying rate of US$1.00=RMB6.8302 on June 30,
2009 in The City of New York for cable transfers of RMB as
certified for customs purpose by Federal Reserve Bank of New York.
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended
June 30, March 31, June 30,
2008 2009 2009
RMB ‘000 RMB ‘000 RMB ‘000 US$ ‘000
(unaudited)(unaudited)(unaudited)(unaudited)
Net (loss)/income attributable
to shareholders (GAAP) 7,463 452 100,432 14,705
Foreign exchange loss/
(gain), net 13,742 (44) 262 38
Share-based compensation 5,435 8,053 6,430 941
Gain on buy-back of
convertible bond -- (16,406) (46,540) (6,814)
Adjusted net income/(loss)
attributable to shareholders
excluding foreign exchange
gain or loss, share-based
compensation and gain on
buy-back of convertible bond 26,640 (7,945) 60,584 8,870
Quarter Ended
June 30, March 31, June 30,
2008 2009 2009
RMB ‘000 RMB ‘000 RMB ‘000 US$ ‘000
(unaudited)(unaudited)(unaudited)(unaudited)
Earnings per share (GAAP)
- Basic 0.11 0.01 1.37 0.20
- Diluted 0.10 (0.20) 0.70 0.10
Weighted average ordinary shares
outstanding
- Basic 70,821 71,338 73,347 73,347
- Diluted 78,394 76,376 77,983 77,983
Earnings per share excluding
foreign exchange gain or loss,
share-based compensation and
gain on buy-back of convertible
bond
- Basic 0.38 (0.11) 0.83 0.12
- Diluted 0.36 (0.11) 0.78 0.11
Weighted average ordinary shares
outstanding
- Basic 70,821 71,338 73,347 73,347
- Diluted 78,394 71,338 77,983 77,983
Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
is based on the noon buying rate of US$1.00=RMB6.8302 on June 30,
2009 in The City of New York for cable transfers of RMB as
certified for customs purpose by Federal Reserve Bank of New York.
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended
June 30, March 31, June 30,
2008 2009 2009
RMB ‘000 RMB ‘000 RMB ‘000 US$ ‘000
(unaudited)(unaudited)(unaudited)(unaudited)
Net income attributable to
shareholders 7,463 452 100,432 14,705
Interest income (5,935) (3,254) (1,002) (147)
Interest expenses 7,435 4,052 3,142 460
Income tax expense/(benefit) 8,954 (1,971) 15,144 2,217
Depreciation and amortization 45,080 69,564 71,177 10,421
EBITDA (Non-GAAP) 62,997 68,843 188,893 27,656
Foreign exchange loss/
(gain), net 13,742 (44) 262 38
Share-based compensation 5,435 8,053 6,430 941
Gain on buy-back of convertible
bond -- (16,406) (46,540) (6,814)
EBITDA excluding foreign exchange
gain or loss, share-based
compensation and gain on
buy-back of convertible bond
(Non-GAAP) 82,173 60,446 149,045 21,821
%of total revenue 18.3% 11.4% 23.2% 23.2%
Home Inns & Hotels Management Inc.
Operating Data
As of and for the quarter ended
June 30, March 31, June 30,
2008 2009 2009
Total Hotels in operation: 366 522 547
Lease-and operated hotels 271 354 369
Franchised-and-managed hotels 95 168 178
Total rooms 44,088 61,045 63,968
Occupancy rate (as a percentage)* 88.2% 82.6% 92.4%
Average daily rate (in RMB)* 173 158 160
RevPAR (in RMB)* 153 130 148
Like-for-like performance for hotels opened for at least 18 months during
the current quarter
As of and for the quarter ended
June 30, 2008 June 30, 2009
Total Hotels in operation: 238 238
Lease-and-operated hotels 171 171
Franchised-and-managed hotels 67 67
Total rooms 28,604 28,604
Occupancy rate (as a percentage) 97.1% 98.0%
Average daily rate (in RMB) 180 171
RevPAR (in RMB) 175 168
* "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.
