BEIJING, Nov. 10 /Xinhua-PRNewswire/ -- eLong, Inc. (Nasdaq: LONG), a
leading online travel service provider in China, today reported unaudited
financial results for the third quarter ended September 30, 2006.
(Logo: http://www.prnasia.com/sa/20061103193112-91.jpg )
Business Highlights
-- Highlights for the third quarter of 2006:
-- Travel revenues increased 45% year-over-year and 11% sequentially to
RMB72.3 million (US$9.1 million), and total revenues improved 40% year-
over-year and 12% sequentially to RMB74.6 million (US$9.4 million);
-- Hotel commissions increased 38% year-over-year and 7% sequentially to
RMB57.4 million (US$7.3 million);
-- Air ticketing commissions increased 47% year-over-year and 15%
sequentially to RMB11.0 million (US$1.4 million);
-- The Company recorded an operating income of RMB1.7 million
(US$215,000),which included non cash related stock-based compensation
expense and amortization of intangibles of RMB2.6 million
(US$330,000), as compared to an operating loss of RMB7.0 million
(US$857,000) in the same period one year ago and an operating loss of
RMB1.2 million (US$143,000) in the second quarter of 2006;
-- The Company recorded a net income of RMB2.7 million (US$337,000) for
the third quarter of 2006, compared to a net loss of RMB40.5 million
(US$5.0 million) in the same period a year ago, and a net income of
RMB10.2 million (US$1.3 million) in the second quarter of 2006;
-- The Company recorded an adjusted income (a non-GAAP measure) of
RMB16.6 million (US$2.1 million) as compared to an adjusted income of
RMB4.9 million (US$609,000) in the same period a year ago and an
adjusted income of RMB13.1 million (US$1.6 million) in the second
quarter of 2006; and
-- As of September 30, 2006, the Company's cash and cash equivalents
balance was US$142.1 million, which included a prepayment from a
related party purchaser of US$2.9 million.
"We are extremely pleased that eLong has delivered another record quarter
with healthy growth in both hotel booking and air ticketing, which resulted
from our relentless focus on execution and improving customer experience.
Given the strong long-term growth prospects of the China travel market, we
will continue to invest in our business and our brand to build a solid
foundation for long-term sustainable growth and profitability," said Tom
SooHoo, Chief Executive Officer of eLong.
Business Results
Total revenues for the third quarter of 2006 were RMB74.6 million
(US$9.4 million), an increase of 40% from RMB53.4 million (US$6.6 million)
reported in the same period in 2005, and an increase of 12% from
RMB66.8 million (US$8.4 million) reported in the second quarter of 2006.
Revenue from hotel commissions for the third quarter of 2006 totaled
RMB57.4 million (US$7.3 million), an increase of 38% from RMB41.5 million
(US$5.1 million) year-over-year, and an increase of 7% from RMB53.8 million
(US$6.7 million) sequentially.
The year-over-year increase in revenue from hotel commissions was
primarily due to higher room volumes accompanied by higher hotel commissions
per room night. Hotel commissions per room night were RMB64 in the third
quarter of 2006, up 5% from RMB61 in the corresponding period a year ago, and
down 2% from RMB65 in the second quarter. Hotel room nights booked through
eLong increased 31% to 893,000 in the third quarter from 684,000 room nights
in the corresponding period a year ago which included bookings made through
FortuneTrip, a company we acquired in July 2005, and were up 7% sequentially
from 832,000 in the second quarter of 2006.
As of September 30, 2006, eLong offered customers a choice of hotel rooms
at discounted rates at 3,666 hotels in 291 cities across China as compared to
slightly fewer than 3,000 hotels in 280 cities at the end of the third quarter
of 2005. "eLong has built one of the most extensive networks with hotel
partners in this region. And our consistently strong hotel revenue growth
reflects the increasing leverage that we have with suppliers as we drive more
business to them," said Frank Zheng, Vice President of Travel Services.
Revenue from air ticketing commissions during the third quarter of 2006
totaled RMB11.0 million (US$1.4 million), an increase of 47% from
RMB7.5 million (US$927,000) year-over-year, and an increase of 15% from
RMB9.6 million (US$1.2 million) sequentially. Volume in air segment sales
continued to grow with 273,000 air segments sold in the third quarter of 2006,
an increase of 38% from 198,000 in the corresponding period a year ago and 11%
higher than the 247,000 sold in the second quarter. Revenue per air ticket was
RMB41 in the third quarter of 2006 as compared to RMB38 in the corresponding
period a year ago and RMB39 in the second quarter. The sequential increase of
revenue per air ticket was primarily due to an increase in the average air
ticket price.
"Year-over-year growth in air ticketing revenues was primarily driven by
the acquisition of new air customers, increased sales of air tickets to
eLong's existing hotel customer base and better product offerings. We will
continue to focus on building a scalable and efficient air infrastructure in
the medium term, which is a critical component in eLong's business strategy,"
explained Andy Clayton, Vice President of Air.
Other travel revenue in the third quarter of 2006 was RMB3.9 million
(US$488,000), an increase of 338% from RMB881,000 (US$109,000) year-over-year,
and an increase of 137% from RMB1.6 million (US$204,000) sequentially. The
year-over-year and sequential increases were mainly attributable to
RMB2.6 million revenue for inventory procurement services provided to Expedia
by eLong for the period from January 2005 through September 2006. The
inventory procurement agreement with Expedia was agreed and finalized during
this quarter.
During the third quarter, the Company entered into a definitive agreement
to sell the assets of one of its divisions operating an interactive online
dating community, to a related party purchaser for a sale price of
US$14.6 million. Disposal of the division qualifies as discontinued operations
in the third quarter of 2006. Hence, the results of the operations of the
division for current and prior periods have been aggregated into a separate
line item as "Discontinued operations" in the statement of operations. The
non-travel business is not a focus for eLong going forward.
Gross margins in the third quarter of 2006 were 77%, as compared to 81% in
the corresponding period a year ago and were consistent with the second
quarter. The year-over-year reduction in gross margin was a result of
reduction in higher-margin non-travel revenue, additional compensation and
benefit for call center employees and slightly increased proportion of revenue
contributed by the air ticketing business.
Service development, sales and marketing and general and administrative
expenses for the third quarter of 2006 totaled RMB51.4 million (US$6.5
million), an increase of 10% from RMB46.8 million (US$5.8 million) year-over-
year, and an increase of 5% from RMB48.8 million (US$6.1 million)
sequentially.
Service development expenses were RMB10.7 million (US$1.4 million) in the
third quarter of 2006, an increase of 18% from RMB9.1 million (US$1.1 million)
year-over-year, and an increase of 6% from RMB10.0 million (US$1.3 million)
sequentially. The year-over-year and sequential increases reflected ramped-up
investments to support the eLong.com website and the Company's air, hotel and
vacation package businesses.
Sales and marketing expenses were RMB25.3 million (US$3.2 million) in the
third quarter of 2006, an increase of 8% from RMB23.4 million (US$2.9 million)
year-over-year, and unchanged from RMB25.3 million (US$3.2 million) in the
second quarter. The year-over-year increase was due to increases in business
volume and customer acquisition. Sales and marketing expenses in the third
quarter of 2006 were 34% of revenues as compared to 44% in the corresponding
period a year ago and 38% in the second quarter.
General and administrative expenses were RMB15.4 million (US$1.9 million)
in the third quarter of 2006, an increase of 8% from RMB14.3 million (US$1.8
million) year-over-year, and an increase of 15% from RMB13.4 million (US$1.7
million) sequentially. The year-over-year and sequential increases were
primarily due to additional professional fees, headcount expenses, and other
expenditures associated with the expansion of our business.
Operating income in the third quarter of 2006 was RMB1.7 million
(US$215,000), as compared to an operating loss of RMB7.0 million (US$857,000)
in the corresponding period of 2005 and RMB1.2 million (US$143,000) in the
second quarter. The third quarter operating income included non-cash related
stock-based compensation expense and amortization of intangibles of RMB2.6
million (US$330,000) and the comparable non-cash related stock-based
compensation expense and amortization amount for the corresponding period of
2005 was RMB3.9 million (US$480,000) and the second quarter of 2006 was RMB2.8
million (US$348,000).
Other income, which represents interest income, unrealized exchange
gains/losses and other income/expenses, was RMB3.4 million (US$424,000) for
the third quarter of 2006, compared to other loss of RMB15.2 million (US$1.9
million) in the corresponding period a year ago, and other income of RMB8.5
million (US$1.1 million) in the second quarter of 2006. The sequential
decrease in other income was primarily due to a higher unrealized exchange
loss on the translation for financial reporting purposes of eLong's US dollar
denominated cash deposits into Renminbi. The unrealized exchange loss was
RMB11.4 million (US$1.4 million) in the third quarter as compared to an
unrealized exchange loss of RMB2.8 million (US$347,000) in the second quarter.
The Company recorded a net income of RMB2.7 million (US$337,000) for the
third quarter of 2006, compared to a net loss of RMB40.5 million (US$5.0
million) in the corresponding period a year ago, and a net income of RMB10.2
million (US$1.3 million) in the second quarter. The US GAAP diluted income per
ADS for the third quarter of 2006 was RMB0.10 (US$0.013), compared to US GAAP
diluted loss per ADS of RMB1.62 (US$0.200) in the corresponding period a year
ago and US GAAP diluted income per ADS of RMB0.38 (US$0.048) in the second
quarter. Adjusted income for the third quarter of 2006 (a non-GAAP measure)
was RMB16.6 million (US$2.1 million), compared to adjusted income of RMB4.9
million (US$609,000) in the corresponding period a year ago and adjusted
income of RMB13.1 million (US$1.6 million) in the second quarter. Diluted
adjusted income per ADS for the third quarter (also a non-GAAP measure) was
RMB0.62 (US$0.078), compared to diluted adjusted income per ADS of RMB0.18
(US$0.022) in the corresponding period a year ago and diluted adjusted income
per ADS of RMB0.48 (US$0.062) in the second quarter. Please refer to the
attached table for a reconciliation of net income/loss and basic and diluted
income/loss per ADS under US GAAP to adjusted income/loss and basic and
diluted adjusted income/loss per ADS.
As of September 30, 2006, the Company's cash and cash equivalents balance
was US$142.1 million, which included a prepayment from the related party
purchaser of US$2.9 million for the sales of certain assets.
"In the third quarter, eLong achieved positive growth in revenues and an
operating profit for the first time, which indicates that our operating
leverage has improved even as we continue to focus on investing in the
business for long-term sustainable profitability," said Tony Shen, interim
Chief Financial Officer of eLong.
Management Announcements
Richard Xu was appointed as Chief Marketing Officer effective August 15,
2006, with responsibility for all of eLong's sales and marketing activities.
Prior to joining eLong, Mr. Xu served as Executive Vice President at Linktone
Ltd, leading the marketing and business development teams.
Armstrong Wang was appointed as Vice President of Marketing effective
September 26, 2006. Mr. Wang will report to Mr. Xu, the Chief Marketing
Officer. Prior to joining eLong, Mr. Wang worked as Director of Marketing and
Sales at Aoyou, an online travel distribution company in China, leading sales,
marketing, web site and business development.
Business Outlook
eLong expects travel revenues for the fourth quarter of 2006 within the
range of RMB70.0 million (US$8.9 million) to RMB73.0 million (US$9.2 million),
an increase of 30% to 35% from the fourth quarter of 2005, and total revenues
of RMB73.0 million (US$9.2 million) to RMB76.0 million (US$9.6 million), an
increase of 26% to 31% from the fourth quarter of 2005.
Note to the Financial Statements
During the third quarter, the Company entered into a definitive agreement
to sell the assets of one of its divisions operating an interactive online
dating community, to a related party purchaser for a sale price of US$14.6
million. Disposal of the division qualifies as discontinued operations in the
third quarter of 2006. Hence, the results of the operations of the division
for current and prior periods have been aggregated into a separate line item
as "Discontinued operations" in the statement of operations.
Safe Harbor Statement
It is currently expected that the Business Outlook will not be updated
until the release of eLong's next quarterly earnings announcement; however,
eLong reserves the right to update its Business Outlook at any time for any
reason.
Statements in this press release concerning eLong's future business,
operating results and financial condition are "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. Words such as
"anticipate," "believe," "estimate," "expect," "forecast," "intend," "may,"
"plan," "project," "predict," "should" and "will" and similar expressions as
they related to the Company are intended to identify such forward-looking
statements. These forward looking statements are based upon management's
current views and expectations with respect to future events and are not a
guarantee of future performance. Furthermore, these statements are, by their
nature, subject to a number of risks and uncertainties that could cause actual
performance and results to differ materially from those discussed in the
forward-looking statements as a result of a number of factors. Factors that
could affect the Company's actual results and cause actual results to differ
materially from those included in any forward-looking statement include, but
are not limited to, eLong's historical operating losses, its limited operating
history, declines or disruptions in the travel industry, the recurrence of
SARS, an outbreak of bird flu, eLong's reliance on having good relationships
with hotel suppliers and airline ticket suppliers, our reliance on the
Travelsky GDS system for our air business, the possibility that eLong will be
unable to timely comply with Section 404 of the Sarbanes-Oxley Act of 2002,
the risk that eLong will not be successful in competing against new and
existing competitors, risks associated with Expedia, Inc.'s (Nasdaq: EXPE)
majority ownership interest in eLong and the integration of eLong's business
with that of Expedia's, subsequent revaluations of the Chinese currency,
changes in eLong's management team and other key personnel and other risks
outlined in eLong's filings with the U.S. Securities and Exchange Commission
(or SEC), including eLong's Form 20-F filed with the SEC in connection with
the Company's fiscal year 2005 results. Readers are cautioned not to place
undue reliance on any forward-looking statements, which speak only as of their
dates.
Conference Call
eLong will host a conference call to discuss the third quarter 2006
earnings at 7:00 p.m. Eastern Time, Nov 9, 2006 (Beijing/Hong Kong time: Nov
10, 2006 at 8:00 a.m.). The management team will be on the call to discuss
quarterly results and highlights and to answer questions. The toll-free number
for U.S. participants is +1 800 365 8460. The dial-in number for Hong Kong
participants is +852 2258 4000. The toll number for international participants
is +1 210 795 0492. The pass code for all participants is eLong.
A replay of the call will be available for 1 day between 8:15 p.m. Eastern
Time on Nov 9, 2006 and 8:15 p.m. Eastern Time on Nov 10, 2006. The toll-free
number for U.S. callers is +1 800 839 3143. The dial-in number for
international callers is +1 203 369 4605. The pass code for the replay is
798750.
Additionally, a live and archived web cast of this call will be available
on the Investor Relations section of the eLong web site at http://ir.elong.net
for three months.
About eLong, Inc.
eLong, Inc. (Nasdaq: LONG) is a leading online travel company in China.
Headquartered in Beijing, eLong has a national presence across China. eLong
uses web-based distribution technologies and a 24-hour call center to provide
consumers with access to travel reservation services. Aiming to enrich
people's lives through the freedom of independent travel, eLong empowers
consumers to make informed choices by providing a one-stop travel solution and
consolidated travel tools and information such as maps, virtual tours and user
ratings. eLong has the capacity to fulfill air ticket reservations in over 58
major cities across China. In addition to choice of a wide hotel selection in
the Greater China region, eLong offers Chinese consumers the ability to make
bookings at international hotels in over 140 destinations worldwide. eLong
operates the websites http://www.elong.com and http://www.elong.net.
Investor Contact:
Raymond Huang
eLong, Inc.
Investor Relations Manager
ir@corp.elong.com
86-10-5860-2288 ext. 6633
eLong, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
IN LOCAL CURRENCY
Three Months Ended Nine Months Ended
Sep. Jun. Sep. Sep. Sep.
30, 30, 30, 30, 30,
2006 2006 2005 2006 2005
RMB RMB RMB RMB RMB
Revenues
Hotel commissions 57,412 53,753 41,483 153,250 106,410
Airticketing commissions 11,045 9,641 7,504 28,694 16,222
Other travel revenue 3,860 1,629 881 6,945 1,883
Total travel revenue 72,317 65,023 49,868 188,889 124,515
Non travel 2,263 1,770 3,531 5,936 7,880
Total revenues 74,580 66,793 53,399 194,825 132,395
Cost of services 17,124 15,285 10,272 45,581 29,008
Gross profit 57,456 51,508 43,127 149,244 103,387
Operating expenses
Service development 10,718 10,094 9,058 31,286 24,025
Sales and marketing 25,331 25,302 23,446 72,483 64,317
General and administrative 15,376 13,355 14,250 48,917 38,611
Amortization of intangibles 265 265 325 795 445
Business tax and surcharges 4,064 3,643 2,981 10,720 7,163
Total operating expenses 55,754 52,659 50,060 164,201 134,561
Income/(loss) from operations 1,702 (1,151) (6,933) (14,957) (31,174)
Other income/(loss) 3,353 8,497 (15,165) 16,114 (1,951)
Income/(loss) before income
tax expense 5,055 7,346 (22,098) 1,157 (33,125)
Income tax expense 2,199 250 672 2,986 655
Income/(loss) from continuing
operations 2,856 7,096 (22,770) (1,829) (33,780)
Discontinued operations
Income/(loss) from
discontinued operations (204) 526 (17,656) (90) (19,724)
Income tax expense/(benefit)
of discontinued operations (15) 48 29 27 54
Gain on sale of discontinued
operations - 2,650 - 2,650 -
Total discontinued operations (189) 3,128 (17,685) 2,533 (19,778)
Net income/(loss) 2,667 10,224 (40,455) 704 (53,558)
Basic income/(loss) per share
Continuing operations 0.06 0.14 (0.45) (0.04) (0.68)
Discontinued operations - 0.06 (0.35) 0.05 (0.40)
Basic income/(loss) per share 0.06 0.20 (0.81) 0.01 (1.08)
Diluted income/(loss) per
share
Continuing operations 0.05 0.13 (0.45) (0.03) (0.68)
Discontinued operations - 0.06 (0.35) 0.05 (0.40)
Diluted income/(loss) per
share 0.05 0.19 (0.81) 0.02 (1.08)
Basic income/(loss) per ADS
Continuing operations 0.12 0.28 (0.91) (0.08) (1.37)
Discontinued operations - 0.12 (0.70) 0.10 (0.79)
Basic income/(loss) per ADS 0.12 0.40 (1.62) 0.02 (2.16)
Diluted income/(loss) per ADS
Continuing operations 0.10 0.26 (0.91) (0.06) (1.37)
Discontinued operations - 0.12 (0.70) 0.10 (0.79)
Diluted income/(loss) per ADS 0.10 0.38 (1.62) 0.04 (2.16)
Shares used in computing basic
net income/(loss) per share 50,374 50,374 50,244 50,368 49,411
Shares used in computing
diluted net income/(loss) per
share 53,878 53,870 50,244 53,837 49,411
eLong, Inc. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED, IN THOUSANDS
EXCEPT PER SHARE AMOUNTS)
IN U.S. DOLLARS
Three Months Ended Nine Months Ended
Sep. Jun. Sep. Sep. Sep.
30, 30, 30, 30, 30,
2006 2006 2005 2006 2005
US$ US$ US$ US$ US$
Revenues
Hotel commissions 7,264 6,724 5,126 19,389 13,150
Airticketing
commissions 1,397 1,206 927 3,630 2,005
Other travel revenue 488 204 109 879 233
Total travel revenue 9,149 8,134 6,162 23,898 15,388
Non travel 286 221 436 751 974
Total revenues 9,435 8,355 6,598 24,649 16,362
Cost of services 2,166 1,912 1,269 5,767 3,585
Gross profit 7,269 6,443 5,329 18,882 12,777
Operating expenses
Service development 1,356 1,262 1,119 3,958 2,969
Sales and marketing 3,205 3,164 2,897 9,170 7,948
General and
administrative 1,945 1,671 1,762 6,189 4,772
Amortization of
intangibles 34 33 40 101 55
Business tax and
surcharges 514 456 368 1,356 885
Total operating
expenses 7,054 6,586 6,186 20,774 16,629
Income/(loss) from
operations 215 (143) (857) (1,892) (3,852)
Other income/(loss) 424 1,063 (1,874) 2,039 (241)
Income/(loss) before
income tax expense 639 920 (2,731) 147 (4,093)
Income tax expense 278 31 83 378 81
Income/(loss) from
continuing operations 361 889 (2,814) (231) (4,174)
Discontinued operations
Income/(loss) from
discontinued
operations (26) 66 (2,182) (11) (2,437)
Income tax
expense/(benefit) of
discontinued
operations (2) 6 4 3 7
Gain on sale of
discontinued
operations - 331 - 335 -
Total discontinued
operations (24) 391 (2,186) 321 (2,444)
Net income/(loss) 337 1,280 (5,000) 90 (6,618)
Basic income/(loss) per
share
Continuing operations 0.008 0.018 (0.056) (0.005) (0.084)
Discontinued operations - 0.008 (0.044) 0.006 (0.049)
Basic income/(loss) per
share 0.008 0.025 (0.100) 0.001 (0.133)
Diluted income/(loss)
per share
Continuing operations 0.006 0.016 (0.056) (0.004) (0.084)
Discontinued operations - 0.008 (0.044) 0.006 (0.049)
Diluted income/(loss)
per share 0.006 0.024 (0.100) 0.002 (0.133)
Basic income/(loss) per
ADS
Continuing operations 0.015 0.036 (0.112) (0.010) (0.169)
Discontinued operations - 0.015 (0.087) 0.013 (0.098)
Basic income/(loss) per
ADS 0.015 0.051 (0.200) 0.003 (0.267)
Diluted income/(loss)
per ADS
Continuing operations 0.013 0.033 (0.112) (0.008) (0.169)
Discontinued operations - 0.015 (0.087) 0.013 (0.098)
Diluted income/(loss)
per ADS 0.013 0.048 (0.200) 0.005 (0.267)
Shares used in
computing basic net
income/(loss) per
share 50,374 50,374 50,244 50,368 49,411
Shares used in
computing diluted net
income/(loss) per
share 53,878 53,870 50,244 53,837 49,411
Note 1: The conversions of Renminbi (RMB) into United States dollars (USD)
as at the reporting dates are based on the noon buying rate of USD1.00 =
RMB7.904 on September 30,2006, USD1.00 = RMB7.9943 on June 30, 2006 and
USD1.00 = RMB8.092 on September 30, 2005 in The City of New York for cable
transfers of Renminbi as certified for customs purposes by the Federal
Reserve.
No representation is intended to imply that the RMB amounts could have
been, or could be, converted, realized or settled into U.S. dollars at that
rate on the reporting dates.
eLong, Inc.
CONSOLIDATED SUMMARY BALANCE SHEET DATA
(UNAUDITED, IN THOUSANDS)
Sep. 30, Dec. 31, Sep. 30, Dec. 31,
2006 2005 2006 2005
ASSETS RMB RMB US$ US$
Current assets
Cash and cash equivalents 1,123,368 988,560 142,127 122,495
Restricted cash equivalents - 76,177 - 9,439
Total Accounts receivable, net 41,501 34,655 5,251 4,294
Investment securities 222 260 28 32
Prepaid expenses and other
current assets 21,174 9,982 2,679 1,237
Total current assets 1,186,265 1,109,634 150,085 137,498
Equipment and software, net 38,306 33,306 4,846 4,127
Goodwill 32,789 34,083 4,148 4,223
Intangibles 4,011 4,806 507 596
Other non-current assets 7,841 6,508 992 806
Assets held for sale 1,301 - 165 -
Deferred tax assets 84 84 11 10
Total assets 1,270,597 1,188,421 160,754 147,260
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Accounts payable, accrued
expenses and other payables 162,173 88,013 20,518 10,906
Advances from customers 1,804 736 228 91
Short term loans - 6,000 - 743
Business and other taxes payable 4,140 3,004 524 372
Total current liabilities 168,117 97,753 21,270 12,112
Other long term liabilities 1,432 - 181 -
Deferred Tax Liabilities 132 132 17 16
Total liabilities 169,681 97,885 21,468 12,128
Minority interest - 1,628 - 202
Shareholders' equity
Ordinary shares 4,177 4,167 528 516
Additional paid-in capital 1,200,593 1,216,879 151,897 150,787
Other equity items 1,177 (26,441) 149 (3,276)
Accumulated deficit and other
comprehensive income (105,031) (105,697) (13,288) (13,097)
Total shareholders' equity 1,100,916 1,088,908 139,286 134,930
Total liabilities and
shareholders' equity 1,270,597 1,188,421 160,754 147,260
eLong, Inc.
RECONCILIATION OF US GAAP INCOME/(LOSS) AND EPS TO NON-GAAP ADJUSTED
INCOME/(LOSS) AND EPS
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
IN LOCAL CURRENCY
Three Months Ended Nine Months Ended
Sep. Jun. Sep. Sep. Sep.
30, 30, 30, 30, 30,
2006 2006 2005 2006 2005
RMB RMB RMB RMB RMB
Net income/(loss) 2,667 10,224 (40,455) 704 (53,558)
Amortization of non-cash stock-
based compensation 2,341 2,520 3,375 8,812 12,881
Amortization of intangibles 265 265 510 795 1,001
Other non-cash compensation 506 506
Unrealized foreign exchange
losses on US$ net monetary
assets/liabilities 11,357 2,772 23,449 14,665 23,449
Writedown of subsidiary's
goodwill and intangibles 17,545 17,545
Gain on disposal of discontinued
operations (2,650) - (2,650) -
Adjusted income/(loss) 16,630 13,131 4,930 22,326 1,824
Basic adjusted income/(loss) per
share 0.33 0.26 0.10 0.44 0.04
Diluted adjusted income/(loss)
per share 0.31 0.24 0.09 0.41 0.03
Basic adjusted income/(loss) per
ADS 0.66 0.52 0.20 0.88 0.08
Diluted adjusted income/(loss)
per ADS 0.62 0.48 0.18 0.82 0.06
Shares used in computing
adjusted basic income/(loss)
per share 50,374 50,374 50,244 50,368 49,411
Shares used in computing
adjusted diluted income/(loss)
per share 53,878 53,870 53,075 53,837 52,750
eLong, Inc.
RECONCILIATION OF US GAAP INCOME/(LOSS) AND EPS TO NON-GAAP ADJUSTED
INCOME/(LOSS) AND EPS
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
IN U.S. DOLLARS
Three Months Ended Nine Months Ended
Sep. Jun Sep. Sep. Sep.
30, 30, 30, 30, 30,
2006 2006 2005 2006 2005
US$ US$ US$ US$ US$
Net income/(loss) 337 1,280 (5,000) 90 (6,618)
Amortization of non-cash stock-
based compensation 296 315 417 1,115 1,592
Amortization of intangibles 34 33 63 101 124
Other non-cash compensation 63 63
Unrealized foreign exchange losses
on US$ net monetary
assets/liabilities 1,437 347 2,898 1,855 2,898
Writedown of subsidiary's goodwill
and intangibles - 2,168 2,168
Gain on disposal of discontinued
operations - (331) - (335) -
Adjusted income/(income) 2,104 1,644 609 2,826 227
Basic adjusted income/(loss) per
share 0.042 0.033 0.012 0.056 0.005
Diluted adjusted income/(loss) per
share 0.039 0.031 0.011 0.052 0.004
Basic adjusted income/(loss) per
ADS 0.084 0.066 0.024 0.112 0.009
Diluted adjusted income/(loss) per
ADS 0.078 0.062 0.022 0.104 0.009
Shares used in computing adjusted
basic income/(loss) per share 50,374 50,374 50,244 50,368 49,411
Shares used in computing adjusted
diluted income/(loss) per share 53,878 53,870 53,075 53,837 52,750
Use of Non-GAAP Financial Information
To supplement our consolidated financial statements presented herein in
accordance with accounting principles generally accepted in the United States
("US GAAP"), the Company also uses non-GAAP measures of adjusted net loss and
adjusted diluted loss per ADS, which are adjusted from results based on US
GAAP to exclude the impact of (1) amortization of non-cash stock-based
compensation expense, (2) amortization of intangible assets, (3) other non-
cash compensation, (4) unrealized foreign exchange losses on the conversion of
eLong's US$ denominated net monetary assets/liabilities into Renminbi and (5)
gain on disposal of discontinued operations. Management believes these non-
GAAP financial measures enhance the user's overall understanding of our
current financial performance and our prospects for the future and,
additionally, uses these non-GAAP financial measures for the general purpose
of analyzing and managing the Company's business. Specifically, we believe the
non-GAAP financial measures provide useful information to both management and
investors by excluding certain charges that we believe are not indicative of
our core operating results. The presentation of this additional information is
not meant to be considered superior to, in isolation from or as a substitute
for results prepared in accordance with US GAAP.