HOMEINNS HOTEL GROUP SHANGHAI, Nov. 9, 2015 /PRNewswire/ -- Homeinns Hotel Group (NASDAQ: HMIN) ("Homeinns" or "the Company"), a leading economy hotel chain in China, today announced its unaudited financial results for the third quarter ended September 30, 2015.
Third Quarter 2015 Highlights
-- Total revenues decreased 1.1% year over year to RMB 1,855.9 million
(US$292.0 million) for the third quarter of 2015, within the previously
provided guidance range of RMB 1,830 million to RMB 1,860 million.
-- Net income attributable to ordinary shareholders was RMB 145.6 million
(US$22.9 million) for the third quarter of 2015, compared with RMB 245.5
million for the third quarter of 2014. Adjusted net income attributable
to ordinary shareholders (non-GAAP) decreased 8.4% year over year to RMB
205.5 million (US$32.3 million) for the third quarter of 2015.
-- EBITDA (non-GAAP) decreased 20.4% year over year to RMB 429.0 million
(US$67.5 million) for the third quarter of 2015. Adjusted EBITDA
(non-GAAP) decreased 5.5% year over year to RMB 488.9 million (US$76.9
million) for the third quarter of 2015.
-- Net operating cash inflow increased 15.4% year over year to RMB 549.7
million (US$86.5 million) for the third quarter of 2015.
-- As of September 30, 2015, Homeinns operated 2,787 hotels across 346
cities in China, with a net addition of 37 hotels during the third
quarter of 2015.
Mr. David Sun, the Company's chief executive officer, stated, "During the third quarter we experienced an encouraging continued sequential improvement in our business performance with a narrowed like-for-like RevPAR decline, despite sustained macroeconomic challenges. Our revenue growth and RevPAR remained under pressure given the generally soft external conditions. However, we are not seeing any signs of worsening in the domestic travel industry and expect the situation to remain stable for the rest of the year. It is important to note that our focus on developing mid-scale offerings is bearing fruit as Homeinn Plus and Yitel continue to receive very positive market feedback and both are delivering strong results. Further, we are making solid progress with membership expansion and enhancement of our digital capabilities, with both our member count and mobile user levels reaching record highs."
Mr. Sun continued, "Looking to the balance of the year, while we do expect the external market conditions to stay difficult, we remain a strong believer in China's travel industry and leisure market, which have demonstrated great resilience despite the economic slowdown in China. With accelerated development of our mid-scale hotels and stringent cost control, we are confident that we will be able to continue weathering a choppy economic environment, further solidifying our leading position in the market, seizing new growth opportunities, and creating value for our shareholders."
Hotel Development
Hotels in Operations and Pipeline Openings Closures*
--------------------------------- -------- --------
Group Homeinn Motel Fairyland Yitel Homeinn Plus 3Q15 3Q15
----- ------- ----- --------- ----- ------------ ---- ----
Total Number of Hotels 2,787 2,273 409 30 56 19 65 28
Leased-and-Operated 917 693 161 22 26 15 12 10
Franchised-and-Managed 1,870 1,580 248 8 30 4 53 18
Contracted or under Construction 235 141 35 2 22 35
Leased-and-Operated 36 6 6 0 7 17
Franchised-and-Managed 199 135 29 2 15 18
Under Due Diligence 134 116 12 0 3 3
* In the third quarter of 2015, seven hotels were closed to convert to our other brands.
Operating Metrics
Total Hotels Hotels Opened for
at least 18
Months
3Q2015 2Q2015 3Q2014 3Q2015 3Q2014
------ ------ ------ ------ ------
Occupancy Rate 86.6% 83.3% 86.7% 87.5% 88.2%
Average Daily Rate (ADR, RMB) 171 163 174 170 174
Revenue per Available Room (RevPAR, RMB) 148 136 151 149 154
For the third quarter of 2015, occupancy rate decreased by 0.1 percentage points while ADR decreased by 1.7%, resulting in a year-over-year decrease of 1.9% in RevPAR. The decrease in RevPAR was mainly due to continued difficult market conditions in the third quarter. Sequentially, RevPAR increased by 9.1% mainly due to seasonality.
As of September 30, 2015, a total of 2,131 hotels had been in operation for at least 18 months. The occupancy rate of these hotels declined year over year from 88.2% to 87.5%, and ADR decreased year over year from RMB 174 to RMB 170, resulting in a decrease in RevPAR by 3.2% from RMB 154 to RMB 149 during the third quarter of 2015.
Homeinns Hotel Group had a total of 47.0 million unique non-corporate members under its frequent guests program as of September 30, 2015.
Financial Results for Third Quarter 2015
Revenues
(RMB/USD in Millions) Third Quarter 2015 Third
Quarter
2014
--------------------- ------------------ --------
RMB USD RMB V%
--- --- --- ---
Leased-and-Operated Hotels 1,573.7 247.6 1,612.0 -2.4%
Franchised-and-Managed Hotels 282.3 44.4 264.4 6.8%
---------- ----- -----
Total Revenues 1,855.9 292.0 1,876.4 -1.1%
Less: Business Taxes -108.9 -17.1 -111.9 -2.7%
------ ----- ------ ----
Net Revenues 1,747.0 274.9 1,764.4 -1.0%
======= ===== ======= ====
Note: "V%" represents year-over-year percentage change in amounts
Revenues from leased-and-operated hotels decreased 2.4% year over year to RMB 1.57 billion (US$247.6 million) for the third quarter of 2015. The year-over-year decrease in revenues from leased-and-operated hotels was mainly due to a decrease in RevPAR.
Revenues from franchised-and-managed hotels increased 6.8% year over year to RMB 282.3 million (US$44.4 million) for the third quarter of 2015. The year-over-year increase in revenues from franchised-and-managed hotels was mainly driven by an increase in the number of hotels and hotel rooms in operation, although partially offset by a decrease in RevPAR.
Total Operating Costs and Expenses / Income from Operations
(RMB/USD in Millions) Third Quarter 2015
Adjusted
GAAP Results Non-GAAP Results*
RMB USD Vpts RMB USD Vpts
--- --- ---- --- --- ----
Leased-and-Operated Hotel Costs 1,338.2 210.5 3.0pts 1,335.5 210.1 3.0pts
Personnel Costs of Franchised-and-Managed Hotels 82.6 13.0 0.7pts 79.8 12.6 0.7pts
Sales and Marketing Expenses 25.6 4.0 -0.3pts 25.5 4.0 -0.3pts
General and Administrative Expenses 82.7 13.0 0.1pts 63.9 10.1 -0.2pts
---- ---- ------ ---- ---- -------
Total Operating Costs and Expenses 1,529.1 240.6 3.5pts 1,504.8 236.8 3.3pts
Income from Operations 213.8 33.6 -3.6pts 238.0 37.5 -3.4pts
===== ==== ======= ===== ==== =======
*Adjusted Non-GAAP results exclude share-based compensation expenses, integration costs and expenses related to going-private activities.
Note: "Vpts" represents year-over-year change in percentage points of total revenues
Total operating costs and expenses were RMB 1.53 billion (US$240.6 million) for the third quarter of 2015, representing 82.4% of total revenues for the quarter. Total operating costs and expenses excluding any share-based compensation expenses, integration costs and expenses related to going-private activities (non-GAAP) for the third quarter of 2015 were 81.1% of total revenues, compared to 77.8% in the same period a year ago.
-- Total leased-and-operated hotel costs were RMB 1.34 billion (US$210.5
million) for the third quarter of 2015, representing 85.0% of the
leased-and-operated hotel revenues for the quarter, compared to 80.4% in
the same period a year ago. Total leased-and-operated hotel costs
excluding any share-based compensation expenses and integration costs
(non-GAAP) were 84.9% of the leased-and-operated hotel revenues in the
third quarter of 2015, compared to 80.2% in the same period a year ago.
Pre-opening cost was RMB 14.1 million (US$2.2 million) for the third quarter of 2015, compared to RMB 13.3 million in the third quarter of 2014.
The year-over-year increase in total leased-and-operated hotel costs as a percentage of leased-and-operated hotel revenues for the third quarter of 2015 was mainly due to a decrease in RevPAR which resulted in a lower revenue base per hotel while a significant portion of the hotel costs was fixed.
-- Personnel costs of franchised-and-managed hotels were RMB 82.6 million
(US$13.0 million) for the third quarter of 2015, representing 29.3% of
the franchised-and-managed hotel revenues for the third quarter of 2015,
compared to 26.9% in the same period a year ago. Franchised-and-managed
hotels personnel costs excluding share-based compensation expenses
(non-GAAP) were 28.3% of franchised-and-managed hotel revenues in the
third quarter of 2015, compared to 25.9% in the same period of 2014. The
year-over-year increase in personnel costs of franchised-and-managed
hotels as a percentage of franchised-and-managed hotel revenues for the
third quarter of 2015 was mainly due to a decrease in RevPAR, which
resulted in a lower revenue base per hotel.
-- Sales and marketing expenses were RMB 25.6 million (US$4.0 million) for
the third quarter of 2015, representing 1.4% of total revenues for the
quarter, compared to 1.7% in the same period a year ago. Sales and
marketing expenses excluding share-based compensation expenses
(non-GAAP) were 1.4% of total revenues for the third quarter of 2015,
compared to 1.7% in the same period of 2014. The year-over-year decrease
in sales and marketing expenses as a percentage of total revenues for
the third quarter of 2015 was mainly due to the timing of certain
marketing activities and improved marketing efficiency.
-- General and administrative expenses were RMB 82.7 million (US$13.0
million) for the third quarter of 2015, representing 4.5% of total
revenues, compared to 4.3% in the same period a year ago. General and
administrative expenses excluding share-based compensation expenses,
integration costs and expenses related to going-private activities
(non-GAAP) were 3.4% of total revenues for the third quarter of 2015,
compared to 3.6% in the same period of 2014. The year-over-year decrease
in general and administrative expenses as a percentage of total revenue
was driven by continued effective cost control.
Income from Operations was RMB 213.8 million (US$33.6 million) for the third quarter of 2015, compared to income from operations of RMB 284.5 million in the same period a year ago. Income from operations excluding share-based compensation expenses, integration costs and expenses related to going-private activities (non-GAAP) for the third quarter of 2015 was RMB 238.0 million (US$37.5 million), or 12.8% of total revenues, compared to RMB 304.3 million, or 16.2% of total revenues, in the same period of 2014. The year-over-year decrease in income from operations margin for the quarter was mainly due to lower revenue base per hotel.
EBITDA (non-GAAP)
(RMB/USD in Millions) Third Quarter 2015 Third Quarter 2014
------------------ ------------------
RMB USD %Rev V% RMB USD %Rev
--- --- ---- --- --- --- ----
EBITDA (Non-GAAP) 429.0 67.5 23.1% -20.4% 538.8 84.8 28.7%
Foreign Exchange Loss, Net 35.0 5.5 1.9% 0.8 0.1 0.0%
Share-Based Compensation 17.9 2.8 1.0% 18.1 2.8 1.0%
Expenses Related to Going-Private Activities 4.8 0.8 0.3% - - -
Integration Costs 1.6 0.3 0.1% 1.7 0.3 0.1%
Gain on Waived Liability Related with Motel Acquisition - - - -11.9 -1.9 -0.6%
Gain on Buy-Back of Convertible - - - -0.7 -0.1 0.0%
Notes
Loss/(Gain) on Change in Fair Value of Convertible Notes 0.6 0.1 0.0% -29.3 -4.6 -1.6%
--- --- --- ---- ----
Adjusted EBITDA (Non-GAAP) 488.9 76.9 26.3% -5.5% 517.6 81.4 27.6%
===== ==== ==== ==== ===== ==== ====
Note: "%Rev" represents amount as a percentage of total revenues
"V%" represents year-over-year percentage change in amounts
Net Income Attributable to Ordinary Shareholders
(RMB/USD in Millions) Third Quarter 2015 Third Quarter 2014
------------------ ------------------
RMB USD %Rev V% RMB USD %Rev
--- --- ---- --- --- --- ----
Net Income Attributable to Ordinary Shareholders (GAAP) 145.6 22.9 7.8% -40.7% 245.5 38.6 13.1%
Foreign Exchange Loss, Net 35.0 5.5 1.9% 0.8 0.1 0.0%
Share-Based Compensation 17.9 2.8 1.0% 18.1 2.8 1.0%
Expenses Related to Going-Private Activities 4.8 0.8 0.3% - - -
Integration Costs 1.6 0.3 0.1% 1.7 0.3 0.1%
Gain on Waived Liability Related with Motel - - - -11.9 -1.9 -0.6%
Acquisition
Gain on Buy-Back of Convertible Notes - - - -0.7 -0.1 0.0%
Loss/(Gain) on Change in Fair Value of Convertible Notes 0.6 0.1 0.0% -29.3 -4.6 -1.6%
--- --- --- ---- ----
Adjusted net income attributable to ordinary shareholders (Non-GAAP) 205.5 32.3 11.1% -8.4% 224.3 35.3 12.0%
===== ==== ==== ==== ===== ==== ====
Note: "%Rev" represents amount as a percentage of total revenues
"V%" represents year-over-year percentage change in amounts
Adjusted Net Income Attributable to Ordinary Shareholders (Non-GAAP) decreased year over year by 8.4% to RMB 205.5 million (US$32.3 million) for the third quarter of 2015, representing 11.1% of total revenues compared to 12.0% in the same period a year ago. The year-over-year decrease in adjusted net margin (non-GAAP)[1]was mainly due to a decrease in adjusted income from operations margin (non-GAAP)[2], while partially offset by higher interest income and lower interest expense.
Basic and Diluted Earnings Per Share / Earnings Per ADS
Third Quarter 2015
------------------
Ordinary Share ADS Share
RMB USD RMB USD
--- --- --- ---
Basic 1.51 0.24 3.02 0.48
Diluted 1.51 0.24 3.02 0.48
Adjusted Basic (Non-GAAP) 2.13 0.34 4.26 0.67
Adjusted Diluted (Non-GAAP) 2.05 0.32 4.10 0.65
Cash Flow
Net operating cash inflow for the third quarter of 2015 was RMB 549.7 million (US$86.5 million), compared to RMB 476.4 million in the same period of 2014, due to better working capital management. Capitalized expenditures for the third quarter of 2015 were RMB 125.5 million (US$19.8 million), while related cash paid for capital expenditures during the quarter was RMB 129.2 million (US$20.3 million).
Balance Sheet
As of September 30, 2015, Homeinns Hotel Group had cash and cash equivalents of RMB 1,312.3 million (US$206.5 million). The outstanding balance of convertible notes issued in December 2010 (measured at fair value) was RMB 997.2 million (US$156.9 million).
Outlook for Fourth Quarter 2015
Homeinns Hotel Group remains committed to its target of opening no fewer than 400 new hotels in the course of 2015, with approximately 25% as mid-scale hotels.
The company expects the total revenues in the fourth quarter of 2015 to be in the range of RMB 1,635 million and RMB 1,655 million.
This forecast reflects the Company's current and preliminary views, and remains subject to change.
This announcement contains translations of certain RMB amounts into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB 6.3556 to US$1.00, the noon buying rate for September 30, 2015 set forth in the H.10 statistical release of the Federal Reserve Board.
Conference Call Information
Management will hold an earnings conference call at 8 PM U.S. Eastern Time on Monday, November 9, 2015 (9 AM Beijing/Hong Kong Time on Tuesday, November 10, 2015).
Dial-in details for the earnings conference call are as follows:
U.S.: 1855 298 3404 or +1 631 5142 526
China mainland: 4001 200 539
Hong Kong: 800 905 927 or +852 5808 3202
U.K.: 0800 015 9725 or +44 (0) 20 3078 7622
Australia: 1800 801 825 or +61 2 8524 5042
Taiwan: 0080 161 5189 or +886 2 7708 3282
International: +852 5808 3202
Passcode for all regions: Homeinns
A replay of the conference call may be accessed by phone at the following numbers until the end of November 16, 2015 U.S. Eastern Time.
U.S.: 1866 846 0868
China mainland: 4001 842 240
Hong Kong: 800 966 697
U.K.: 0800 169 7301
Australia: +61 2 9641 7900
International: 1800 008 585
Replay Passcode: 7551909
Live and archived webcasts of this conference call will be available at http://english.homeinns.com.
About Homeinns Hotel Group
Homeinns Hotel Group is a leading economy hotel chain in China based on number of hotels and hotel rooms as well as geographic coverage of the hotel chain. Since the Company commenced operations in 2002, it has built Homeinn as one of the best-known economy hotel brands in China. In October of 2011, the Company acquired Motel 168, another well-known hotel chain in China, as its second economy hotel brand. Homeinns Hotel Group aims to offer a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Homeinns Hotel Group's ADSs, each of which represents two ordinary shares, are currently trading on the NASDAQ Global Select Market under the symbol "HMIN." For more information about Homeinns Hotel Group, please visit http://english.homeinns.com.
Safe Harbor
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995.These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Any statements in this press release that are not historical facts are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brands; trends and competition in the lodging industry; 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 does it purport to be complete. We undertake no obligation to update or revise to the public any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
Non-GAAP Financial Measures
To supplement Homeinns Hotel Group's unaudited consolidated financial results presented in accordance with U.S. GAAP, Homeinns Hotel Group uses the following non-GAAP measures:
(a) total operating costs and expenses excluding share-based compensation expenses and acquisition and integration costs and expenses related to going-private activities
(b) total leased-and-operated hotel costs excluding share-based compensation expenses and integration costs
(c) personnel costs of franchised-and-managed hotels excluding share-based compensation expenses
(d) sales and marketing expenses excluding share-based compensation expenses
(e) general and administrative expenses excluding share-based compensation expenses and acquisition and integration costs and expenses related to going-private activities
(f) income from operations excluding share-based compensation expenses and acquisition and integration costs and expenses related to going-private activities
(g) adjusted net income attributable to shareholders excluding any share-based compensation expenses, foreign exchange gain or loss, acquisition and integration cost, upfront fee amortization of term loan, gain or loss from fair value change of convertible notes and interest swap derivatives and other non-operating expenses and expenses related to going-private activities
(h) adjusted basic and diluted earnings per ADS and per share excluding foreign exchange gain or loss, share-based compensation expenses, gain on buy-back of convertible bonds, issuance costs for convertible notes, gain or loss from fair value change of convertible notes, acquisition and integration cost, non-operating expenses and upfront fee amortization of term loan, and expenses related to going-private activities
(i) adjusted EBITDA excluding foreign exchange gain or loss, share-based compensation expenses, gain on buy-back of convertible bonds, issuance costs for convertible notes, gain or loss from fair value change of convertible notes, acquisition and integration costs, non-operating expenses and upfront fee amortization of term loan and expenses related to going-private activities
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.
Homeinns Hotel Group believes that, used in conjunction with GAAP financial measures, these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance, and both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning and forecasting future periods. Management believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization, is a useful financial metric to assess Homeinns Hotel Group's operating and financial performance before the impact of investing and financing transactions and income taxes. In addition, management believes that EBITDA is widely used by other companies in the lodging industry and may be used as an analysis tool by both management and investors to measure and compare Homeinns Hotel Group's operational and financial performance with industry peers.
One of the limitations of using non-GAAP income from operations, EBITDA, adjusted EBITDA and non-GAAP net income attributable to shareholders is that they do not include all items that impact Homeinns Hotel Group's net income (loss) for the period. These non-GAAP measures exclude share-based compensation expenses, foreign exchange gain or loss and gain or loss from fair value change of convertible notes, which have been and will continue to be a significant recurring expense in Homeinns Hotel Group's business. In addition, Homeinns Hotel Group's EBITDA and adjusted EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as Homeinns Hotel Group does. Management compensates for this and other limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. Homeinns Hotel Group computes the non-GAAP financial measures using the same consistent method from quarter to quarter. Reconciliations of GAAP and non-GAAP results are included at the end of this press release. The non-GAAP adjustment items do not include the tax impact.
The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that Homeinns Hotel Group's future results will be unaffected by other charges and gains Homeinns Hotel Group considers to be outside the ordinary course of its business.
Homeinns Hotel Group completed its acquisition of 100% equity interest in Motel 168, or Motel, and took control of Motel effective on October 1, 2011. Homeinns Hotel Group had consolidated Motel's operating and financial results since October 1, 2011. By the third quarter of 2013, Homeinns Hotel Group had substantially completed Motel's integration and ceased to present separate operating metrics and revenues for Motel.
For investor and media inquiries, please contact:
Mingjia Ding
Homeinns Hotel Group
Tel: +86-21-3337-3333*3870
Email: mjding@homeinns.com
Cara O'Brien
FTI Consulting
Tel: +852-3768-4537
Email: cara.obrien@fticonsulting.com
[1]"Adjusted net margin rate (non-
GAAP)" is defined as adjusted net
income (non-GAAP) as a
percentage of total revenues.
[2]"Adjusted income from
operations margin rate (non-
GAAP)" is defined as income from
operations excluding share-based
compensation expenses,
integration costs and expenses
related to going-private
activities (non-GAAP) as a
percentage of total revenues.
Homeinns Hotel Group
Unaudited Condensed Consolidated Balance Sheet
December 31, 2014 September 30, 2015
----------------- ------------------
RMB '000 RMB '000 US$ '000
ASSETS
Current assets:
Cash and cash equivalents 949,690 1,312,278 206,476
Restricted cash 12,726 9,663 1,520
Accounts receivable, net 95,501 135,429 21,309
Receivables from related parties 3,476 4,030 634
Consumables 44,446 32,868 5,172
Prepayments and other current assets 171,703 196,327 30,890
Deferred tax assets 129,685 128,630 20,239
------- ------- ------
Total current assets 1,407,227 1,819,225 286,240
--------- --------- -------
Investment 11,709 14,778 2,325
Property and equipment, net 4,000,041 3,797,253 597,466
Goodwill 2,323,241 2,323,241 365,542
Intangible assets, net 1,126,636 1,089,135 171,366
Other assets 90,995 107,658 16,939
Non-current deferred tax assets 434,847 466,591 73,414
------- ------- ------
Total assets 9,394,696 9,617,881 1,513,292
========= ========= =========
LIABILITIES
Current liabilities:
Accounts payable 86,949 103,909 16,349
Payables to related parties 4,166 18,128 2,852
Financial liability, current portion(2) 1,029,577 997,229 156,906
Salaries and welfare payable 228,127 235,480 37,051
Income tax payable 117,830 86,131 13,552
Other taxes payable 34,074 41,020 6,454
Deferred revenues 225,417 240,357 37,818
Other unpaid and accruals 255,460 269,111 42,342
Other payables 742,853 776,592 122,192
Deferred tax liability 60,764 55,711 8,766
------ ------ -----
Total current liabilities 2,785,217 2,823,668 444,282
--------- --------- -------
Deferred rental 705,284 686,435 108,005
Deferred revenues 51,289 49,931 7,856
Deposits due to franchisees 144,892 152,423 23,982
Other long term payables 13,018 8,653 1,361
Unfavorable lease liabilities 331,282 304,028 47,836
Deferred tax liabilities 292,575 278,057 43,750
------- ------- ------
Total liabilities 4,323,557 4,303,195 677,072
--------- --------- -------
Commitments and contingencies
Shareholders' equity
Ordinary shares (US$0.005 par value; 3,698 3,719 585
200,000,000 shares authorized,
95,703,960 and 96,358,650 shares issued
and outstanding as of December 31, 2014
and September 30, 2015, respectively)
Additional paid-in capital 3,191,076 3,259,755 512,895
Statutory reserves 256,013 256,013 40,281
Retained earnings 1,604,246 1,784,336 280,750
Less: Treasury stock (0 and 37,696 shares - (2,759) (434)
as of December 31, 2014
and September 30 2015, respectively)
Total Home Inns shareholders' equity 5,055,033 5,301,064 834,077
--------- --------- -------
Noncontrolling interests 16,106 13,622 2,143
------ ------ -----
Total shareholders' equity 5,071,139 5,314,686 836,220
--------- --------- -------
Total liabilities and shareholders' equity 9,394,696 9,617,881 1,513,292
========= ========= =========
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.3556 on September 30, 2015, representing the certificated exchange rate published by the Federal Reserve
Board.
Note 2 Financial liabilities represent convertible notes measured at fair value.
Homeinns Hotel Group
Unaudited Condensed Consolidated Statement of Operations
Quarter Ended
-------------
September 30, 2014 June 30, 2015 September 30, 2015
------------------ ------------- ------------------
RMB '000 RMB '000 RMB '000 US$ '000
Revenues:
Leased-and-operated hotels 1,612,027 1,410,555 1,573,685 247,606
Franchised-and-managed hotels 264,358 256,728 282,257 44,411
------- ------- ------- ------
Total revenues 1,876,385 1,667,283 1,855,942 292,017
Less: Business tax and related surcharges (111,943) (98,390) (108,934) (17,140)
-------- ------- -------- -------
Net revenues 1,764,442 1,568,893 1,747,008 274,877
--------- --------- --------- -------
Operating costs and expenses:
Leased-and-operated hotel costs -
Rents and utilities (539,156) (522,581) (554,722) (87,281)
Personnel costs (279,158) (274,804) (293,685) (46,209)
Depreciation and amortization (188,102) (194,646) (200,365) (31,526)
Consumables, food and beverage (108,793) (97,175) (120,355) (18,937)
Others (180,919) (167,466) (169,037) (26,597)
-------- -------- -------- -------
Total leased-and-operated hotel costs (1,296,128) (1,256,672) (1,338,164) (210,550)
Personnel costs of Franchised-and-managed hotels (71,131) (65,966) (82,570) (12,992)
Sales and marketing expenses (31,375) (25,863) (25,626) (4,032)
General and administrative expenses (81,457) (82,735) (82,733) (13,017)
------- ------- ------- -------
Total operating costs and expenses (1,480,091) (1,431,236) (1,529,093) (240,591)
---------- ---------- ---------- --------
Other income/(loss) 139 (9,826) (4,165) (655)
Income/(loss) from operations 284,490 127,831 213,750 33,631
------- ------- ------- ------
Interest income 2,864 4,055 6,610 1,040
Interest expenses (11,040) (5,456) (5,303) (834)
Loss from equity investment (10) (920) (163) (26)
Gain/(loss) on change in fair value of convertible notes 29,304 (17,016) (570) (90)
Gain/(loss) on buy-back of convertible notes 650 (1,591) - -
Non-operating income 27,073 10,575 44,146 6,946
Foreign exchange (loss)/gain, net (841) 3,914 (35,012) (5,509)
---- ----- ------- ------
Income before income tax expenses and noncontrolling interests 332,490 121,392 223,458 35,158
------- ------- ------- ------
Income tax expense (84,384) (48,802) (74,270) (11,686)
Net income 248,106 72,590 149,188 23,472
------- ------ ------- ------
Less:Net income attributable to noncontrolling (2,594) (528) (3,590) (565)
interests
Net income attributable to ordinary shareholders 245,512 72,062 145,598 22,907
======= ====== ======= ======
Earnings per share
-- Basic 2.57 0.75 1.51 0.24
==== ==== ==== ====
-- Diluted 2.15 0.75 1.51 0.24
==== ==== ==== ====
Weighted average ordinary shares outstanding
-- Basic 95,556 96,215 96,347 96,347
====== ====== ====== ======
-- Diluted 103,025 96,215 96,347 96,347
======= ====== ====== ======
Share-based compensation expense was included in the statement of operations as follows:
Leased-and-operated hotel costs - Personnel costs 1,525 1,511 1,349 212
Personnel costs of Franchised-and-managed hotels 2,679 3,057 2,727 429
Sales and marketing expenses 246 151 129 20
General and administrative expenses 13,663 11,877 13,684 2,153
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.3556
on September 30, 2015, representing the certificated exchange rate published by the Federal Reserve Board.
Homeinns Hotel Group
Reconciliation of GAAP and Non-GAAP Results
Quarter Ended September 30, 2015
--------------------------------
GAAP %of Total Revenue Share-based Expenses related to Integration %of Total Revenue Non-GAAP Result %of Total
Result Compensation going private activities cost Revenue
------ ------------ ------------------------ ---- -------
RMB '000 RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,338,164) 72.1% 1,349 - 1,295 0.1% (1,335,520) 72.0%
Personnel costs of Franchised-and-managed hotels (82,570) 4.4% 2,727 - - 0.1% (79,843) 4.3%
Sales and marketing expenses (25,626) 1.4% 129 - - 0.0% (25,497) 1.4%
General and administrative expenses (82,733) 4.5% 13,684 4,797 317 1.0% (63,935) 3.4%
------- ------ ----- --- -------
Total operating costs and expenses (1,529,093) 82.4% 17,889 - 1,612 1.3% (1,504,795) 81.1%
========== ====== === ===== ==========
Income from operations 213,750 11.5% 17,889 - 1,612 1.3% 238,048 12.8%
======= ====== === ===== =======
Quarter Ended September 30, 2015
--------------------------------
GAAP %of Total Revenue Share-based Expenses related to Integration %of Total Non-GAAP Result %of Total Revenue
Result Compensation going private activities cost Revenue
------ ------------ ------------------------ ---- -------
US$ '000 US$ '000 US$ '000 US$ '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (210,550) 72.1% 212 - 204 0.1% (210,134) 72.0%
Personnel costs of Franchised-and-managed hotels (12,992) 4.4% 429 - - 0.1% (12,563) 4.3%
Sales and marketing expenses (4,032) 1.4% 20 - - 0.0% (4,012) 1.4%
General and administrative expenses (13,017) 4.5% 2,153 755 50 1.0% (10,059) 3.4%
------- ----- --- --- -------
Total operating costs and expenses (240,591) 82.4% 2,814 - 254 1.3% (236,768) 81.1%
======== ===== === === ========
Income from operations 33,631 11.5% 2,814 - 254 1.3% 37,454 12.8%
====== ===== === === ======
Quarter Ended June 30, 2015
---------------------------
GAAP %of Total Share-based Expenses related to Integration %of Total Revenue Non-GAAP Result %of Total Revenue
Result Revenue Compensation going private activities cost
------ ------- ------------ ------------------------ ----
RMB '000 RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,256,672) 75.4% 1,511 - 1,322 0.2% (1,253,839) 75.2%
Personnel costs of Franchised-and-managed hotels (65,966) 4.0% 3,057 - - 0.2% (62,909) 3.8%
Sales and marketing expenses (25,863) 1.6% 151 - - 0.0% (25,712) 1.5%
General and administrative expenses (82,735) 5.0% 11,877 - 317 0.7% (70,541) 4.2%
------- ------ --- --- -------
Total operating costs and expenses (1,431,236) 85.8% 16,596 - 1,639 1.1% (1,413,001) 84.7%
========== ====== === ===== ==========
Income from operations 127,831 7.7% 16,596 - 1,639 1.1% 146,066 8.8%
======= ====== === ===== =======
Quarter Ended September, 2014
-----------------------------
GAAP %of Total Revenue Share-based Expenses related to Integration %of Total Revenue Non-GAAP Result %of Total
Result Compensation going private activities cost Revenue
------ ------------ ------------------------ ---- -------
RMB '000 RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,296,128) 69.1% 1,525 - 1,427 0.2% (1,293,176) 68.9%
Personnel costs of Franchised-and-managed hotels (71,131) 3.8% 2,679 - - 0.1% (68,452) 3.6%
Sales and marketing expenses (31,375) 1.7% 246 - - 0.0% (31,129) 1.7%
General and administrative expenses (81,457) 4.3% 13,663 - 317 0.7% (67,477) 3.6%
------- ------ --- --- -------
Total operating costs and expenses (1,480,091) 78.9% 18,113 - 1,744 1.1% (1,460,234) 77.8%
========== ====== === ===== ==========
Income from operations 284,490 15.2% 18,113 - 1,744 1.1% 304,347 16.2%
======= ====== === ===== =======
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.3556
on September 30, 2015, representing the certificated exchange rate published by the Federal Reserve Board.
Homeinns Hotel Group
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended
-------------
September 30, 2014 June 30, 2015 September, 2015
------------------ ------------- ---------------
RMB '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Net income attributable to ordinary shareholders (GAAP) 245,512 72,062 145,598 22,907
Foreign exchange loss/(gain), net 841 (3,914) 35,012 5,509
Share-based compensation 18,113 16,596 17,889 2,814
Expenses related to going private activities - - 4,797 755
Integration cost 1,744 1,639 1,612 254
(Gain)/loss on buy-back of convertible notes (650) 1,591 - -
Gain on waived liability related with Motel acquisition (11,919) - - -
(Gain)/loss on change in fair value of convertible notes (29,304) 17,016 570 90
------- ------ --- ---
Adjusted net income attributable to ordinary shareholders (Non-GAAP) 224,337 104,990 205,478 32,329
======= ======= ======= ======
Quarter Ended
-------------
September 30, 2014 June 30, 2015 September, 2015
------------------ ------------- ---------------
RMB '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Earnings per share (GAAP)
-- Basic 2.57 0.75 1.51 0.24
==== ==== ==== ====
-- Diluted 2.15 0.75 1.51 0.24
==== ==== ==== ====
Weighted average ordinary shares outstanding
-- Basic 95,556 96,215 96,347 96,347
====== ====== ====== ======
-- Diluted 103,025 96,215 96,347 96,347
======= ====== ====== ======
Adjusted earnings per share (Non-GAAP)
-- Basic 2.35 1.09 2.13 0.34
==== ==== ==== ====
-- Diluted 2.23 1.07 2.05 0.32
==== ==== ==== ====
Weighted average ordinary shares outstanding
-- Basic 95,556 96,215 96,347 96,347
====== ====== ====== ======
-- Diluted 103,025 102,917 102,702 102,702
======= ======= ======= =======
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.3556
on September 30, 2015, representing the certificated exchange rate published by the Federal Reserve Board.
Note 2: The non-GAAP adjustment items do not include the tax impact.
Homeinns Hotel Group
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended
-------------
September 30, 2014 June 30, 2015 September 30, 2015
------------------ ------------- ------------------
RMB '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Net income 248,106 72,590 149,188 23,472
Interest income (2,864) (4,055) (6,610) (1,040)
Interest expenses 11,040 5,456 5,303 834
Income tax expense 84,384 48,802 74,270 11,686
Depreciation and amortization 198,086 200,383 206,823 32,542
------- ------- ------- ------
EBITDA (Non-GAAP) 538,752 323,176 428,974 67,494
------- ------- ------- ------
Foreign exchange loss/(gain), net 841 (3,914) 35,012 5,509
Share-based compensation 18,113 16,596 17,889 2,814
Expenses related to going private activities - - 4,797 755
Integration cost 1,744 1,639 1,612 254
Gain on waived liability related with Motel acquisition (11,919) - - -
(Gain)/loss on buy-back of convertible notes (650) 1,591 - -
(Gain)/loss on change in fair value of convertible notes (29,304) 17,016 570 90
------- ------ --- ---
Adjusted EBITDA (Non-GAAP) 517,577 356,104 488,854 76,916
======= ======= ======= ======
%of total revenue 27.6% 21.4% 26.3% 26.3%
Note 1: The "Depreciation and amortization expense" includes the depreciation and amortization expenses of the Group.
The depreciation and amortization expenses of all leased-and-operated hotels are included in "Operating costs and expenses".
The depreciation and amortization expenses of administrative long-term assets are included in "General and administrative expenses".
Home Inns & Hotels Management Inc.
Operating Data
As of and for the quarter ended
-------------------------------
September 30, 2014 June 30, 2015 September 30, 2015
------------------ ------------- ------------------
Group Group Group
Total Hotels in operation: 2,496 2,750 2,787
Leased-and-operated hotels 910 915 917
Franchised-and-managed hotels 1,586 1,835 1,870
Total rooms 286,012 309,414 311,608
Occupancy rate (as a percentage) 86.7% 83.3% 86.6%
Average daily rate (in RMB) 174 163 171
RevPAR (in RMB) 151 136 148
Like-for-like performance for hotels opened for at least 18 months at the end of the period
As of and for the quarter ended
-------------------------------
September 30, 2014 September 30, 2015
------------------ ------------------
Group Group
Total Hotels in operation: 2,131 2,131
Leased-and-operated hotels 866 866
Franchised-and-managed hotels 1,265 1,265
Total rooms 243,858 243,858
Occupancy rate (as a percentage) 88.2% 87.5%
Average daily rate (in RMB) 174 170
RevPAR (in RMB) 154 149
"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.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/homeinns-hotel-group-reports-third-quarter-2015-financial-results-300174773.html
SOURCE Homeinns
