HOMEINNS HOTEL GROUP SHANGHAI, Aug. 11, 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 second quarter ended June 30, 2015.
Second Quarter 2015 Highlights
-- Total revenues decreased 1.8% year over year to RMB 1,667 million
(US$268.9 million) for the second quarter of 2015, slightly lower than
the previously provided guidance of RMB 1,670 million to RMB 1,700
million.
-- Net income attributable to ordinary shareholders was RMB 72.1 million
(US$11.6 million) for the second quarter of 2015, compared with net
income of RMB 108.2 million for the second quarter of 2014. Adjusted net
income attributable to ordinary shareholders (non-GAAP) decreased 37.7%
year over year to RMB 105.0 million (US$16.9 million) for the second
quarter of 2015.
-- EBITDA (non-GAAP) decreased 15.4% year over year to RMB 323.2 million
(US$52.1 million) for the second quarter of 2015. Adjusted EBITDA
(non-GAAP) decreased 19.5% year over year to RMB 356.1 million (US$57.4
million) for the second quarter of 2015.
-- Net operating cash inflow decreased 3.5% year over year to RMB 352.8
million (US$56.9 million) for the second quarter of 2015.
-- As of June 30, 2015, Homeinns Hotel Group operated 2,750 hotels across
342 cities in China, with a net addition of 89 hotels during the second
quarter of 2015.
Mr. David Sun, the Company's chief executive officer, stated, "During the second quarter, we continued to face challenges associated with sustained difficult market conditions. Yet, we also continued to take important and necessary steps to make long-term investments in our business. Revenue growth and RevPAR remained under pressure given the surrounding economic climate. This, coupled with higher pre-opening costs, impacted our overall financial performance. However, we believe that our strategy to accelerate the development of mid-scale hotel offerings serves our overall best interest, given its encouraging performance to date. Moreover, during the second quarter, there were a number of other quite positive developments. In addition to further building our mid-scale offerings, Homeinn Plus and Yitel, we had great success in further enhancing our digital capabilities and membership recruitment, with both our mobile app user levels and our membership numbers reaching new highs. Lastly, we continued to control costs and improve efficiencies. All of this is keeping our operating foundation strong."
Mr. Sun continued, "As we move into the second half of 2015, we expect the external conditions to remain quite challenging, and we are not counting on a market rebound in the remainder of the year. However, as we have stated before, we believe that the long-term prospects of the travel and lodging market in China are and will stay very strong and Homeinns is set to remain one of the strongest players in the industry. While further diversifying our product offerings, we will also develop unique ways to engage customers via traditional and digital marketing channels, and additionally maintain strict levels of operating discipline. This will all work together to ensure Homeinns perform very well over the long-term and deliver value to its customers, employees, business partners and shareholders."
Hotel Development
Hotels in Operations and Pipeline Openings Closures
--------------------------------- -------- --------
Group Homeinn Motel Fairyland Yitel Homeinn Plus* 2Q15 2Q15
----- ------- ----- --------- ----- ------------ ---- ----
Total Number of Hotels 2,750 2,250 410 31 50 9 126 37**
Leased-and-Operated 915 699 163 22 23 8 14 11
Franchised-and-Managed 1,835 1,551 247 9 27 1 112 26
Contracted or Under Construction 184 122 28 1 19 14
Leased-and-Operated 27 6 5 0 8 8
Franchised-and-Managed 157 116 23 1 11 6
Under Due Diligence 165 134 19 0 4 8
* "Homeinn Plus", a mid-scale brand newly launched in April 2015
** Among these closures, seven leased-and-operated hotels were closed due to conversion to Homeinn Plus and two leased-and-operated hotels were closed and converted to franchised-and-managed hotels.
Operating Metrics
Total Hotels Hotels Opened for
at least 18 Months
------------------
2Q2015 1Q2015 2Q2014 2Q2015 2Q2014
------ ------ ------ ------ ------
Occupancy Rate 83.3% 79.3% 86.7% 84.7% 88.1%
Average Daily Rate (ADR, RMB) 163 151 164 163 164
Revenue per Available Room (RevPAR, RMB) 136 120 142 138 145
For the second quarter of 2015, occupancy rate decreased by 3.4 percentage points while ADR decreased by 0.6%, resulting in a year-over-year decrease of 4.2% in RevPAR. The decrease in RevPAR was mainly due to continued difficult market conditions in the second quarter of 2015. Sequentially, RevPAR increased by 13.3% mainly due to seasonality. The first quarter is normally the slowest period in a year for the Company and the overall hotel industry.
As of June 30, 2015, a total of 2,103 hotels had been in operation for at least 18 months. The occupancy rate of these hotels declined year over year from 88.1% to 84.7%, and ADR decreased year over year from RMB 164 to RMB 163, resulting in a decrease in RevPAR by 4.8% from RMB145 to RMB138 during the second quarter of 2015.
Homeinns Hotel Group had a total of 38.6 million unique non-corporate members under its frequent guests program as of June 30, 2015.
Financial Results for Second Quarter2015
Revenues
(RMB/USD in Millions) Second Quarter 2015 Second Quarter
2014
---------------------------------------------------------------------------- ------------------- ---------------
RMB USD RMB V%
--- --- --- ---
Leased-and-Operated Hotels 1,410.6 227.5 1,459.5 -3.4%
Franchised-and-Managed Hotels 256.7 41.4 239.1 7.4%
----- ---- ----
Total Revenues 1,667.3 268.9 1,698.6 -1.8%
Less: Business Taxes -98.4 -15.9 -104.6 -5.9%
----- ----- ------ ----
Net Revenues 1,568.9 253.0 1,594.0 -1.6%
======= ===== ======= ====
Note: "V%" represents year-over-year percentage change in amounts
Revenues from leased-and-operated hotels decreased 3.4% year over year to RMB 1.41 billion (US$227.5 million) for the second 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 7.4% year over year to RMB 256.7 million (US$41.4 million) for the second 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, partially offset by a decrease in RevPAR.
Total Operating Costs and Expenses / Income from Operations
(RMB/USD in Millions) Second Quarter 2015
Adjusted
GAAP Results Non-GAAP Results*
RMB USD Vpts RMB USD Vpts
--- --- ---- --- --- ----
Leased-and-Operated Hotel Costs 1,256.7 202.7 3.8pts 1,253.8 202.2 3.8pts
Personnel Costs of Franchised-and-Managed Hotels 66.0 10.6 0.6pts 62.9 10.1 0.6pts
Sales and Marketing Expenses 25.9 4.2 -0.2pts 25.7 4.1 -0.3pts
General and Administrative Expenses 82.7 13.3 0.2pts 70.5 11.4 0.5pts
---- ---- ------ ---- ---- ------
Total Operating Costs and Expenses 1,431.2 230.8 4.2pts 1,413.0 227.9 4.5pts
Income from Operations 127.8 20.6 -4.7pts 146.1 23.6 -5.1pts
===== ==== ======= ===== ==== =======
*Adjusted Non-GAAP results exclude share-based compensation expenses and integration costs.
Note: "Vpts" represents year-over-year change in percentage points of total revenues
Total operating costs and expenses were RMB 1.43 billion (US$230.8 million) for the second quarter of 2015, representing 85.8% of total revenues for the quarter. Total operating costs and expenses excluding any share-based compensation expenses and integration costs (non-GAAP) for the second quarter of 2015 were 84.7% of total revenues, compared to 80.2% in the same period a year ago.
-- Total leased-and-operated hotel costs were RMB 1.26 billion (US$202.7
million) for the second quarter of 2015, representing 89.1% of the
leased-and-operated hotel revenues for the quarter, compared to 83.4% 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 88.9% of the leased-and-operated hotel revenues in the
second quarter of 2015, compared to 83.1% in the same period a year
ago.Pre-opening cost was RMB 19.9 million (US$3.2 million) for the
second quarter of 2015, compared to RMB6.8 million in the second quarter
of 2014. The increase is associated with a higher number of mid-scale
hotels under construction.The year-over-year increase in total
leased-and-operated hotel costs as a percentage of leased-and-operated
hotel revenues for the second 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 cost was fixed, as well as to
the higher pre-opening cost in the second quarter of 2015.
-- Personnel costs of franchised-and-managed hotels were RMB 66.0 million
(US$10.6 million) for the second quarter of 2015, representing 25.7% of
the franchised-and-managed hotel revenues for the second quarter of
2015, compared to 24.0% in the same period a year ago.
Franchised-and-managed hotels personnel costs excluding share-based
compensation expenses (non-GAAP) were 24.5% of franchised-and-managed
hotel revenues in the second quarter of 2015, compared to 22.6% 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 second quarter of 2015 was mainly due to a
decrease in RevPAR, which resulted in a lower revenue base per hotel,
partially offset by lower performance-related bonuses in the quarter.
-- Sales and marketing expenses were RMB 25.9 million (US$4.2 million) for
the second quarter of 2015, representing 1.6% of total revenues for the
quarter, compared to 1.8% in the same period a year ago. Sales and
marketing expenses excluding share-based compensation expenses
(non-GAAP) were 1.5% of total revenues for the second quarter of 2015,
compared to 1.8% in the same period of 2014. The year-over-year decrease
in sales and marketing expenses as a percentage of total revenues for
the second quarter of 2015 was mainly due to the timing of certain
marketing activities.
-- General and administrative expenses were RMB 82.7 million (US$13.3
million) for the second quarter of 2015, representing 5.0% of total
revenues, compared to 4.8% in the same period a year ago. General and
administrative expenses excluding share-based compensation expenses and
integration costs (non-GAAP) were 4.2% of total revenues for the second
quarter of 2015, compared to 3.7% in the same period of 2014. The
increase is due to a bad debt provision related to a specific hotel
project.
Income from Operations was RMB 127.8million (US$20.6 million) for the second quarter of 2015, compared to income from operations of RMB 211.3 million in the same period a year ago. Income from operations excluding share-based compensation expenses and integration costs (non-GAAP) for the second quarter of 2015 was RMB146.1 million (US$23.6 million), or 8.8% of total revenues, compared to RMB 236.4 million, or 13.9% 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 and higher pre-opening cost.
EBITDA (non-GAAP)
(RMB/USD in Millions) Second Quarter 2015 Second Quarter 2014
------------------- -------------------
RMB USD %Rev V% RMB USD %Rev
--- --- ---- --- --- --- ----
EBITDA (Non-GAAP) 323.2 52.1 19.4% -15.4% 382.1 61.6 22.5%
Net Foreign Exchange (Gain)/Loss -3.9 -0.6 -0.2% 0.1 0.0 0.0%
Share-Based Compensation Expenses 16.6 2.7 1.0% 22.8 3.7 1.3%
Acquisition Expenses - - - 0.7 0.1 0.0%
Integration Cost 1.6 0.3 0.1% 1.6 0.3 0.1%
Loss on Buy-Back of Convertible Notes 1.6 0.3 0.1% - - -
Loss on Fair Value Change in Convertible Notes 17.0 2.7 1.0% 35.0 5.6 2.1%
-------- ---- --- ---- ---
Adjusted EBITDA (Non-GAAP) 356.1 57.4 21.4% -19.5% 442.3 71.3 26.0%
===== ==== ==== ===== ===== ==== ====
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) Second Quarter 2015 Second Quarter 2014
------------------- -------------------
RMB USD %Rev V% RMB USD %Rev
--- --- ---- --- --- --- ----
Net Income (GAAP) 72.1 11.6 4.3% -33.4% 108.2 17.4 6.4%
Net Foreign Exchange (Gain)/Loss -3.9 -0.6 -0.2% 0.1 0.0 0.0%
Share-Based Compensation Expenses 16.6 2.7 1.0% 22.8 3.7 1.3%
Acquisition Expenses - - - 0.7 0.1 0.0%
Integration Cost 1.6 0.3 0.1% 1.6 0.3 0.1%
Loss on Buy-Back of Convertible Notes 1.6 0.3 0.1% - - -
Loss on Fair Value Change in Convertible Notes 17.0 2.7 1.0% 35.0 5.6 2.1%
---- --- --- --- ---
Adjusted Net Income (Non-GAAP) 105.0 16.9 6.3% -37.7% 168.4 27.2 9.9%
===== ==== === ===== ===== ==== ===
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 37.7%to RMB 105.0 million (US$16.9 million) for the second quarter of 2015, representing 6.3% of total revenues compared to 9.9% 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.
[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 and
integration costs (non-GAAP) as
a percentage of total revenues.
Basic and Diluted Earnings Per Share / Earnings Per ADS
Second Quarter 2015
-------------------
Ordinary Share ADS Share
RMB USD RMB USD
--- --- --- ---
Basic 0.75 0.12 1.50 0.24
Diluted 0.75 0.12 1.50 0.24
Adjusted Basic (Non-GAAP) 1.09 0.18 2.18 0.35
Adjusted Diluted (Non-GAAP) 1.07 0.17 2.14 0.35
Cash Flow
Net operating cash inflow for the second quarter of 2015 was RMB352.8million (US$56.9million), compared to RMB 365.8 million in the same period of 2014. Capitalized expenditures for the second quarter of 2015 were RMB 196.6 million (US$31.7 million), while related cash paid for capital expenditures during the quarter was RMB124.6million (US$20.1 million).
Balance Sheet
As of June 30, 2015, Homeinns Hotel Group had cash and cash equivalents of RMB 891.0million (US$143.7 million). The outstanding balance of convertible notes issued in December 2010 (measured at fair value) was RMB953.1million (US$153.7 million).
Outlook for Third 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 10% as leased-and-operated hotels and 90% as franchised-and-managed hotels.
The Company expects its total revenues in the third quarter of 2015 to be in the range of RMB 1,830 million to RMB1,860 million.
With respect to the full year, given its performance in the first half of 2015 and the ongoing softer-than-expected market conditions, the Company now expects total revenues for 2015 to be in the range of RMB 6,550 million to RMB 6,650 million, below the initial guidance provided at the beginning of the year.
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 RMB6.2000to US$1.00, the noon buying rate for June 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 9 PM U.S. Eastern Time on Tuesday, August11, 2015 (9 AM Beijing/Hong Kong Time on Wednesday, August 12, 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 August 18, 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: 9019076
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
(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
(f) income from operations excluding share-based compensation expenses and acquisition and integration costs
(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
(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
(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
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
Homeinns Hotel Group
Unaudited Condensed Consolidated Balance Sheet
December 31, 2014 June 30, 2015
----------------- -------------
RMB '000 RMB '000 US$ '000
ASSETS
Current assets:
Cash and cash equivalents 949,690 890,956 143,703
Restricted cash 12,726 28,949 4,669
Accounts receivable, net 95,501 112,484 18,143
Receivables from related
parties 3,476 5,698 919
Consumables 44,446 35,745 5,765
Prepayments and other current
assets 171,703 181,943 29,346
Deferred tax assets 129,685 138,771 22,382
------- ------- ------
Total current assets 1,407,227 1,394,546 224,927
--------- --------- -------
Investment 11,709 14,740 2,377
Property and equipment, net 4,000,041 3,885,761 626,736
Goodwill 2,323,241 2,323,241 374,716
Intangible assets, net 1,126,636 1,101,225 177,617
Other assets 90,995 111,422 17,971
Non-current deferred tax
assets 434,847 459,542 74,120
------- ------- ------
Total assets 9,394,696 9,290,477 1,498,464
========= ========= =========
LIABILITIES
Current liabilities:
Accounts payable 86,949 77,051 12,428
Payables to related parties 4,166 6,838 1,103
Financial liability, current
portion(2) 1,029,577 953,055 153,719
Salaries and welfare payable 228,127 168,940 27,248
Income tax payable 117,830 61,316 9,890
Other taxes payable 34,074 34,356 5,541
Deferred revenues 225,417 226,954 36,605
Other unpaid and accruals 255,460 257,644 41,555
Other payables 742,853 732,535 118,151
Deferred tax liability 60,764 60,764 9,801
------ ------ -----
Total current liabilities 2,785,217 2,579,453 416,041
--------- --------- -------
Deferred rental 705,284 755,024 121,778
Deferred revenues 51,289 48,060 7,752
Deposits due to franchisees 144,892 149,852 24,170
Other long term payables 13,018 9,229 1,489
Unfavorable lease liabilities 331,282 313,113 50,502
Deferred tax liabilities 292,575 280,818 45,293
------- ------- ------
Total liabilities 4,323,557 4,135,549 667,025
--------- --------- -------
Commitments and contingencies
Shareholders' equity
Ordinary shares (US$0.005 par
value; 200,000,000 shares
authorized, 95,703,960 and
96,339,900 shares issued and
outstanding as of December
31, 2014 and June 30 2015,
respectively) 3,698 3,719 600
Additional paid-in capital 3,191,076 3,241,809 522,872
Statutory reserves 256,013 256,013 41,292
Retained earnings 1,604,246 1,638,737 264,312
Less: Treasury stock (0 and
37,696 shares as of December
31, 2014 - (2,759) (445)
and June 30 2015,
respectively)
Total Home Inns shareholders'
equity 5,055,033 5,137,519 828,631
--------- --------- -------
Noncontrolling interests 16,106 17,409 2,808
------ ------ -----
Total shareholders' equity 5,071,139 5,154,928 831,439
--------- --------- -------
Total liabilities and
shareholders' equity 9,394,696 9,290,477 1,498,464
========= ========= =========
- - -
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2000 on June 30, 2015, representing the
certificated exchange rate published by the Federal Reserve Board.
Note 2?Financial liabilities represent convertible notes measured at fair value.
Homeinns Hotel Group
Unaudited Condensed Consolidated Statement of Operations
Quarter Ended
-------------
June 30, 2014 March 31, 2015 June 30, 2015
------------- -------------- -------------
RMB '000 RMB '000 RMB '000 US$ '000
Revenues:
Leased-and-operated hotels 1,459,489 1,244,734 1,410,555 227,509
Franchised-and-managed hotels 239,113 225,733 256,728 41,408
------- ------- ------- ------
Total revenues 1,698,602 1,470,467 1,667,283 268,917
Less: Business tax and related
surcharges (104,588) (88,351) (98,390) (15,869)
-------- ------- ------- -------
Net revenues 1,594,014 1,382,116 1,568,893 253,048
--------- --------- --------- -------
Operating costs and expenses:
Leased-and-operated hotel costs -
Rents and utilities (509,722) (583,473) (522,581) (84,287)
Personnel costs (269,365) (276,076) (274,804) (44,323)
Depreciation and amortization (186,823) (195,595) (194,646) (31,395)
Consumables, food and beverage (85,765) (78,239) (97,175) (15,673)
Others (165,071) (130,786) (167,466) (27,011)
-------- -------- -------- -------
Total leased-and-operated hotel costs (1,216,746) (1,264,169) (1,256,672) (202,689)
Personnel costs of Franchised-and-
managed hotels (57,284) (44,013) (65,966) (10,640)
Sales and marketing expenses (30,703) (22,250) (25,863) (4,171)
General and administrative expenses (81,968) (73,916) (82,735) (13,344)
------- ------- ------- -------
Total operating costs and expenses (1,386,701) (1,404,348) (1,431,236) (230,844)
---------- ---------- ---------- --------
Other income/(loss) 3,967 11,525 (9,826) (1,585)
Income/(loss) from operations 211,280 (10,707) 127,831 20,619
------- ------- ------- ------
Interest income 1,677 4,339 4,055 654
Interest expenses (13,064) (5,667) (5,456) (880)
Gain/(loss) from equity investment 189 (98) (920) (148)
Loss on change in fair value of
convertible notes (35,016) (9,583) (17,016) (2,745)
Loss on buy-back of convertible notes - (91) (1,591) (257)
Non-operating income 13,266 17 10,575 1,706
Foreign exchange (loss)/gain, net (109) (4,061) 3,914 631
---- ------ ----- ---
Income/(loss) before income tax
expenses and noncontrolling interests 178,223 (25,851) 121,392 19,580
------- ------- ------- ------
Income tax expense (68,410) (10,946) (48,802) (7,871)
Net income/(loss) 109,813 (36,797) 72,590 11,709
------- ------- ------ ------
Less:Net income attributable to
noncontrolling interests (1,647) (774) (528) (85)
------ ---- ---- ---
Net income/(loss) attributable to
ordinary shareholders 108,166 (37,571) 72,062 11,624
======= ======= ====== ======
Earnings per share
- Basic 1.14 (0.39) 0.75 0.12
==== ===== ==== ====
- Diluted 1.13 (0.39) 0.75 0.12
==== ===== ==== ====
Weighted average ordinary shares outstanding
- Basic 95,285 95,776 96,215 96,215
====== ====== ====== ======
- Diluted 95,407 95,776 96,215 96,215
====== ====== ====== ======
Share-based compensation expense was included in
the statement of operations as follows:
Leased-and-operated hotel costs -
Personnel costs 1,889 2,016 1,511 244
Personnel costs of Franchised-and-
managed hotels 3,156 3,817 3,057 493
Sales and marketing expenses 154 241 151 24
General and administrative expenses 17,583 18,227 11,877 1,916
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2000 on June 30, 2015, representing the certificated exchange rate published by the Federal
Reserve Board.
Homeinns Hotel Group
Reconciliation of GAAP and Non-GAAP Results
Quarter Ended June 30, 2015
---------------------------
GAAP %of Total Share-based Acquisition Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation expenses cost Revenue Revenue
------ ------- ------------ -------- ---- ------- -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,256,672) 75.4% 1,511 - 1,322 0.2% (1,253,839) 75.2%
Personnel costs of Franchised-and-managed hotels (65,966) 4.0% 3,057 - - 0.2% (62,909) 3.8%
Sales and marketing expenses (25,863) 1.6% 151 - - 0.0% (25,712) 1.5%
General and administrative expenses (82,735) 5.0% 11,877 - 317 0.7% (70,541) 4.2%
------- ------ --- --- -------
Total operating costs and expenses (1,431,236) 85.8% 16,596 - 1,639 1.1% (1,413,001) 84.7%
========== ====== === ===== ==========
Income from operations 127,831 7.7% 16,596 - 1,639 1.1% 146,066 8.8%
======= ====== === ===== =======
Quarter Ended June 30, 2015
---------------------------
GAAP %of Total Share-based Acquisition Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation expenses cost Revenue Revenue
------ ------- ------------ -------- ---- ------- -------
US$ '000 US$ '000 US$ '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (202,689) 75.4% 244 - 213 0.2% (202,232) 75.2%
Personnel costs of Franchised-and-managed hotels (10,640) 4.0% 493 - - 0.2% (10,147) 3.8%
Sales and marketing expenses (4,171) 1.6% 24 - - 0.0% (4,147) 1.5%
General and administrative expenses (13,344) 5.0% 1,916 - 51 0.7% (11,377) 4.2%
------- ----- --- --- -------
Total operating costs and expenses (230,844) 85.8% 2,677 - 264 1.1% (227,903) 84.7%
======== ===== === === ========
Income from operations 20,619 7.7% 2,677 - 264 1.1% 23,560 8.8%
====== ===== === === ======
Quarter Ended March 31, 2015
----------------------------
GAAP %of Total Share-based Acquisition Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation expenses cost Revenue Revenue
------ ------- ------------ -------- ---- ------- -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,264,169) 86.0% 2,016 - 1,179 0.2% (1,260,974) 85.8%
Personnel costs of Franchised-and-managed hotels (44,013) 3.0% 3,817 - - 0.3% (40,196) 2.7%
Sales and marketing expenses (22,250) 1.5% 241 - - 0.0% (22,009) 1.5%
General and administrative expenses (73,916) 5.0% 18,227 - 317 1.3% (55,372) 3.8%
------- ------ --- --- -------
Total operating costs and expenses (1,404,348) 95.5% 24,301 - 1,496 1.8% (1,378,551) 93.7%
========== ====== === ===== ==========
(Loss)/income from operations (10,707) 0.7% 24,301 - 1,496 1.8% 15,090 1.0%
======= ====== === ===== ======
Quarter Ended June 30, 2014
---------------------------
GAAP %of Total Share-based Acquisition Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation expenses cost Revenue Revenue
------ ------- ------------ -------- ---- ------- -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,216,746) 71.6% 1,889 - 1,328 0.2% (1,213,529) 71.4%
Personnel costs of Franchised-and-managed hotels (57,284) 3.4% 3,156 - - 0.2% (54,128) 3.2%
Sales and marketing expenses (30,703) 1.8% 154 - - 0.0% (30,549) 1.8%
General and administrative expenses (81,968) 4.8% 17,583 691 317 1.1% (63,377) 3.7%
------- ------ --- --- -------
Total operating costs and expenses (1,388,701) 81.6% 22,782 691 1,645 1.5% (1,363,583) 80.2%
========== ====== === ===== ==========
Income from operations 211,280 12.4% 22,782 691 1,645 1.5% 236,398 13.9%
======= ====== === ===== =======
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2000 on June 30, 2015, representing the certificated exchange rate published by the Federal Reserve Board.
Homeinns Hotel Group
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended
-------------
June 30, 2014 March 31, 2015 June 30, 2015
------------- -------------- -------------
RMB '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Net income/(loss) attributable to ordinary shareholders (GAAP) 108,166 (37,571) 72,062 11,624
Foreign exchange loss/(gain), net 109 4,061 (3,914) (631)
Share-based compensation 22,782 24,301 16,596 2,677
Acquisition expenses 691 - - -
Integration cost 1,645 1,496 1,639 264
Loss on buy-back of convertible notes - 91 1,591 257
Loss on change in fair value of convertible notes 35,016 9,583 17,016 2,745
------ ----- ------ -----
Adjusted net income attributable to ordinary shareholders (Non-GAAP) 168,409 1,961 104,990 16,936
======= ===== ======= ======
Quarter Ended
-------------
June 30, 2014 March 31, 2015 June 30, 2015
------------- -------------- -------------
RMB '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Earnings per share (GAAP)
- Basic 1.14 (0.39) 0.75 0.12
==== ===== ==== ====
- Diluted 1.13 (0.39) 0.75 0.12
==== ===== ==== ====
Weighted average ordinary shares outstanding
- Basic 95,285 95,776 96,215 96,215
====== ====== ====== ======
- Diluted 95,407 95,776 96,215 96,215
====== ====== ====== ======
Adjusted earnings per share (Non-GAAP)
- Basic 1.77 0.02 1.09 0.18
==== ==== ==== ====
- Diluted 1.69 0.02 1.07 0.17
==== ==== ==== ====
Weighted average ordinary shares outstanding
- Basic 95,285 95,776 96,215 96,215
====== ====== ====== ======
- Diluted 102,862 95,776 102,917 102,917
======= ====== ======= =======
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2000 on June 30, 2015, representing the certificated exchange rate published by the Federal Reserve Board.
Note 2: The non-GAAP adjustment items do not include the tax impact.
Homeinns Hotel Group
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended
-------------
June 30, 2014 March 31, 2015 June 30, 2015
------------- -------------- -------------
RMB '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Net income/(loss) 109,813 (36,797) 72,590 11,709
Interest income (1,677) (4,339) (4,055) (654)
Interest expenses 13,064 5,667 5,456 880
Income tax expense 68,410 10,946 48,802 7,871
Depreciation and amortization 192,455 201,508 200,383 32,320
------- ------- ------- ------
EBITDA (Non-GAAP) 382,065 176,985 323,176 52,126
------- ------- ------- ------
Foreign exchange loss/(gain), net 109 4,061 (3,914) (631)
Share-based compensation 22,782 24,301 16,596 2,677
Acquisition expenses 691 - - -
Integration cost 1,645 1,496 1,639 264
Loss on buy-back of convertible notes - 91 1,591 257
Loss on change in fair value of convertible notes 35,016 9,583 17,016 2,745
------ ----- ------ -----
Adjusted EBITDA (Non-GAAP) 442,308 216,517 356,104 57,438
======= ======= ======= ======
%of total revenue 26.0% 14.7% 21.4% 21.4%
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
-------------------------------
June 30, 2014 March 31, 2015 June 30, 2015
------------- -------------- -------------
Group Group Group
Total Hotels in operation: 2,374 2,661 2,750
Leased-and-operated hotels 897 912 915
Franchised-and-managed hotels 1,477 1,749 1,835
Total rooms 275,050 300,866 309,414
Occupancy rate (as a percentage) 86.7% 79.3% 83.3%
Average daily rate (in RMB) 164 151 163
RevPAR (in RMB) 142 120 136
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
--------------------------
June 30, 2014 June 30, 2015
------------- -------------
Group Group
Total Hotels in operation: 2,103 2,103
Leased-and-operated hotels 874 874
Franchised-and-managed hotels 1,229 1,229
Total rooms 242,194 242,194
Occupancy rate (as a percentage) 88.1% 84.7%
Average daily rate (in RMB) 164 163
RevPAR (in RMB) 145 138
"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-second-quarter-2015-financial-results-300126774.html
SOURCE Homeinns
