201505121700PR_NEWS_USPR_____CN05527 20150512T170000-0400 prnewswire.com 20150512 CN05527 1 urn:newsml:prnewswire.com:20150512:CN05527:1 20150512T170000-0400 20150512T170000-0400 MimeType/@FormalName Homeinns Hotel Group Reports First Quarter 2015 Financial Results 2,661 Hotels in Operation in 338 Cities in China SHANGHAI, May 12, 2015 HOMEINNS-Earnings 201505121700PR_NEWS_USPR_____CN05527.xml Homeinns Hotel Group Reports First Quarter 2015 Financial Results

Homeinns Hotel Group Reports First Quarter 2015 Financial Results

2,661 Hotels in Operation in 338 Cities in China

PR Newswire

SHANGHAI, May 12, 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 first quarter ended March 31, 2015.

First Quarter 2015 Financial and Operational Highlights

  • Total revenues were RMB 1.47 billion (US$237.2 million) for the first quarter of 2015, a decrease of 0.1% year over year, but within the recently provided guidance range.
  • Net loss attributable to ordinary shareholders was RMB 37.6 million (US$6.1 million) for the first quarter of 2015, compared with net income of RMB 74.9 million for the first quarter of 2014. Adjusted net income attributable to ordinary shareholders (non-GAAP) was RMB 2.0 million (US$0.3 million) for the first quarter of 2015, a decrease of 93.9% year over year.
  • EBITDA (non-GAAP) decreased 40.6% year over year to RMB 177.0 million (US$28.6 million) for the first quarter of 2015. Adjusted EBITDA (non-GAAP) decreased 15.1% year over year to RMB 216.5 million (US$34.9 million) for the first quarter of 2015.
  • Net operating cash inflow decreased 94.1% year over year to RMB 9.1 million (US$1.5 million) for the first quarter of 2015.
  • As of March 31, 2015, Homeinns Hotel Group operated 2,661 hotels across 338 cities in China, including a net addition of 52 hotels during the first quarter of 2015.

"We achieved revenue in line with our previously provided guidance, which reflected our expectations for a challenging start to the year in very difficult market conditions," said Mr. David Sun, the Company's chief executive officer. "While we continued to make meaningful progress in rolling out new business initiatives, controlling costs, and driving beneficial efficiencies in our business, the first quarter was one of the most difficult periods for our business since Homeinns was established in 2002. A deepened economic slowdown, the fact that the first quarter is normally our slowest period and the later timing of Chinese New Year versus last year together put rather significant pressure on our revenue per available room, which had a negative impact on our overall profitability for the period."

Mr. Sun continued, "Looking ahead to the remainder of 2015, we are not seeing immediate signs of a market rebound at the moment but remain confident about the long-term prospects of the overall travel and lodging market in China. While the macroeconomic environment can be cyclical, and is out of our control as well as beyond what we can accurately predict at present, we continue to focus on what we can do and have done well consistently, namely refining product offerings, improving customer service, and delivering operating and cost efficiencies, all to ensure we remain as competitive and resilient as possible in the current market. On top of this, we will further develop our mid-scale hotels and continue to drive various new initiatives that are focused on meeting the evolving needs of our customers. We believe that all of this will leave us well positioned to capture opportunities when China's economy improves and deliver long-term value for our shareholders."

Hotel Development



Hotels in Operations and Pipeline


Openings

Closures



Group

Homeinn

Motel

Fairyland

Yitel

Homeinn Plus*


1Q15

1Q15

Total Number of Hotels

2,661

2,179

400

34

48



70

18


Leased-and-Operated

912

703

164

25

20



4

6


Franchised-and-Managed

1,749

1,476

236

9

28



66

12

Contracted or under Construction

209

142

36

2

17

12





Leased-and-Operated

28

6

6

1

9

6





Franchised-and-Managed

181

136

30

1

8

6




Under Due Diligence

172

150

19

0

3

0














* "Homeinn Plus" is a mid-scale brand newly launched in April 2015.


Operating Metrics


Total Hotels


Hotels Opened for
at least 18 Months


1Q2015

4Q2014

1Q2014


1Q2015

1Q2014

Occupancy Rate

79.3%

79.6%

81.3%


80.8%

83.5%

Average Daily rate (ADR, RMB)

151

163

156


151

156

Revenue per Available Room (RevPAR, RMB)

120

130

127


122

130

For the first quarter of 2015, occupancy rate decreased by 2.0 percentage points while ADR decreased by 3.2%, resulting in a year-over-year decrease of 5.5% in RevPAR. The decrease in RevPAR was mainly due to continued difficult market conditions in the first quarter of 2015. Sequentially, RevPAR decreased by 7.7%, mainly due to the fact that the first quarter is normally the slowest period in a year for the Company and the overall hotel industry.

As of March 31, 2015, a total of 1,991 hotels were in operation for at least 18 months. These hotels' occupancy rate declined year over year from 83.5% to 80.8%, and ADR decreased year over year from RMB 156 to RMB 151, resulting in a decrease in RevPAR by 6.2% from RMB 130 to RMB 122 during the first quarter of 2015.

Homeinns Hotel Group had a total of 28.1 million unique non-corporate members under its frequent guests program as of March 31, 2015.

Key Financial Results for First Quarter 2015

Revenues






(RMB/USD in Millions)

First Quarter 2015


First Quarter 2014



RMB

USD


RMB

V%


Leased-and-Operated Hotels

1,244.7

200.8


1,279.2

-2.7%


Franchised-and-Managed Hotels

225.7

36.4


193.3

16.8%

Total Revenues

1,470.5

237.2


1,472.5

-0.1%

Less: Business Taxes

-88.4

-14.3


-94.3

-6.3%

Net Revenues

1,382.1

223.0


1,378.2

0.3%







Note: "V%" represents year-over-year percentage change in amounts

Revenues from leased-and-operated hotels decreased 2.7% year over year to RMB 1.24 billion (US$200.8 million) for the first 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 16.8% year over year to RMB 225.7 million (US$36.4 million) for the first 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)

First Quarter 2015





Adjusted


GAAP Results

Non-GAAP Results*


RMB

USD

Vpts

RMB

USD

Vpts

Leased-and-Operated Hotel Costs

1,264.2

203.9

3.7pts

1,261.0

203.4

3.7pts








Personnel Costs of Franchised-and-Managed Hotels

44.0

7.1

0.4pts

40.2

6.5

0.4pts

Sales and Marketing Expenses

22.3

3.6

-0.2pts

22.0

3.6

-0.2pts

General and Administrative Expenses

73.9

11.9

0.2pts

55.4

8.9

0.2pts








Total Operating Costs and Expenses

1,404.3

226.5

4.1pts

1,378.6

222.4

4.2pts








Loss/Income from Operations

-10.7

-1.7

n/a

15.1

2.4

-3.7pts








*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 1.40 billion (US$226.5 million) for the first quarter of 2015, representing 95.5% of total revenues for the quarter. Total operating costs and expenses excluding any share-based compensation expenses and integration costs (non-GAAP) for the first quarter of 2015 were 93.7% of total revenues, compared to 89.6% in the same period a year ago.

  • Total leased-and-operated hotel costs were RMB 1.26 billion (US$203.9 million) for the first quarter of 2015, representing 101.6% of the leased-and-operated hotel revenues for the quarter, compared to 94.7% 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 101.3% of the leased-and-operated hotel revenues in the first quarter of 2015, compared to 94.4% in the same period a year ago.
    Pre-opening cost was RMB 20.9 million (US$3.4 million) for the first quarter of 2015, compared to RMB 5.9 million in the first 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 first quarter of 2015 was mainly due to the decreased RevPAR resulting 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 first quarter of 2015.
  • Personnel costs of franchised-and-managed hotels were RMB 44.0 million (US$7.1 million) for the first quarter of 2015, representing 19.5% of the franchised-and-managed hotel revenues for the first quarter of 2015, compared to 19.9% in the same period a year ago. Franchised-and-managed hotels personnel costs excluding share-based compensation expenses (non-GAAP) were 17.8% of franchised-and-managed hotel revenues in the first quarter of 2015, compared to 18.0% in the same period of 2014. The year-over-year decrease in personnel costs of franchised-and-managed hotels as a percentage of franchised-and-managed hotel revenues for the first quarter of 2015 was mainly due to lower performance-related bonuses in the quarter.
  • Sales and marketing expenses were RMB 22.3 million (US$3.6 million) for the first quarter of 2015, representing 1.5% 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 1.5% of total revenues for the first 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 first quarter of 2015 was mainly due to the timing of certain marketing activities.
  • General and administrative expenses were RMB 73.9 million (US$11.9 million) for the first 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 3.8% of total revenues for the first quarter of 2015, compared to 3.5% in the same period of 2014. The year-over-year increase in general and administrative expenses as a percentage of total revenues for the first quarter of 2015 was mainly due to higher investment in IT resources.

Loss from Operations was RMB 10.7 million (US$1.7 million) for the first quarter of 2015, compared to income from operations of RMB 42.4 million in the same period a year ago. Income from operations excluding share-based compensation expenses and integration costs (non-GAAP) for the first quarter of 2015 was RMB 15.1 million (US$2.4 million), or 1.0% of total revenues, compared to RMB 70.0 million, or 4.8% of total revenues, in the same period of 2014. The year-over-year decrease in income from operations margin rate for the quarter was mainly due to lower revenue base per hotel and higher pre-opening cost, partially offset by the increased mix of higher-margin revenue contribution from franchised-and-managed operations.

EBITDA (non-GAAP) 

(RMB/USD in Millions)

First Quarter 2015


First Quarter 2014



RMB


USD


%Rev


V%


RMB


USD


%Rev

EBITDA (Non-GAAP)

177.0


28.6


12.0%


-40.6%


297.9


48.1


20.2%


Net Foreign Exchange Loss

4.1


0.7


0.3%




15.2


2.4


1.0%


Share-Based Compensation Expenses

24.3


3.9


1.7%




25.5


4.1


1.7%


Integration Cost

1.5


0.2


0.1%




2.1


0.3


0.1%


Loss on buy-back of convertible notes

0.1


0.0


0.0%




-


-


-


Loss / (Gain) on Fair Value Change in Convertible Notes

9.6


1.5


0.7%




-85.5


-13.8


-5.8%

Adjusted EBITDA (Non-GAAP)

216.5


34.9


14.7%


-15.1%


255.2


41.2


17.3%
















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)

First Quarter 2015


First Quarter 2014



RMB


USD


%Rev


V%


RMB


USD


%Rev

Net Loss / Income (GAAP)

-37.6


-6.1


-2.6%


-


74.9


12.1


5.1%


Net Foreign Exchange Loss 

4.1


0.7


0.3%




15.2


2.4


1.0%


Share-Based Compensation Expenses

24.3


3.9


1.7%




25.5


4.1


1.7%


Integration Cost

1.5


0.2


0.1%




2.1


0.3


0.1%


Loss on buy-back of convertible notes

0.1


0.0


0.0%




-


-


-


Loss / (Gain) on Fair Value Change in Convertible Notes

9.6


1.5


0.7%




-85.5


-13.8


-5.8%

Adjusted Net Income (Non-GAAP)

2.0


0.3


0.1%


-93.9%


32.1


5.2


2.2%
















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 93.9% to RMB 2.0 million (US$0.3 million) for the first quarter of 2015, representing 0.1% of total revenues, compared to 2.2% in the same period a year ago. The year-over-year decrease in adjusted net margin rate (non-GAAP)[1] was mainly due to a decrease in adjusted income from operations margin rate (non-GAAP)[2], partially offset by higher interest income and lower interest expense.

Basic and Diluted Earnings Per Share / Earnings Per ADS


First Quarter 2015


Ordinary Share

ADS Share


RMB

USD

RMB

USD

Basic

-0.39

-0.06

-0.78

-0.13

Diluted

-0.39

-0.06

-0.78

-0.13

Adjusted Basic (Non-GAAP)

0.02

0.00

0.04

0.01

Adjusted Diluted (Non-GAAP)

0.02

0.00

0.04

0.01

Cash Flow

Net operating cash inflow for the first quarter of 2015 was RMB 9.1 million (US$1.5 million), compared to RMB 154.9 million in the same period of 2014. Capitalized expenditures for the first quarter of 2015 were RMB 120.9 million (US$19.5 million), while related cash paid for capital expenditures during the quarter was RMB 213.8 million (US$34.5 million).

Balance Sheet

As of March 31, 2015, Homeinns Hotel Group had cash and cash equivalents of RMB 747.5 million (US$120.6 million). The outstanding balance of convertible notes due December 2015 (measured at fair value) was RMB 1.03 billion (US$166.5 million).

Outlook for Second Quarter 2015

Homeinns Hotel Group expects total revenues for the Company in the second quarter of 2015 to be in the range of RMB 1,670 million to RMB 1,700 million.

This forecast reflects the Company's current and preliminary views and is 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 6.1990 to US$1.00, the noon buying rate for March 31, 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, May 12, 2015 (9 AM Beijing/Hong Kong Time on Wednesday, May 13, 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 May 19, 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:

9818857

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:

  1. total operating costs and expenses excluding share-based compensation expenses and acquisition and integration costs
  2. total leased-and-operated hotel costs excluding share-based compensation expenses and integration costs
  3. personnel costs of franchised-and-managed hotels excluding share-based compensation expenses
  4. sales and marketing expenses excluding share-based compensation expenses
  5. general and administrative expenses excluding share-based compensation expenses and acquisition and integration costs
  6. income from operations excluding share-based compensation expenses and acquisition and integration costs
  7. 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
  8. 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
  9. 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.

For investor and media inquiries, please contact:

Ethan Ruan
Homeinns Hotel Group
Tel: +86-21-3337-3333*3872
Email: zjruan@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 and integration costs (non-GAAP) as a percentage of total revenues.

 

 

Homeinns Hotel Group

Unaudited Condensed Consolidated Balance Sheet










December 31, 2014


March 31, 2015



RMB '000


RMB '000


US$ '000








ASSETS







Current assets:







Cash and cash equivalents


949,690


747,479


120,581

Restricted cash


12,726


12,488


2,015

Accounts receivable, net


95,501


122,822


19,813

Receivables from related parties


3,476


4,946


798

Consumables


44,446


33,405


5,389

Prepayments and other current assets


171,703


155,825


25,137

Deferred tax assets


129,685


131,784


21,259








Total current assets


1,407,227


1,208,749


194,992





























Investment


11,709


13,109


2,115

Property and equipment, net


4,000,041


3,903,069


629,629

Goodwill


2,323,241


2,323,241


374,777

Intangible assets, net


1,126,636


1,114,493


179,786

Other assets


90,995


101,990


16,453

Non-current deferred tax assets


434,847


468,932


75,646








Total assets


9,394,696


9,133,583


1,473,398








LIABILITIES







Current liabilities:







Accounts payable


86,949


57,918


9,343

Payables to related parties


4,166


4,733


764

Financial liability, current portion[2]


1,029,577


1,032,393


166,542

Salaries and welfare payable


228,127


113,751


18,350

Income tax payable


117,830


82,489


13,307

Other taxes payable


34,074


46,000


7,421

Deferred revenues


225,417


229,125


36,962

Other unpaid and accruals


255,460


267,560


43,162

Other payables


742,853


640,184


103,273

Deferred tax liability


60,764


60,764


9,802















Total current liabilities


2,785,217


2,534,917


408,926








Deferred rental


705,284


716,194


115,534

Deferred revenues


51,289


50,046


8,073

Deposits due to franchisees


144,892


147,572


23,806

Other long term payables


13,018


13,244


2,136

Unfavorable lease liabilities


331,282


322,197


51,976

Deferred tax liabilities


292,575


293,934


47,416








Total liabilities


4,323,557


4,078,104


657,867















Commitments and contingencies














Shareholders' equity







Ordinary shares (US$0.005 par value; 200,000,000 shares authorized, 95,703,960 and 96,052,580 shares issued and outstanding as of December 31, 2014 and March 31 2015, respectively)


3,698


3,710


598








Additional paid-in capital


3,191,076


3,214,521


518,555

Statutory reserves


256,013


256,013


41,299








Retained earnings


1,604,246


1,566,675


252,730








Less: Treasury stock (0 and 31,694 shares as of December 31, 2014
and March 31 2015, respectively)


-


(2,320)


(374)








Total Home Inns shareholders' equity


5,055,033


5,038,599


812,808








Noncontrolling interests


16,106


16,880


2,723








Total shareholders' equity


5,071,139


5,055,479


815,531








Total liabilities and shareholders' equity


9,394,696


9,133,583


1,473,398



-


-


-








Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.1990

on March 31, 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



March 31, 2014


December 31, 2014


March 31, 2015



RMB '000


RMB '000


RMB '000


US$ '000



















Revenues:








 Leased-and-operated hotels 


1,279,204


1,391,084


1,244,734


200,796

 Franchised-and-managed hotels 


193,254


244,219


225,733


36,414









 Total revenues 


1,472,458


1,635,303


1,470,467


237,210

 Less: Business tax and related surcharges 


(94,264)


(100,323)


(88,351)


(14,252)









 Net revenues 


1,378,194


1,534,980


1,382,116


222,958









 Operating costs and expenses: 








    Leased-and-operated hotel costs – 








       Rents and utilities 


(559,579)


(564,347)


(583,473)


(94,124)

       Personnel costs 


(270,666)


(256,033)


(276,076)


(44,536)

       Depreciation and amortization 


(180,145)


(187,816)


(195,595)


(31,553)

       Consumables, food and beverage 


(70,338)


(97,864)


(78,239)


(12,621)

       Others 


(130,978)


(192,474)


(130,786)


(21,098)









    Total leased-and-operated hotel costs 


(1,211,706)


(1,298,534)


(1,264,169)


(203,932)









    Personnel costs of Franchised-and-managed hotels 


(38,549)


(34,280)


(44,013)


(7,100)

    Sales and marketing expenses 


(25,035)


(22,700)


(22,250)


(3,589)

    General and administrative expenses 


(71,157)


(77,426)


(73,916)


(11,924)









 Total operating costs and expenses 


(1,346,447)


(1,432,940)


(1,404,348)


(226,545)









 Other income 


10,639


448


11,525


1,859










 Income/(loss) from operations 


42,386


102,488


(10,707)


(1,728)









 Interest income 


977


3,777


4,339


700

 Interest expenses 


(11,981)


(5,674)


(5,667)


(914)

 Loss from equity investment 


(310)


(193)


(98)


(16)

 Gain/(loss) on change in fair value of convertible notes 


85,508


(7,851)


(9,583)


(1,546)

Loss on buy-back of convertible notes


-

-

(91)


(15)

 Non-operating income 


-

41,400


17


3

 Foreign exchange (loss)/gain, net 


(15,156)


4,606


(4,061)


(655)









 Income/(loss) before income tax expenses and noncontrolling interests 


101,424


138,553


(25,851)


(4,171)










 Income tax expense 


(25,465)


(53,064)


(10,946)


(1,766)









 Net income/(loss) 


75,959


85,489


(36,797)


(5,937)









 Less:Net income attributable to noncontrolling interests 


(1,094)


(918)


(774)


(125)


















 Net income/(loss) attributable to ordinary shareholders 


74,865


84,571


(37,571)


(6,062)










Earnings per share








— Basic


0.79


0.88


(0.39)


(0.06)









— Diluted


0.05


0.88


(0.39)


(0.06)









Weighted average ordinary shares outstanding








— Basic


94,873


95,655


95,776


95,776









— Diluted


102,647


95,655


95,776


95,776









Share-based compensation expense was included in the statement of operations as follows:








Leased-and-operated hotel costs – Personnel costs


2,432


1,856


2,016


325

Personnel costs of Franchised-and-managed hotels


3,838


3,479


3,817


616

Sales and marketing expenses


253


179


241


39

General and administrative expenses


18,964


15,810


18,227


2,940










Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.1990 on March 31, 2015, representing the certificated exchange rate published by the Federal Reserve Board.

 

Homeinns Hotel Group

Reconciliation of GAAP and Non-GAAP Results
















Quarter Ended March 31, 2015


GAAP


%of Total


Share-based


Integration


%of Total


Non-GAAP


%of Total


Result


Revenue


Compensation


cost


Revenue


Result


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 March 31, 2015


GAAP


%of Total


Share-based


Integration


%of Total


Non-GAAP


%of Total


Result


Revenue


Compensation


cost


Revenue


Result


Revenue


US$ '000




US$ '000


US$ '000




US$ '000




(unaudited)




(unaudited)


(unaudited)




(unaudited)

















Leased-and-operated hotel costs

(203,932)


86.0%


325


190


0.2%


(203,417)


85.8%

Personnel costs of Franchised-and-managed hotels

(7,100)


3.0%


616


-


0.3%


(6,484)


2.7%

Sales and marketing expenses

(3,589)


1.5%


39


-


0.0%


(3,550)


1.5%

General and administrative expenses

(11,924)


5.0%


2,940


51


1.3%


(8,933)


3.8%















Total operating costs and expenses

(226,545)


95.5%


3,920


241


1.8%


(222,384)


93.7%















(Loss)/income from operations

(1,728)


0.7%


3,920


241


1.8%


2,433


1.0%
















Quarter Ended December 31, 2014


GAAP


%of Total


Share-based


Integration


%of Total


Non-GAAP


%of Total


Result


Revenue


Compensation


cost


Revenue


Result


Revenue


RMB '000




RMB '000


RMB '000




RMB '000




(unaudited)




(unaudited)


(unaudited)




(unaudited)

















Leased-and-operated hotel costs

(1,298,534)


79.4%


1,856


1,478


0.2%


(1,295,200)


79.2%

Personnel costs of Franchised-and-managed hotels

(34,280)


2.1%


3,479


-


0.2%


(30,801)


1.9%

Sales and marketing expenses

(22,700)


1.4%


179


-


0.0%


(22,521)


1.4%

General and administrative expenses

(77,426)


4.7%


15,810


317


1.0%


(61,299)


3.7%















Total operating costs and expenses

(1,432,940)


87.6%


21,324


1,795


1.4%


(1,409,821)


86.2%















Income from operations

102,488


6.3%


21,324


1,795


1.4%


125,607


7.7%
















Quarter Ended March 31, 2014


GAAP


%of Total


Share-based


Integration


%of Total


Non-GAAP


%of Total


Result


Revenue


Compensation


cost


Revenue


Result


Revenue


RMB '000




RMB '000


RMB '000




RMB '000




(unaudited)




(unaudited)


(unaudited)




(unaudited)

















Leased-and-operated hotel costs

(1,211,706)


82.3%


2,432


1,784


0.3%


(1,207,490)


82.0%

Personnel costs of Franchised-and-managed hotels

(38,549)


2.6%


3,838


-


0.3%


(34,711)


2.4%

Sales and marketing expenses

(25,035)


1.7%


253


-


0.0%


(24,782)


1.7%

General and administrative expenses

(71,157)


4.8%


18,964


317


1.3%


(51,876)


3.5%















Total operating costs and expenses

(1,346,447)


91.4%


25,487


2,101


1.9%


(1,318,859)


89.6%















Income from operations

42,386


2.9%


25,487


2,101


1.9%


69,974


4.8%















Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.1990 on March 31, 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








March 31,
2014


December 31,
2014


March 31,
2015








RMB '000


RMB '000


RMB '000


US$ '000








(unaudited)


(unaudited)


(unaudited)


(unaudited)



































Net income/(loss) attributable to ordinary shareholders (GAAP)

74,865


84,571


(37,571)


(6,062)







Foreign exchange loss/(gain), net

15,156


(4,606)


4,061


655







Share-based compensation

25,487


21,324


24,301


3,920







Integration cost

2,101


1,795


1,496


241







Loss on buy-back of convertible notes

-


-


91


15







(Gain)/loss on change in fair value of convertible notes

(85,508)


7,851


9,583


1,546





















Adjusted net income attributable to ordinary shareholders (Non-GAAP)

32,101


110,935


1,961


315


















































Quarter Ended








March 31,
2014


December 31,
2014


March 31,
2015








RMB '000


RMB '000


RMB '000


US$ '000








(unaudited)


(unaudited)


(unaudited)


(unaudited)





















Earnings per share (GAAP)














— Basic

0.79


0.88


(0.39)


(0.06)





















— Diluted

0.05


0.88


(0.39)


(0.06)





















Weighted average ordinary shares outstanding














— Basic

94,873


95,655


95,776


95,776





















— Diluted

102,647


95,655


95,776


95,776







Adjusted earnings per share (Non-GAAP)














— Basic

0.34


1.16


0.02


0.00





















— Diluted

0.34


1.13


0.02


0.00





















Weighted average ordinary shares outstanding














— Basic

94,873


95,655


95,776


95,776





















— Diluted

95,193


102,704


95,776


95,776





















Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.1990 on March 31, 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








March 31,
2014


December 31,
2014


March 31,
2015








RMB '000


RMB '000


RMB '000


US$ '000








(unaudited)


(unaudited)


(unaudited)


(unaudited)



































Net income/(loss)

75,959


85,489


(36,797)


(5,937)







    Interest income

(977)


(3,777)


(4,339)


(700)







    Interest expenses

11,981


5,674


5,667


914







    Income tax expense

25,465


53,064


10,946


1,766







    Depreciation and amortization

185,507


193,863


201,508


32,507





















EBITDA (Non-GAAP)

297,935


334,313


176,985


28,550





















    Foreign exchange loss/(gain), net

15,156


(4,606)


4,061


655







    Share-based compensation

25,487


21,324


24,301


3,920







    Integration cost

2,101


1,795


1,496


241







    Loss on buy-back of convertible notes

-


-


91


15







    (Gain)/loss on change in fair value of convertible notes

(85,508)


7,851


9,583


1,546





















Adjusted EBITDA (Non-GAAP) 

255,171


360,677


216,517


34,927





















%of total revenue

17.3%


22.1%


14.7%


14.7%





















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




March 31, 2014


December 31, 2014


March 31, 2015




Group


Group


Group


Total Hotels in operation:


2,241


2,609


2,661


    Leased-and-operated hotels


876


914


912


    Franchised-and-managed hotels


1,365


1,695


1,749










Total rooms


262,321


296,075


300,866










Occupancy rate (as a percentage)


81.3%


79.6%


79.3%










Average daily rate (in RMB)


156


163


151










RevPAR (in RMB)


127


130


120










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






March 31, 2014


March 31, 2015






Group


Group




Total Hotels in operation:


1,991


1,991




    Leased-and-operated hotels


859


859




    Franchised-and-managed hotels


1,132


1,132












Total rooms


231,791


231,041












Occupancy rate (as a percentage)


83.5%


80.8%












Average daily rate (in RMB)


156


151












RevPAR (in RMB)


130


122












"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.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/homeinns-hotel-group-reports-first-quarter-2015-financial-results-300082193.html

SOURCE Homeinns