7 DAYS GROUP HOLDINGS LIMITED(ADR) 
By GUANGZHOU, China, May 13, 2013 /PRNewswire/ -- 7 Days Group Holdings Limited ("7 Days Group" or the "Company") (NYSE: SVN), a leading and fast growing national economy hotel chain based in China, today announced its unaudited financial results for the first quarter 2013.
First Quarter 2013 Financial Highlights
-- Total net revenues for the first quarter 2013 increased by 17.5%
year-over-year to RMB640.5 million (US$103.1 million) [2].
-- Income from operations for the first quarter 2013 was RMB13.7 million
(US$2.2 million), compared to RMB23.3 million in the first quarter 2012.
Non-GAAP income from operations for the quarter was RMB20.4 million
(US$3.3 million), compared to RMB32.2 million for the same period in
2012.
-- EBITDA for the first quarter was RMB106.2 million (US$17.1 million), an
increase of 0.4% year-over-year from RMB105.8 million for the same
period in 2012. Adjusted EBITDA for the quarter was RMB112.9 million
(US$18.2 million), a decrease of 1.5% year-over-year. EBITDA margin was
16.6% compared to 19.4% in the same period in 2012. Adjusted EBITDA
margin was 17.6%, compared to 21.0% in the prior year period.
-- Net income attributable to the Company's ordinary shareholders for the
quarter was RMB5.4 million (US$0.9 million), compared to RMB19.0 million
for the same period in 2012. Non-GAAP net income attributable to the
Company's ordinary shareholders for the quarter was RMB12.1 million
(US$2.0 million), representing a year-over-year decrease of 56.4%.
-- Basic and diluted earnings per ADS[3] were RMB0.11 (US$0.02) and RMB0.11
(US$0.02) respectively. Non-GAAP basic and diluted earnings per ADS were
RMB0.25 (US$0.04) and RMB0.25 (US$0.04), respectively.
-- Net operating cash inflow was RMB76.6 million (US$12.3 million),
compared to RMB93.8 million in the same period in 2012.
[1] Definition of Total transaction
value: total room revenue from
leased-and-operated hotels and
managed hotels. The metric is
highlighted as an indicator of the
scale and reach of 7 Days' brands.
[2] The Company's reporting currency is
Renminbi ("RMB"). The translation
of amounts from RMB to United
States Dollars is solely for the
convenience of the reader. RMB
amounts included in this press
release have been translated into
U.S. dollars at the exchange rate
of March 31, 2013 as set forth in
the H.10 statistical release of
the Federal Reserve Board, which
was US$1.00 = RMB6.2108. No
representation is made that RMB
amounts could have been, or could
be, converted into U.S. Dollars at
that rate or at any other rate on
March 31, 2013.
[3] Each ADS represents 3 of the
Company's ordinary shares.
First Quarter 2013 Operational Highlights
-- Added 82 net hotels, comprising 8 net leased-and-operated hotels and 74
net managed hotels in the first quarter 2013.
-- As of March 31, 2013, 7 Days Group had 1,427 hotels in operation,
consisting of 500 leased-and-operated hotels and 927 managed hotels,
representing a total of 141,091 rooms covering 223 cities.
-- As of March 31, 2013, there were a total of 223 hotels in the pipeline,
including 14 leased-and-operated hotels under conversion and 209 managed
hotels contracted but not yet opened.
-- For the first quarter 2013, occupancy rates for leased-and-operated
hotels, managed hotels and all hotels were 75.0%, 75.5% and 75.3%,
respectively, compared to 79.5%, 76.3% and 77.7%, respectively, in the
first quarter 2012. The year-over-year decrease in occupancy rates was
primarily a result of the impact from the macro economic situation.
-- RevPAR[4] for leased-and-operated hotels in the first quarter 2013 was
RMB124.1, compared to RMB128.8 in the same period in 2012. RevPAR for
managed hotels for the period was RMB117.1, compared to RMB116.0 for the
same period in 2012.
-- As of March 31, 2013, the number of 7 Days Club members was
approximately 56.3 million, a 46% increase from 38.6 million as of March
31, 2012.
[4] RevPAR represents revenue
per available room
Recent Business Developments:
Mr. Yuezhou Lin, 7 Days Group's Chief Executive Officer and Director, commented, "We are pleased to report a strong first quarter with financial results exceeding our guidance, setting a solid start for year 2013. Our outlook for the remainder of 2013 is favorable, as we have built a healthy pipeline and expect to benefit from the increasing economies of scale. We expect to maintain our fast expansion pace, therefore to solidify our market leader position in the economy hotel industry."
First Quarter 2013 Unaudited Financial Results
Gross revenues. Gross revenues for the first quarter 2013 were RMB678.1 million (US$109.2 million), representing a year-over-year increase of 17.4% from RMB577.6 million in the first quarter 2012.
Gross revenues from leased-and-operated hotels. Gross revenues from leased-and-operated hotels for the first quarter 2013 amounted to RMB596.9 million (US$96.1 million), representing a 14.9% increase from RMB519.5 million in the first quarter 2012.
Gross revenues from managed hotels. Gross revenues from managed hotels for the first quarter 2013 increased by 39.5% to RMB81.2 million (US$13.1 million) from RMB58.2 million in the same period in 2012. During the first quarter 2013, the Company opened 74 net managed hotels.
Total net revenues. Total net revenues for the first quarter 2013 totaled RMB640.5 million (US$103.1 million), representing a year-over-year increase of 17.5% from RMB545.0 million in first quarter 2012, primarily resulting from the continued growth in the number of hotels in operation.
Hotel operating costs. Hotel operating costs for the first quarter 2013 were RMB556.9 million (US$89.7 million), or 86.9% of total net revenues, compared with 85.6% of total net revenues in the first quarter 2012 and 80.5% of total net revenues in the fourth quarter 2012.
Sales and marketing expenses. Sales and marketing expenses for the first quarter 2013 were RMB16.1 million (US$2.6 million), or 2.5% of total net revenues, compared with 2.3% of total net revenues in the same period of 2012 and 4.6% in the fourth quarter 2012.
General and administrative expenses. General and administrative expenses for the first quarter 2013 were RMB53.8 million (US$8.7 million), or 8.4% of total net revenues, compared to RMB42.8 million, or 7.9% of total net revenues in the same period of 2012, and RMB52.6 million, or 7.6% of total net revenues in the fourth quarter 2012. The increase in general and administrative expenses was primarily due to the expenses associated with the going-private transaction involving the Company. The going-private related expenses incurred during the quarter were RMB11.7 million , about 1.83% of total net revenues.
Accordingly, total operating costs and expenses amounted to RMB626.8 million (US$100.9 million), representing 97.9% of total net revenues, compared to 95.7% of total net revenues in the same period of 2012 and 92.7% in the fourth quarter 2012.
Income from operations. Income from operations for the first quarter 2013 was RMB13.7 million (US$2.2 million), compared to RMB23.3 million in the first quarter 2012 and RMB51.1 million in the fourth quarter 2012. Non-GAAP income from operations was RMB20.4 million (US$3.3 million), compared to RMB32.2 million for the same period of 2012 and RMB56.3 million in the fourth quarter 2012.
EBITDA. EBITDA for the first quarter was RMB106.2 million (US$17.1 million), an increase of 0.4% year-over-year from RMB105.8 million for the same period in 2012. Adjusted EBITDA for the quarter was RMB112.9 million (US$18.2 million), representing a decrease of 1.5% year-over-year from RMB114.6 million for the same period in 2012. EBITDA margin was 16.6% compared to 19.4% in the same period in 2012. Adjusted EBITDA margin was 17.6% compared to 21.0% in the prior year period.
Interest expense. Interest expense for the first quarter 2013 was RMB4.6 million, (US$0.7 million) compared to RMB6.4 million for the same period of 2012 and RMB2.9 million in the fourth quarter 2012.
Income tax expense. Income tax expense for the first quarter 2013 was RMB7.0 million (US$1.1 million), compared to RMB7.3 million in the same period of 2012 and RMB13.8 million in the fourth quarter 2012.
Net income attributable to 7 Days Group Holdings Limited ordinary shareholders. Net income attributable to 7 Days Group Holdings Limited ordinary shareholders was RMB5.4 million (US$0.9 million) in the first quarter 2013, compared to RMB19.0 million in the first quarter 2012 and RMB37.9 million in the fourth quarter 2012.
Non-GAAP net income. Non-GAAP net income was RMB12.1 million (US$2.0 million), compared to Non-GAAP net income of RMB27.8 million for the first quarter 2012 and Non-GAAP net income of RMB43.1 million in the fourth quarter 2012.
Basic and diluted earnings per ADS. Basic and diluted earnings per ADS were RMB0.11 (US$0.02) and RMB0.11 (US$0.02), respectively, for the first quarter 2013, compared to basic and diluted earnings per ADS of RMB0.38 in the first quarter 2012 and basic and diluted earnings per ADS of RMB0.77 in the fourth quarter 2012. Non-GAAP basic and diluted earnings per ADS were RMB0.25 (US$0.04) and RMB0.25 (US$0.04), respectively, for the first quarter 2013, compared to non-GAAP basic and diluted earnings per ADS of RMB0.56 and RMB0.55, respectively, in the same period of 2012 and basic and diluted earnings per ADS of RMB0.88 and RMB0.88, respectively, in the fourth quarter2012.
Cash and pledged bank deposits. As of March 31, 2013, the Company had cash and pledged bank deposits of RMB379.2 million (US$61.1 million), representing a quarter-over-quarter decrease of 0.8% from RMB382.3 million as of December 31, 2012 and a year-over-year decrease of 19.2% from RMB469.6 million as of March 31, 2012, respectively.
Operating cash flow. Net operating cash inflow for the first quarter 2013 was RMB76.6 million (US$12.3 million), representing a decrease of 18.3% from RMB93.8 million in the first quarter 2012.
Guidance
The Company expects to generate total net revenues in the range of RMB735 million to RMB745 million in the second quarter 2013. These forecasts reflect the Company's current and preliminary view, which is subject to change.
Change in Directorship
Mr. Jeffrey Perlman, a member of the Company's board of directors, resigned as a Company director late last week. "On behalf of the Company and its board of directors, we would like to thank Mr. Perlman for his valuable contributions and service during the last two years," said Mr. Boquan He, Co-Chairman of the Company. "We wish Jeff every success in the future."
Conference Call
7 Days Group Holdings Limited senior management will host a conference call at 10:00 pm (Eastern) / 7:00 pm (Pacific) Monday, May 13, 2013, which is 10:00 am (Beijing) on Tuesday, May 14, 2013 to discuss its first quarter 2013 financial results and recent business activity. The conference call may be accessed by calling the following numbers:
China: 800 8190 121
Hong Kong: 852 2475 0994
US Toll Free: 1 866 519 4004
US New York: 1 718 354 1231
International: 65 6723 9381
Passcode: 7 Days
A live webcast of the conference call and replay will be available on the investor relations page of 7 Days Group's website at http://en.7daysinn.cn/.
A telephone replay will be available shortly after the call. The dial-in details are as follows:
US: 1 855 452 5696
International: 61 2 8199 0299
Conference ID number: 57969157
About 7 Days Group Holdings Limited
7 Days Group is a leading and fast growing national economy hotel chain based in China. It converts and operates limited service economy hotels across major metropolitan areas in China under its award-winning "7 Days Inn" brand. The Company strives to offer consistent and high-quality accommodations and services primarily to the growing population of value conscious business and leisure travelers who demand affordable, clean, comfortable, convenient and safe lodging, and to respond to its guests' needs.
Use of Non-GAAP Financial Measures
To supplement 7 Days Group's unaudited financial results presented in accordance with U.S. GAAP, the Company has used the following non-GAAP measures defined as non-GAAP financial measures by the Securities and Exchange Commission (the "SEC") to report its financial results:
-- Non-GAAP income from operations represents income from operations
reported in accordance with GAAP, excluding share-based compensation
expense.
-- Non-GAAP net income represents net income reported in accordance with
GAAP, excluding share-based compensation expense.
-- Non-GAAP earnings per ADS represents non-GAAP net income divided by the
number of ADS used in computing basic and diluted earnings per ADS.
-- EBITDA represents net income reported in accordance with GAAP, adjusted
for the effects of interest income and expense, provision for income
taxes, depreciation and amortization.
-- Adjusted EBITDA represents EBITDA, excluding share-based compensation
expense.
The Company believes EBITDA is a useful financial metric to assess its operating and financial performance before the impact of investing and financing transactions, if any, and income taxes. In addition, 7 Days Group believes that EBITDA is widely used by other companies in the lodging industry and may be used by investors as a measure of its financial performance. Given the significant investments that 7 Days Group has made in the past in property and equipment, depreciation and amortization expense comprises a meaningful portion of its cost structure. 7 Days Group believes that EBITDA will provide investors with a useful tool for comparability between periods because it eliminates depreciation and amortization expense attributable to capital expenditures. The presentation of EBITDA should not be construed as an indication that the Company's future results will be unaffected by other charges and gains the Company considers to be outside the ordinary course of its business. 7 Days Group also calculates Adjusted EBITDA excluding share-based compensation expense. The Company prepares its financial statements in accordance with GAAP and, accordingly, expenses its employee share options. Since share-based compensation expenses are non-cash expenses, the Company believes excluding them from its calculation of EBITDA allows it to provide investors with a more useful tool for assessing its operating and financial performance.
The use of EBITDA and Adjusted EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets, such as property and equipment, income tax expense, interest expense and interest income have been and will be incurred and are not reflected in the presentation of EBITDA. Each of these items should also be considered in the overall evaluation of its results. Additionally, EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of the Company's liquidity. The Company compensates for these limitations by providing the relevant disclosure of its depreciation and amortization, interest expense and interest income, income tax expense, capital expenditures, share-based compensation expense and other relevant items both in its reconciliations to the GAAP financial measures and in its consolidated financial statements, all of which should be considered when evaluating the Company's performance. The terms EBITDA and Adjusted EBITDA are not defined under GAAP, and EBITDA and Adjusted EBITDA are not measures of net income, operating income, operating performance or liquidity presented in accordance with GAAP. When assessing the Company's operating and financial performance, investors should not consider this data in isolation or as a substitute for the Company's net income, operating income or any other operating performance measure that is calculated in accordance with GAAP. In addition, the Company's EBITDA and Adjusted EBITDA may not be comparable to EBITDA or Adjusted EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA and Adjusted EBITDA in the same manner as the Company does.
For reasons same to the use of EBITDA and Adjusted EBITDA described above, the Company has also reported net income, basic and diluted earnings per ADS and income (loss) from operations on a non-GAAP basis, excluding share-based compensation expenses in the relevant period. These non-GAAP operating measures are useful for understanding and assessing the Company's underlying business performance and operating trends and the Company expects to report net income, basic and diluted earnings per ADS and income from operations on a non-GAAP basis using a consistent method on a quarterly basis going forward.
7 Days Group believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing 7 Days Group's financial performance and liquidity and when planning and forecasting future periods. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP results with non-GAAP results for the periods set forth in the tables at the end of this release.
Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements and including, among other things, 7 Days Group's revenue guidance for the second quarter 2013 and business forecast for 2013 including the expected number of hotel to be opened (including the breakdown of expected new leased-and-operated hotels and new managed hotels), Company's business strategies, its ability to offer consistent and high-quality accommodations and services at an affordable price, its ability to leverage economies of scale and its ability to achieve strict cost controls and to deliver continued growth. These forward-looking statements are not historical facts but instead represent only the Company's belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. The Company's actual results and financial condition and other circumstances may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. In particular, the Company's operating results for any period are impacted significantly by the mix of leased-and-operated hotels and managed hotels in its chain, causing the Company's operating results to fluctuate and making them difficult to predict.
Other factors that could cause forward-looking statements to differ materially from actual future events or results include risks and uncertainties related to: uncertainties associated with factors typically affecting the lodging industry, including changes in economic conditions, adverse weather conditions, natural disasters or outbreaks of serious contagious diseases in markets where the Company has a presence; uncertainties regarding the Company's ability to respond to competitive pressures; uncertainties regarding the Company's ability to manage its expected growth; uncertainties regarding the Company's ability to continue its growth and achieve profitability; risks associated with the Company's limited operating history and historical operating losses; uncertainties regarding the Company's ability to fund its working capital needs; uncertainties regarding its ability to successfully and timely identify, secure or operate additional hotel properties. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2012 Annual Report on Form 20-F filed with the SEC on April 10, 2013, which is available on the SEC's website at www.sec.gov. For a discussion of other important factors that could adversely affect the Company's business, financial condition, results of operations and prospects, see "Risk Factors" beginning on page 17 of the Company's 2012 Annual Report on Form 20-F. The Company's results of operations for the first quarter 2013 are not necessarily indicative of its operating results for any future periods. Any projections in this release are based on limited information currently available to the Company, which is subject to change. Although such projections and the factors influencing them will likely be changed, the Company will not necessarily update the information. Such information speaks only as of the date of this release.
Statement Regarding Unaudited Financial Information
The financial information set forth above is unaudited and subject to adjustments. Adjustments to the financial statements may be identified when the annual financial statements are prepared and audit work is performed for the year end audit, which could result in significant differences from this unaudited financial information.
Contacts:
Investor Contact:
Vivian Chen, Investor Relations Director
7 Days Group Holdings Limited
+86-20-8922-5858
IR@7daysinn.cn
Investor Relations (US):
Mahmoud Siddig, Managing Director
Taylor Rafferty
Tel: +1 (212) 889-4350
7DaysInn@taylor-rafferty.com
Investor Relations (HK):
Candy Cheung, Senior Consultant
Taylor Rafferty
+852 3196 3712
7DaysInn@taylor-rafferty.com
-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --
7 Days Group Holdings Limited
Consolidated balance sheet information
Quarter Ended
-------------
31/Mar/12 31/Dec/12 31/Mar/13
RMB' 000 RMB' 000 RMB' 000 US$'000
-------- -------- -------- -------
ASSETS
Current assets:
Cash 466,556 378,809 375,321 60,430
Pledged bank deposits 3,054 3,443 3,897 627
Short-term investment 60,000 - - -
Accounts receivable 6,758 17,015 13,919 2,241
Prepaid rent 158,746 171,370 176,589 28,433
Other prepaid expenses and current assets 56,059 77,608 77,399 12,462
Hotel supplies 46,826 56,591 46,204 7,439
Amounts due from related parties 71 87 15 2
Deferred tax assets 19,978 26,222 26,406 4,252
------ ------ ------ -----
Total current assets 818,048 731,145 719,750 115,886
------- ------- ------- -------
Property and equipment, net 1,679,664 1,970,763 1,927,978 310,423
Rental deposits 79,091 90,824 93,618 15,073
Land use right 23,889 23,426 23,272 3,747
Prepaid rent 63,268 71,088 68,328 11,001
Intangible assets, net 29,374 26,221 25,170 4,053
Goodwill 61,041 61,041 61,041 9,828
Other non-current assets 500 - - -
Deferred tax assets 53,287 62,513 63,518 10,227
------ ------ ------ ------
Total assets 2,808,162 3,037,021 2,982,675 480,238
========= ========= ========= =======
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable 208,758 300,240 230,034 37,038
Bills payable 10,177 11,475 12,990 2,092
Short-term bank borrowings 342,993 130,015 187,377 30,170
Accrued expenses and other payables 403,048 511,800 471,170 75,863
Amounts due to related parties 1,793 2,601 3,204 516
Income taxes payable 19,694 25,617 21,858 3,519
------ ------ ------ -----
Total current liabilities 986,463 981,748 926,633 149,198
Long-term bank borrowings 26,930 121,381 97,329 15,671
Accrued lease payment 218,184 256,472 263,404 42,411
Unfavorable lease contract liability 7,643 7,136 6,967 1,122
Refundable deposits 15,250 14,850 15,750 2,536
Deferred revenue 748 - - -
Deferred rebate income 6,350 5,727 6,916 1,114
Borrowings from related parties 1,238 752 - -
Income taxes payable 6,644 3,317 3,317 534
Deferred tax liabilities 3,039 7,527 6,977 1,123
----- ----- ----- -----
Total liabilities 1,272,489 1,398,910 1,327,293 213,709
========= ========= ========= =======
Equity:
Ordinary shares 141,097 141,317 141,610 22,801
Treasury stock - (67,137) (67,137) (10,810)
Additional paid-in capital 1,632,426 1,649,880 1,664,124 267,940
Accumulated other comprehensive income (475) (721) (941) (152)
Accumulated deficit (219,379) (62,303) (56,859) (9,158)
Total 7 Days Group Holdings Limited share holders' equity 1,553,669 1,661,036 1,680,797 270,621
Non-controlling interests (17,996) (22,925) (25,415) (4,092)
------- ------- ------- ------
Total equity 1,535,673 1,638,111 1,655,382 266,529
--------- --------- --------- -------
Total liabilities and equity 2,808,162 3,037,021 2,982,675 480,238
========= ========= ========= =======
7 Days Group Holdings Limited
Unaudited Consolidated Statements of Comprehensive Income
Quarter Ended
Mar 31 Dec 31 Mar 31
2012 2012 2013
RMB'000 RMB'000 RMB'000 US$'000
Total Revenues 577,639 736,385 678,110 109,182
Leased-and-operated hotels 519,459 648,427 596,929 96,111
Managed hotels 58,180 87,958 81,181 13,071
Less: Business tax and surcharges (32,612) (40,355) (37,570) (6,049)
Net revenues 545,027 696,030 640,540 103,133
Operating costs and expenses
Hotel operating costs (466,480) (560,637) (556,912) (89,668)
Rental expenses (165,391) (190,645) (192,826) (31,047)
Staff cost (89,142) (114,169) (116,089) (18,691)
Depreciation and amortization (73,021) (84,790) (87,435) (14,078)
Hotel supplies (24,468) (40,439) (34,268) (5,517)
Utilities (57,773) (46,554) (60,954) (9,814)
Other (56,685) (84,040) (65,340) (10,521)
Sales and marketing expenses (12,459) (31,702) (16,097) (2,592)
General and administrative expenses (42,785) (52,555) (53,806) (8,663)
Total operating costs and expenses (521,724) (644,894) (626,815) (100,923)
Income from operations 23,303 51,136 13,725 2,210
Other income (expenses)
Interest income 2,109 800 1,099 177
Interest expense (6,385) (2,875) (4,591) (739)
Income before income tax 19,027 49,061 10,233 1,648
Income tax expenses (7,341) (13,844) (7,043) (1,134)
Net income 11,686 35,217 3,190 514
Net income attributable to non-controlling interest 7,283 2,683 2,254 363
Net income attributable to 7 Days Group 18,969 37,900 5,444 877
Holdings Limited ordinary shareholders
Basic earnings per ordinary share 0.13 0.26 0.04 0.01
Diluted earnings per ordinary share 0.13 0.26 0.04 0.01
Other Comprehensive loss
Foreign currency transaction adjustment, net of nil tax (805) (1,857) (220) (35)
Comprehensive income 10,881 33,360 2,970 479
Less: Comprehensive income attributable to (7,283) (2,683) (2,254) (363)
noncontrolling interest
Comprehensive income attributable to 7 Days 18,164 36,043 5,224 842
Group Holdings Limited ordinary shareholders
7 Days Group Holdings Limited
Reconciliation of GAAP and Non-GAAP Results
EBITDA(non-GAAP)
Quarter Ended
-------------
Mar 31 Dec 31 Mar 31
2012 2012 2013
RMB'000 RMB'000 RMB'000 US$'000
------- ------- ------- -------
Net income attributable to 7 Days Group
Holdings Limited ordinary shareholders 18,969 37,900 5,444 877
Interest income (2,109) (800) (1,099) (177)
Interest expense 6,385 2,875 4,591 739
Income tax expenses 7,341 13,844 7,043 1,134
Depreciation and amortization 75,170 87,429 90,226 14,527
------ ------ ------ ------
EBITDA (non-GAAP) 105,756 141,248 106,205 17,100
------- ------- ------- ------
EBITDA% 19.4% 20.3% 16.6% 16.6%
Share-based compensation expenses 8,868 5,187 6,682 1,076
----- ----- ----- -----
Adjusted EBITDA (non- GAAP) excluding share-
based compensation expenses 114,624 146,435 112,887 18,176
------- ------- ------- ------
Adjusted EBITDA% 21.0% 21.0% 17.6% 17.6%
Non-GAAP net income attributable to 7 Days Group Holdings Limited ordinary shareholders
Quarter Ended
-------------
Mar 31 Dec 31 Mar 31
2012 2012 2013
RMB'000 RMB'000 RMB'000 US$'000
------- ------- ------- -------
Net income attributable to 7 Days Group Holdings Limited ordinary
shareholders (GAAP) 18,969 37,900 5,444 877
Share-based compensation expenses 8,868 5,187 6,682 1,076
----- ----- ----- -----
Net income attributable to ordinary shareholders excluding share-based
compensation expenses (Non GAAP net income) 27,837 43,087 12,126 1,953
------ ------ ------ -----
Earnings per share
Quarter Ended
-------------
Mar 31 Dec 31 Mar 31
2012 2012 2013
RMB RMB RMB USD
--- --- --- ---
Basic earnings per ordinary share (GAAP) 0.13 0.26 0.04 0.01
Diluted earnings per ordinary share (GAAP) 0.13 0.26 0.04 0.01
Basic earnings per ordinary share(Non-GAAP), excluding share-based
compensation expenses 0.19 0.29 0.08 0.01
Diluted earnings per ordinary share(Non-GAAP), excluding share-based
compensation expenses 0.18 0.29 0.08 0.01
Denominator:
Basic weighted average number of ordinary shares 149,942,510 146,813,397 147,035,958
Diluted weighted average number of ordinary shares 151,299,954 147,384,945 147,923,520
----------- ----------- -----------
Quarter Ended
-------------
31-Mar-12 31-Dec-12 31-Mar-13
RMB '000 RMB '000 RMB'000 USD'000
-------- -------- ------- -------
Hotel operating cost
GAAP Result (466,480) (560,637) (556,912) (89,668)
% of Total net revenue 85.59% 80.55% 86.94% 86.94%
Share-based Compensation 555 313 400 64
% of Total net revenue 0.10% 0.04% 0.06% 0.06%
Non-GAAP Result (465,925) (560,324) (556,512) (89,604)
% of Total net revenue 85.49% 80.50% 86.88% 86.88%
------ ----- ----- -----
Sales and marketing expenses
GAAP Result (12,459) (31,702) (16,097) (2,592)
% of Total net revenue 2.29% 4.55% 2.51% 2.51%
Share-based Compensation 586 578 623 100
% of Total net revenue 0.11% 0.08% 0.10% 0.10%
Non-GAAP Result (11,873) (31,124) (15,474) (2,492)
% of Total net revenue 2.18% 4.47% 2.42% 2.42%
----- ---- ---- ----
General and administrative expenses
GAAP Result (42,785) (52,555) (53,806) (8,663)
% of Total net revenue 7.85% 7.55% 8.40% 8.40%
Share-based Compensation 7,727 4,296 5,659 911
% of Total net revenue 1.42% 0.62% 0.88% 0.88%
Non-GAAP Result (35,058) (48,259) (48,147) (7,752)
% of Total net revenue 6.43% 6.93% 7.52% 7.52%
----- ---- ---- ----
Total operating cost and expenses
GAAP Result (521,724) (644,894) (626,815) (100,923)
% of Total net revenue 95.72% 92.65% 97.86% 97.86%
Share-based Compensation 8,868 5,187 6,682 1,076
% of Total net revenue 1.63% 0.75% 1.04% 1.04%
Non-GAAP Result (512,856) (639,707) (620,133) (99,847)
% of Total net revenue 94.10% 91.91% 96.81% 96.81%
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Income from operations
GAAP Result 23,303 51,136 13,725 2,210
% of Total net revenue 4.28% 7.35% 2.14% 2.14%
Share-based Compensation 8,868 5,187 6,682 1,076
% of Total net revenue 1.63% 0.75% 1.04% 1.04%
Non-GAAP Result 32,171 56,323 20,407 3,286
% of Total net revenue 5.90% 8.09% 3.19% 3.19%
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7 Days Group Holdings Limited
Operating Data
As of and for
the Quarter Ended
Mar 31 Dec 31 Mar 31
2012 2012 2013
Hotels in operation 1,044 1,345 1,427
Leased-and-operated hotels 417 492 500
Managed hotels 627 853 927
Hotels under conversion 189 223 223
Leased-and-operated hotels 30 21 14
Managed hotels 159 202 209
Total hotel rooms for hotels in operation 104,191 133,497 141,091
Leased-and-operated hotels 43,800 51,725 52,691
Managed hotels 60,391 81,772 88,400
Total hotel rooms for hotels under conversion 18,542 20,368 19,733
Number of cities covered for hotels in operation 162 208 223
Average occupancy rate 77.7% 78.1% 75.3%
Leased-and-operated hotels 79.5% 79.2% 75.0%
Managed hotels 76.3% 77.4% 75.5%
Average daily rate (in RMB) 156.4 161.8 159.1
Leased-and-operated hotels 161.9 168.5 165.5
Managed hotels 152.1 157.4 155.2
RevPAR (in RMB) 121.5 126.4 119.7
Leased-and-operated hotels 128.8 133.4 124.1
Managed hotels 116.0 121.9 117.1
SOURCE 7 Days Group Holdings Limited
