SOUFUN HOLDINGS LTD 
By BEIJING, Feb. 10, 2014 /PRNewswire/ -- SouFun Holdings Limited (NYSE: SFUN) ("SouFun"), the leading real estate Internet portal in China, announced today its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2013.
Fourth Quarter 2013 Highlights
-- Revenue in the fourth quarter of 2013 was $217.2 million, a 47.2%
increase from the corresponding period in 2012.
-- Operating income in the fourth quarter of 2013 was $126.7 million, an
81.0% increase from the corresponding period in 2012. Non-GAAP operating
income in the fourth quarter of 2013 was $128.5 million, a 75.7%
increase from the corresponding period in 2012.
-- Net income attributable to SouFun's shareholders was $112.1 million,
representing a year-over-year increase of 101.0%. Fully diluted earnings
per share were $1.27, increased 86.8% from the corresponding period in
2012.
-- Non-GAAP net income attributable to SouFun's shareholders was $126.0
million, representing a year-over-year increase of 93.5%. Non-GAAP fully
diluted earnings per share were $1.42, increased 79.7% from the
corresponding period in 2012.
Fiscal Year 2013 Highlights
-- Revenue in 2013 was $637.4 million, a 48.1% increase from 2012.
-- Operating income in 2013 was $350.4 million, a 76.4% increase from 2012.
Non-GAAP operating income in 2013 was $357.4 million, a 73.7% increase
from 2012.
-- Net income attributable to SouFun's shareholders was $298.6 million,
representing a year-over-year increase of 96.7%. Fully diluted earnings
per share were $3.41, increased 84.3% from the corresponding period in
2012.
-- Non-GAAP net income attributable to SouFun's shareholders was $318.2
million, representing a year-over-year increase of 82.7%. Non-GAAP fully
diluted earnings per share were $3.63, increased 70.4% from the
corresponding period in 2012.
"We are excited to report another strong quarter and full year results, marking the 4(th )consecutive annual results way above our guidance since our IPO, and our leading internet businesses continued their fast growth stories in 2013," said Vincent Mo, Executive Chairman of SouFun. "In 2014, we are confident that SouFun will continue its growth momentum and enhance long-term value for our shareholders by expanding new lines of businesses, investing in technologies and product development plus national brand promotions."
Fourth Quarter 2013 Results
Revenues
SouFun reported total revenue of $217.2 million in the fourth quarter of 2013, representing an increase of 47.2% from the corresponding period in 2012, primarily driven by the growth in listing services, SouFun membership services and marketing services.
Revenue from marketing services was $97.1 million in the fourth quarter of 2013, an increase of 21.0% from $80.2 million in the corresponding period in 2012, primarily due to more overall advertising spending by developers during the quarter.
Revenue from e-commerce services was $67.1 million in the fourth quarter of 2013, a 67.2% increase from $40.1 million in the same period in 2012, primarily due to expansion of SouFun membership services in existing and new cities.
Revenue from listing services was $50.0 million in the fourth quarter of 2013, an increase of 91.5% from $26.1 million for the corresponding period in 2012, primarily due to increased paying agent subscribers.
Revenue from other value-added services was $3.0 million in the fourth quarter of 2013, an increase of 174.5% from $1.1 million in the corresponding period in 2012.
Cost of Revenue
Cost of revenue was $27.8 million in the fourth quarter of 2013, an increase of 9.8% from $25.3 million in the corresponding period in 2012. The increase in cost of revenue was mainly driven by the increase in business and value-added taxes, partially offset by a reversal of previously accrued tax related items in the quarter.
Gross margin was 87.2% in the fourth quarter of 2013, compared to 82.8% in the corresponding period in 2012.
Operating Expenses
Operating expenses were $63.0 million in the fourth quarter of 2013, an increase of 20.6% from $52.2 million for the corresponding period in 2012, reflecting effective cost control.
Selling expenses were $34.8 million in the fourth quarter of 2013, an increase of 25.2% from $27.8 million in the corresponding period in 2012, primarily due to increased staff cost.
General and administrative expenses were $28.2 million in the fourth quarter of 2013, an increase of 15.4% from $24.4 million in the corresponding period in 2012, primarily due to increased staff cost.
Operating Income
Operating income was $126.7 million in the fourth quarter of 2013, an increase of 81.0% from $70.0 million in the corresponding period in 2012, driven by revenue growth and effective cost control.
Income Tax Expenses
Income tax expense was $19.2 million in the fourth quarter of 2013, a 17.8% increase compared to $16.3 million for the corresponding period in 2012 due to increase in income before taxes, partially offset by effective tax strategy in 2013.
Net Income and EPS
Net income attributable to SouFun's shareholders was $112.1 million in the fourth quarter of 2013, a 101.0% increase from $55.8 million in the corresponding period in 2012. Fully diluted earnings per share were $1.27 in the fourth quarter of 2013, an increase of 86.8% from $0.68 in the corresponding period in 2012.
Adjusted EBITDA
Adjusted EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $132.0 million in the fourth quarter of 2013, an increase of 76.1% as compared to $75.0 million in the corresponding period in 2012.
Cash
As of December 31, 2013, SouFun had cash, cash equivalents, and short-term investments (excluding the available-for-sale securities) of $591.1 million, compared to $143.6 million as of December 31, 2012. Included in cash, cash equivalents and short-term investments are the net proceeds of $341.6 million from the Company's private placement of convertible notes in December, 2014. The Company received an additional $48.9 million in net proceeds from the convertible note over allotment option closing in early January 2014. Cash flow from operating activities was $142.3 million in the fourth quarter of 2013, a 54.3% increase from $92.2 million in the same period in 2012.
Fiscal Year 2013 Results
Revenues
SouFun reported total revenue of $637.4 million in 2013, representing an increase of 48.1% from 2012, primarily driven by the growth in listing services and SouFun membership services.
Revenue from marketing services was $278.3 million in 2013, an increase of 11.4% from $249.9 million in 2012.
Revenue from e-commerce services was $188.1 million in 2013, an 84.1% increase from $102.2 million in 2012, primarily due to expansion of SouFun membership services in existing and new cities.
Revenue from listing services was $161.5 million in 2013, an increase of 121.7% from $72.9 million in 2012, primarily due to increased paying agent subscribers.
Revenue from other value-added services was $9.4 million in 2013, an increase of 75.4% from $5.4 million in 2012, primarily due to database service.
Cost of Revenue
Cost of revenue was $102.5 million in 2013, an increase of 26.7% from $80.9 million in 2012. The increase in cost of revenue was mainly driven by the increase in staff costs and business and value-added taxes.
Gross margin was 83.9% in 2013, compared to 81.2% in 2012.
Operating Expenses
Operating expenses were $185.3 million in 2013, an increase of 22.9% from $150.8 million in 2012.
Selling expenses were $101.9 million in 2013, an increase of 27.3% from $80.1 million in 2012, primarily due to increased staff cost.
General and administrative expenses were $83.4 million in 2013, an increase of 17.8% from $70.8 million in 2012, primarily due to increased staff cost.
Operating Income
Operating income was $350.4 million in 2013, an increase of 76.4% from $198.6 million in 2012, driven by revenue growth and effective cost control.
Income Tax Expenses
Income tax expense was $69.8 million in 2013, a 24.8% increase compared to $55.9 million in 2012. The increase was primarily due to an increase in pre-tax income, partially offset by a one-time benefit of $15.1 million resulting from certain subsidiaries being now subject to lower dividend-related withholding tax rates and to a lesser extent, effective tax strategy in 2013.
Net Income and EPS
Net income attributable to SouFun's shareholders was $298.6 million in 2013, a 96.7% increase from $151.8 million in 2012. Fully diluted earnings per share were $3.41 in 2013, an increase of 84.3% from $1.85 in 2012.
Adjusted EBITDA
Adjusted EBITDA was $371.1 million in 2013, an increase of 73.8% as compared to $213.5 million in 2012.
Cash
Cash flow from operating activities was $408.0 million in 2013, an 86.0% increase from $219.3 million in 2012
Business Outlook
SouFun estimates its total revenue for 2014 will be between $780.0 million and $796.0 million, representing a year-on-year increase of 22.5% to 25%. This forecast reflects SouFun's current and preliminary view, which is subject to change.
Conference Call Information
SouFun's management team will host a conference call on the same day at 8:00 AM U.S. EST (9:00 PM Beijing / Hong Kong time). The dial-in details for the live conference call are:
The dial-in details for the live conference call are:
International Toll: +65 6723-9381
International Toll-Free:
Hong Kong +852 800-930-346
United States +1 866-519-4004
Toll Dial-In:
Mainland China +86 400-620-8038 /
+86 800-819-0121
Password: SFUN
Conference ID number: 4399 6209
Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.
A telephone replay of the call will be available after the conclusion of the conference call from 11:00 AM U.S. EST on February 10 through February 17, 2014. The dial-in details for the telephone replay are:
International Toll: +61 2-8199-0299
Toll-Free:
Mainland China +86 400-602-2065 /+86
800-870-0206
Hong Kong +852 800-963-117 /+852
3051-2780
United States +1 855-452-5696 /+1
646-254-3697
Conference ID number: 4399 6209
A live and archived webcast of the conference call will be available on SouFun's website at http://ir.soufun.com.
About SouFun
SouFun operates the leading real estate Internet portal in China in terms of the number of page views and visitors to its websites in 2013, according to reports issued by DCCI, an independent market research institution commissioned by us. Through our websites, we provide marketing, e-commerce, listing and other value-added services for China's fast-growing real estate and home furnishing and improvement sectors. Our user-friendly websites support active online communities and networks of users seeking information on, and other value-added services for, the real estate and home-related sectors in China. SouFun currently maintains about 100 offices to focus on local market needs and its website and database contains real estate related content covering more than 330 cities in China. For more information about SouFun, please visit http://ir.soufun.com.
Safe Harbor Statements
This announcement 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. Such forward-looking 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," "is expected to," "anticipates," "aim," "future," "intends," "plans," "believes," "are likely to," "estimates," "may," "should" and similar expressions. Statements that are not historical facts, including statements about SouFun's beliefs and expectations, including but not limited to revenue guidance, growth prospects and the introduction and success of new products and services and new lines of business, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, SouFun's limited operating history, the timing and success of new products and services and any new lines of business, regulatory requirements over the real estate sector in China and for existing and new products and services and any new lines of business, changes in and growth rates for the Chinese and global economies, measures taken or to be taken by the Chinese government to control real estate growth and prices and other events which could occur in the future and impact the Company's business.
Further information regarding these and other risks and uncertainties is included in SouFun's annual report on form 20-F and other documents filed with the U.S. Securities and Exchange Commission. SouFun does not assume any obligation to update any forward-looking statements in this release and elsewhere, which apply only as of the date of this press release.
About Non-GAAP Financial Measures
To supplement SouFun's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), SouFun uses in this press release the following measures defined as non-GAAP financial measures by the United States Securities and Exchange Commission: (1) operating income, (2) net income, (3) basic and diluted earnings per ordinary share and (4) adjusted EBITDA. The presentation of the non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliation of GAAP and non-GAAP Results" set forth at the end of this press release.
SouFun believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expenses and the related tax effects, as well as realized gain on available-for-sale security for the three months ended June 30, 2013, which (1) may not be indicative of SouFun's recurring core business operating results or (2) are not expected to result in future cash payments. These non-GAAP financial measures also facilitate management's internal comparisons to SouFun's historical performance and assist its financial and operational decision making. A limitation of using these non-GAAP financial measures is that share-based compensation has been and will continue to be a significant recurring expense that will continue to exist in SouFun's business for the foreseeable future. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliation between non-GAAP financial measures and their most directly comparable GAAP financial measures.
For investor and media inquiries, please contact:
Mr. Hong Zhao
Vice President - Finance
SouFun Holdings Limited
Phone: +86-10-5631-8707
Email: hongzhao@soufun.com
Or
Ms. Yiwen Zhang
Investor Relations Manager
SouFun Holdings Limited
Phone: +86-10-5631 8659
E-mail: zhangyiwen@soufun.com
SouFun Holdings Limited
Condensed Consolidated Balance Sheet
( in U.S. dollars in thousands )
ASSETS December 31, December 31,
2013 2012
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents 581,010 118,167
Restricted cash, current 255,917 -
Short-term investments 10,138 26,841
Accounts receivable, net 44,541 30,029
Funds receivable 37,124 7,600
Prepayment and other current assets 31,758 9,226
Deferred tax assets, current 3,165 2,734
Total current assets 963,653 194,597
======= =======
Non-current assets:
Property and equipment, net 221,442 79,564
Restricted cash, non-current 257,499 391,416
Deferred tax assets, non current 1,728 1,723
Deposit for non-current assets 38,140 8,750
Prepayment for BaoAn acquisition - 111,367
Other non-current assets 22,627 13,744
Total non-current assets 541,436 606,564
------- -------
Total assets 1,505,089 801,161
========= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term loans 90,000 270,670
Deferred revenue 115,043 65,871
Accrued expenses and other liabilities 143,292 89,306
Income tax payable 43,688 23,659
Customers' refundable fees 53,066 18,449
Amounts due to a related party 537 -
Total current liabilities 445,626 467,955
Non-current liabilities:
Long-term loans 180,750 80,750
Convertible notes 350,000 -
Deferred tax liabilities, non-current 84,767 64,947
Other non-current liabilities 479 -
Total non-current liabilities 615,996 145,697
------- -------
Total Liabilities 1,061,622 613,652
--------- -------
Shareholders' equity:
Class A ordinary shares, par value Hong Kong Dollar
("HK$") 1 per share, 600,000,000 shares authorized for
Class A and Class B in aggregate, and 57,440,895
shares and 56,013,735 shares issued and outstanding as 7,376 7,192
at December 31, 2013 and December 31, 2012,
respectively
Class B ordinary shares, par value HK$1 per share,
600,000,000 shares authorized for Class A and Class B
in aggregate, and 24,336,650 shares and 24,336,650
shares issued and outstanding as at December 31, 2013 3,124 3,124
and December 31, 2012, respectively
Additional paid-in capital 89,071 69,637
Accumulated other comprehensive income 43,381 23,974
Retained earnings 300,515 82,952
Total SouFun Holdings Limited shareholders' equity 443,467 186,879
Noncontrolling interests - 630
Total shareholders' equity 443,467 187,509
TOTAL LIABILITIES AND SHAREHOLDERS' 1,505,089 801,161
EQUITY
SouFun Holdings Limited
Condensed Consolidated Statements of Comprehensive Income
( in U.S. dollars in thousands, except share data and per ADS data )
Three months ended Year ended
December 31, December 31, December 31, December 31,
2013 2012 2013 2012
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Marketing services 97,077 80,234 278,322 249,861
E-commerce services 67,078 40,111 188,107 102,162
Listing services 49,979 26,092 161,547 72,874
Other value-added services 3,019 1,100 9,403 5,361
----- ----- ----- -----
Total revenues 217,153 147,537 637,379 430,258
Cost of Revenues:
Cost of services (27,802) (25,314) (102,488) (80,863)
Total Cost of Revenues (27,802) (25,314) (102,488) (80,863)
Gross Profit 189,351 122,223 534,891 349,395
Operating expenses and
income:
Selling expenses (34,823) (27,815) (101,935) (80,056)
General and administrative expenses (28,161) (24,404) (83,384) (70,780)
Other income 345 - 786 -
--- --- --- ---
Operating Income 126,712 70,004 350,358 198,559
Foreign exchange gain 1 12 3 90
Interest income 8,278 5,455 27,803 19,406
Interest expense (4,488) (3,595) (14,675) (11,630)
Realized gain on available-for-sale security - - 821 -
(including accumulated other comprehensive
income reclassifications for unrealized net gains
on available-for-sale security for nil
and US$821 for the twelve months ended
December 31, 2012 and 2013, respectively)
Government grants 786 194 4,031 1,298
Other-than-temporary impairment on - - - (14)
available-for-sale securities
Gain on bargain purchase - - 102 -
--- --- --- ---
Income before income taxes and 131,289 72,070 368,443 207,709
noncontrolling interests
Income tax expenses
Income tax expense (19,215) (16,310) (69,781) (55,905)
------- ------- ------- -------
Net income 112,074 55,760 298,662 151,804
Net income (loss) attributable to (18) (6) 53 (6)
noncontrolling interests
Net income attributable to SouFun Holdings 112,092 55,766 298,609 151,810
Limited shareholders
Other comprehensive income, net of tax
Foreign currency translation 6,941 3,823 20,150 1,378
Realized gain on available-for-sale security - - (821) -
Unrealized gain on available-for-sale security - 43 78 743
--- --- --- ---
Total other comprehensive income, net of tax 6,941 3,866 19,407 2,121
----- ----- ------ -----
Comprehensive income 119,015 59,626 318,069 153,925
======= ====== ======= =======
Earnings per share for Class A and Class B
ordinary shares
Basic 1.43 0.72 3.82 1.96
==== ==== ==== ====
Diluted 1.27 0.68 3.41 1.85
==== ==== ==== ====
Weighted average number of Class A and
Class B ordinary shares outstanding:
Basic 78,346,884 77,555,412 78,101,205 77,365,156
========== ========== ========== ==========
Diluted 88,469,234 82,433,256 87,787,753 81,924,565
========== ========== ========== ==========
SouFun Holdings Limited
Reconciliation of GAAP and Non-GAAP Results
( in U.S. dollars in thousands, except share data and per share data)
Three months ended Year ended
December 31, December 31, December 31, December 31,
2013 2012 2013 2012
GAAP income from operations 126,712 70,004 350,358 198,559
Share-based compensation expense 1,793 3,153 7,028 7,149
Non-GAAP income from operations 128,505 73,157 357,386 205,708
GAAP net income 112,074 55,760 298,662 151,804
One-off tax benefit - - (15,101) (1,631)
Withholding tax related to dividends 12,103 6,196 28,632 16,867
Realized gain on available-for-sale security - - (821) -
(includes $821 accumulated other comprehensive
income reclassifications for unrealized net gains
on available-for-sale security)
Other-than-temporary impairment on - - - 14
available-for-sale securities
Share-based compensation expense 1,793 3,153 7,028 7,149
Gain on bargain purchase - - (102) -
Non-GAAP net income 125,970 65,109 318,298 174,203
Net Income attributable to SouFun Holdings 112,092 55,766 298,609 151,810
Limited shareholders
One-off tax benefit - - (15,101) (1,631)
Withholding tax related to dividends 12,103 6,196 28,632 16,867
Realized gain on available-for-sale security - - (821) -
(includes $821 accumulated other comprehensive
income reclassifications for unrealized net gains
on available-for-sale security)
Other-than-temporary impairment on - - - 14
available-for-sale securities
Share-based compensation expense 1,793 3,153 7,028 7,149
Gain on bargain purchase - - (102) -
Non-GAAP net Income attributable to SouFun Holdings 125,988 65,115 318,245 174,209
Limited shareholders
GAAP earnings per share for Class A and
Class B ordinary shares:
Basic 1.43 0.72 3.82 1.96
Diluted 1.27 0.68 3.41 1.85
Non-GAAP earnings per share for Class A and
Class B ordinary shares:
Basic 1.61 0.84 4.07 2.25
Diluted 1.42 0.79 3.63 2.13
Weighted average number of Class A and
Class B ordinary shares outstanding:
Basic 78,346,884 77,555,412 78,101,205 77,365,156
Diluted 88,469,234 82,433,256 87,787,753 81,924,565
SouFun Holdings Limited
Reconciliation of Non-GAAP and Adjusted EBITDA
(U.S. dollars in thousands)
Three months ended Year ended
December 31, December 31, December 31, December 31,
2013 2012 2013 2012
Non-GAAP 125,970 65,109 318,298 174,203
Net income
Add back:
Interest
expense 4,488 3,595 14,675 11,630
Income tax
expenses 7,112 10,114 56,250 40,669
Depreciation
expenses 2,722 1,607 9,701 6,376
Subtract:
Interest income (8,278) (5,455) (27,803) (19,406)
Adjusted EBITDA 132,014 74,970 371,121 213,472
SOURCE SouFun Holdings Ltd.
