GUANGZHOU, China,
Aug. 9,
2012 /PRNewswire-Asia-FirstCall/ -- 7
Days Group Holdings Limited ("7 Days Group" or the "Company")
(NYSE: SVN), a leading and fast growing national economy hotel
chain based in China, today
announced its unaudited financial results for the
second quarter
2012.
Second Quarter
2012 Financial
Highlights
- Total net revenues for the second quarter 2012 increased
by 27.3% year-over-year to
RMB632.7 million
(US$99.6
million)[2].
- Income from operations for the second quarter 2012 was
RMB76.2 million
(US$12.0
million), a 36.3% year-over-year increase
compared to RMB55.9 million in the
second quarter 2011. Non-GAAP income from operations for the
quarter was RMB82.1 million
(US$12.9 million),
compared to RMB67.0 million for the
same period in
2011.
- EBITDA for the second quarter 2012 was RMB158.9 million (US$25.0
million), an increase of 35.6% year-over-year from
RMB117.2 million for the same period
in 2011. Adjusted EBITDA for the quarter was
RMB164.8 million (US$25.9 million), an increase of 28.4%
year-over-year. EBITDA margin was 25.1% compared to 23.6% in the
same period in 2011. Adjusted EBITDA margin was 26.0%, compared to
25.8% in the prior year period.
- Net income attributable to the
Company's ordinary shareholders
was RMB55.6 million
(US$8.7 million), a 23.3%
year-over-year increase compared to
RMB45.1 million for the same
period in 2011.
Non-GAAP net income attributable to the Company's ordinary
shareholders was RMB61.4 million
(US$9.7 million), representing a
year-over-year increase of 9.5%.
- Basic and diluted earnings per
ADS[3]
were RMB1.11
(US$0.18)
and RMB1.11 (US$0.17), respectively.
Non-GAAP basic and diluted earnings
per ADS were
RMB1.23
(US$0.19)
and RMB1.22 (US$0.19), respectively.
- Net operating cash inflow was
RMB189.5 million
(US$29.8 million), compared
to RMB132.8 million in the
same period in
2011.
Second Quarter
2012 Operational
Highlights
- Added 88 net hotels, comprising
18 net leased-and-operated hotels and 70
net managed hotels in the second quarter 2012.
- As of June
30, 2012,
7 Days Group had 1,132 hotels in
operation, consisting of 435
leased-and-operated hotels and 697
managed hotels, representing a total of
112,631
rooms covering 168
cities.
- As of June
30, 2012, there
were a total of 226 hotels
in the pipeline, including 50
leased-and-operated hotels under conversion and
176 managed hotels contracted but not yet
opened.
- For the second quarter 2012,
occupancy rates for leased-and-operated hotels, managed hotels and
all hotels were 86.8%, 83.0% and 84.6%, respectively, compared to
91.1%, 83.8% and 87.5%, respectively, in the
second quarter 2011. The year-over-year decrease
in occupancy rates was mainly due to the higher number of new
hotels in operation compared to the prior
year period.
RevPAR[4]
for leased-and-operated hotels was
RMB145.1 in the
second quarter 2012, compared to
RMB152.4 in the same period in
2011. RevPAR for managed
hotels for the period was
RMB130.9 in the
second quarter 2012,
compared to RMB129.7 for the
same period in
2011.
- As of June 30, 2012, the
number of 7 Days Club members was over 43.8
million, a 91.3% increase from 22.9
million as of June 30,
2011.
Recent Business
Developments:
Mr. Yuezhou
Lin, 7 Days Group's Chief Executive Officer and
Director, commented, "As announced during the second quarter 2012,
we have begun to implement the strategy to increase emphasis
towards our managed hotel portfolio to maximize our growth
opportunities in China's expanding
economy hotel industry. By adopting a more asset-light growth
strategy, we are leveraging our leading hotel operating platform,
best-in-class proprietary e-Commerce system and industry leading
loyalty program to take advantage of the lower risk, less capital
intensive and more profitable nature of the managed hotel business
model. We believe that this approach will allow us to deliver
increasing profitability and stronger free cash flow over time.
With a robust pipeline of managed hotels contracted but not yet
opened, and continuing strong demand from prospective managed hotel
partners, we remain confident in our ability to deliver sustainable
earnings growth in the coming quarters and
beyond."
Second Quarter
2012 Unaudited Financial
Results
Gross revenues. Gross revenues
for the second quarter of
2012 were RMB671.1
million (US$105.6 million),
representing a year-over-year increase of
27.1% from RMB528.1
million in the second quarter
2011.
Gross revenues from leased-and-operated
hotels. Gross revenues from
leased-and-operated hotels for the second
quarter 2012 amounted to
RMB595.6 million
(US$93.7 million), representing a
24.5% increase
from RMB478.2 million in
the second quarter
2011.
Gross revenues from managed hotels.
Gross revenues from managed hotels for the
second quarter of 2012
increased by
51.4% to
RMB75.5 million
(US$11.9 million) from
RMB49.9 million in the same period in
2011, and increased
by 29.8% from RMB58.2 million in the first quarter
2012. During the
second quarter
2012, 70 net
managed hotels were opened.
Total net revenues.
Total net revenues for the second
quarter of 2012 totaled
RMB632.7 million
(US$99.6 million), representing a
year-over-year increase of 27.3% from
RMB497.1 million in
second quarter 2011,
primarily resulting from the continued growth in the number of
hotels in operation.
Hotel operating costs. Hotel
operating costs for the second quarter of
2012 were RMB489.3
million (US$77.0 million),
or 77.3% of total net
revenues, compared with
77.0% of total net revenues in the
second quarter 2011
and 85.6% of total net revenues in
the first quarter
2012.
Pre-opening expenses for the
second quarter 2012 were RMB15.1 million
(US$2.4 million), compared to
RMB15.4 million in the
first quarter of
2012.
Sales and marketing
expenses. Sales and marketing
expenses for the second quarter of
2012 were RMB18.9
million (US$3.0 million), or
3.0% of total net revenues, compared with
1.8% of total net revenues in the
same period of 2011 and 2.3%
in the first quarter 2012. The increase
in sales and marketing expenses resulted from expanded promotional
activities in the second quarter of 2012.
General and administrative expenses.
General and administrative expenses for
the second quarter
2012 were RMB48.3
million (US$7.6 million),
or 7.6% of total net revenues,
compared to RMB49.3
million, or 9.9% of total net
revenues in the same period of
2011, and
RMB42.8 million, or
7.9% of total net revenues in the
first quarter of
2012. The decrease in
general and administrative expenses was primarily a result of
improved operating efficiency as well as the benefits of economies
of scale.
Accordingly, total operating costs and expenses amounted
to RMB556.5 million
(US$87.6 million), representing
88.0% of total net revenues, compared
to 88.7% of total net
revenues in the same period
of 2011
and 95.7% in the
first quarter 2012.
Income from operations.
Income from operations for the
second quarter 2012 was
RMB76.2 million
(US$12.0 million), compared
to RMB55.9 million in
the second quarter
2011 and
RMB23.3 million in the
first quarter
2012. Non-GAAP income from
operations was RMB82.1 million
(US$12.9 million), compared to
RMB67.0 million for the same period of
2011 and RMB32.2
million in the first quarter
2012.
EBITDA. EBITDA for the
second quarter 2012
was RMB158.9 million
(US$25.0 million), an increase of
35.6% year-over-year from
RMB117.2 million for the same period in
2011. Adjusted
EBITDA for the quarter was RMB164.8 million
(US$25.9 million) an increase of
28.4% year-over-year. EBITDA margin was
25.1% compared to
23.6% in the same period in
2011. Adjusted EBITDA margin was
26.0% compared to 25.8% in the
prior year period.
Interest expense. Interest
expense for the second
quarter 2012 was
RMB7.0 million,
(US$1.1
million) compared to RMB0.4 million for the same period of 2011 and
RMB6.4 million in
the first quarter
2012.
Income tax expense. Income tax
expense for the second quarter
2012 was RMB21.3
million (US$3.4 million),
compared to RMB15.6 million in
the same period of
2011 and RMB7.3
million in the first quarter
2012.
Net income attributable
to 7 Days Group Holdings Limited
ordinary
shareholders. Net
income attributable to 7 Days Group Holdings Limited
ordinary shareholders was
RMB55.6 million
(US$8.7 million) in
the second quarter
2012, compared to
RMB45.1 million in the
second quarter
2011 and
RMB19.0 million in the
first quarter
2012.
Non-GAAP net income.
Non-GAAP net income was
RMB61.4 million
(US$9.7 million), compared to Non-GAAP
net income of RMB56.1 million for
the second quarter
2011 and Non-GAAP net income of
RMB27.8 million in the
first quarter
2012.
Basic and diluted
earnings per
ADS. Basic and diluted earnings per ADS were
RMB1.11 (US$0.18)
and RMB1.11 (US$0.17), respectively, for
the second quarter
2012, compared to basic and
diluted earnings per ADS of
RMB0.90 and RMB0.89,
respectively, in the second
quarter 2011 and basic and diluted
earnings per ADS of RMB0.38 in the
first quarter 2012.
Non-GAAP basic and diluted earnings per ADS were
RMB1.23 (US$0.19)
and RMB1.22 (US$0.19), respectively, for
the second quarter
2012, compared to non-GAAP basic and
diluted earnings per ADS of RMB1.12 and RMB1.11, respectively, in the same
period of 2011and basic and diluted
earnings per ADS of RMB0.56 and RMB0.55, respectively, in the
first quarter
2012.
Cash and pledged bank deposits.
As of June
30, 2012,
the Company had cash and pledged bank deposits of
RMB615.6 million
(US$96.9 million),
representing a year-over-year increase of
88.7% from RMB326.3 million as of June 30, 2011.
Operating cash flow. Net
operating cash inflow for the second
quarter 2012 was
RMB189.5 million (US$29.8
million), representing an increase
of 42.7% from RMB132.8 million in the
second quarter
2011.
Guidance
The Company expects to generate total net revenues in the
range of RMB670 million to
RMB685 million in
the third quarter 2012.
These forecasts reflect the Company's current and preliminary view,
which is subject to change.
Conference Call
7 Days Group Holdings Limited senior management will host
a conference call at 10:00 pm (Eastern)
/ 7:00 pm (Pacific)
Thursday, August 9,
2012, which is
10:00 am (Beijing) on
Friday, August 10, 2012
to discuss its second
quarter 2012 financial results and
recent business activity. The conference call may be accessed by
calling the following numbers:
China:
|
800 8190 121
|
Hong Kong Toll
Free:
|
800 930 346
|
Hong Kong:
|
852 2475 0994
|
US Toll Free:
|
1 866 5194004
|
US New York:
|
1 718 354
1231
|
International:
|
65 6723 9381
|
Passcode:
|
7Days
|
A live webcast of the conference call and replay will be
available on the investor relations page of 7 Days Group's website
at http://en.7daysinn.cn/.
A telephone replay will be available shortly after the
call. The dial-in details are as
follows:
US:
|
1 866 214
5335
|
International:
|
61 2 8235
5000
|
Conference ID
number:
|
11963228
|
About 7 Days Group Holdings Limited
7 Days Group is a leading and fast growing national
economy hotel chain based in China. It converts and operates limited
service economy hotels across major metropolitan areas in
China under its award-winning "7
Days Inn" brand. The Company strives to offer consistent and
high-quality accommodations and services primarily to the growing
population of value conscious business and leisure travelers who
demand affordable, clean, comfortable, convenient and safe lodging,
and to respond to its guests' needs.
Use of Non-GAAP Financial
Measures
To supplement 7 Days Group's unaudited financial results
presented in accordance with U.S. GAAP, the Company has used the
following non-GAAP measures defined as non-GAAP financial measures
by the Securities and Exchange Commission (the "SEC") to report its
financial results:
- Non-GAAP income from operations represents income from
operations reported in accordance with GAAP, excluding
share-based compensation expense.
- Non-GAAP net income represents net income reported in
accordance with GAAP, excluding share-based compensation
expense.
- Non-GAAP earnings per ADS represents non-GAAP net income
divided by the number of ADS used in computing basic and diluted
earnings per ADS.
- EBITDA represents net income reported in accordance with
GAAP, adjusted for the effects of interest income and expense,
provision for income tax, depreciation and
amortization.
- Adjusted EBITDA represents EBITDA, excluding share-based
compensation expense.
The Company believes EBITDA is a useful financial metric
to assess its operating and financial performance before the impact
of investing and financing transactions, if any, and income taxes.
In addition, 7 Days Group believes that EBITDA is widely used by
other companies in the lodging industry and may be used by
investors as a measure of its financial performance. Given the
significant investments that 7 Days Group has made in the past in
property and equipment, depreciation and amortization expense
comprises a meaningful portion of its cost structure. 7 Days Group
believes that EBITDA will provide investors with a
useful tool for comparability between periods because it eliminates
depreciation and amortization expense attributable to capital
expenditures. The presentation of EBITDA should not be construed as
an indication that the Company's future results will be unaffected
by other charges and gains the Company considers to be outside the
ordinary course of its business. 7 Days Group also calculates
Adjusted EBITDA excluding share-based compensation expense. The
Company prepares its financial statements in accordance with GAAP
and, accordingly, expenses its employee share options. Since
share-based compensation expenses are
non-cash expenses, the Company believes excluding them from its
calculation of EBITDA allows it to provide investors with a more
useful tool for assessing its operating and financial
performance.
The use of EBITDA and Adjusted EBITDA has certain
limitations. Depreciation and amortization expense for various
long-term assets, such as property and equipment, income tax
expense, interest expense and interest income have been and will be
incurred and are not reflected in the presentation of EBITDA. Each
of these items should also be considered in the overall evaluation
of its results. Additionally, EBITDA does not consider capital
expenditures and other investing activities and should not be
considered as a measure of the Company's liquidity. The Company
compensates for these limitations by providing the relevant
disclosure of its depreciation and amortization, interest expense
and interest income, income tax expense, capital expenditures,
share-based compensation expense and other relevant items both in
its reconciliations to the GAAP financial measures and in its
consolidated financial statements, all of which should be
considered when evaluating the Company's performance. The terms
EBITDA and Adjusted EBITDA are not defined under GAAP, and EBITDA
and Adjusted EBITDA are not measures of net income, operating
income, operating performance or liquidity presented in accordance
with GAAP. When assessing the Company's operating and financial
performance, investors should not consider this data in isolation
or as a substitute for the Company's net income, operating income
or any other operating performance measure that is calculated in
accordance with GAAP. In addition, the Company's EBITDA and
Adjusted EBITDA may not be comparable to EBITDA or Adjusted EBITDA
or similarly titled measures utilized by other companies since such
other companies may not calculate EBITDA and Adjusted EBITDA in the
same manner as the Company does.
For reasons same to the use of EBITDA and Adjusted EBITDA
described above, the Company has also reported net income, basic
and diluted earnings per ADS and income (loss) from operations on a
non-GAAP basis, excluding share-based compensation
expenses in the relevant
period. These non-GAAP
operating measures are useful for understanding
and assessing the Company's underlying business
performance and operating trends and the Company expects to report
net income, basic and diluted earnings per ADS and income from
operations on a non-GAAP basis using a consistent method on a
quarterly basis going forward.
7 Days Group believes that both management and investors
benefit from referring to these non-GAAP financial measures in
assessing 7 Days Group's financial performance and liquidity and
when planning and forecasting future periods. Readers are cautioned
not to view non-GAAP results on a stand-alone basis or as a
substitute for results under GAAP, or as being comparable to
results reported or forecasted by other companies, and should refer
to the reconciliation of GAAP results with non-GAAP results for the
periods set forth in the tables at the end of this
release.
Safe Harbor Statement
This press release contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements can be identified by
terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements
and including, among other things, 7 Days Group's revenue guidance
for the third quarter
2012 and business forecast for 2012,
including the Company's hotel expansion plan, an
increased focus on its portfolio of asset-light, profit-oriented
managed hotels, its ability to offer consistent and
high-quality accommodations and services at an affordable
price, its ability to leverage the
economies of scale and its ability to achieve strict cost
controls and to deliver continued growth. These
forward-looking statements are not historical facts but instead
represent only the Company's belief regarding future events, many
of which, by their nature, are inherently uncertain and outside of
the Company's control. The Company's actual results and financial
condition and other circumstances may differ, possibly materially,
from the anticipated results and financial condition indicated in
these forward-looking statements. In particular, the Company's
operating results for any period are impacted significantly by the
mix of leased-and-operated hotels and managed hotels in its chain,
causing the Company's operating results to fluctuate and making
them difficult to predict.
Other factors that could cause forward-looking statements
to differ materially from actual future events or results include
risks and uncertainties related to: uncertainties associated with
factors typically affecting the lodging industry, including changes
in economic conditions, adverse weather conditions, natural
disasters or outbreaks of serious contagious diseases in markets
where the Company has a presence; uncertainties regarding the
Company's ability to respond to competitive pressures;
uncertainties regarding the Company's ability to manage its
expected growth; uncertainties regarding the Company's ability to
continue its growth and achieve profitability; risks
associated with the Company's limited operating history and
historical operating losses; uncertainties regarding
the Company's ability to fund its working capital needs;
uncertainties regarding its ability to successfully and timely
identify, secure or operate additional hotel properties.
The financial information contained in this release should be
read in conjunction with the consolidated financial statements and
notes thereto included in the Company's
2011 Annual Report on Form
20-F filed with the SEC on April 26,
2012, which is available on
the SEC's website at www.sec.gov. For a discussion of other
important factors that could adversely affect the Company's
business, financial condition, results of operations and prospects,
see "Risk Factors" beginning on page 8 of
the Company's 2011 Annual
Report on Form 20-F. The Company's results of operations for
the second quarter
2012 are not necessarily indicative
of its operating results for any future periods. Any projections in
this release are based on limited information currently available
to the Company, which is subject to change. Although such
projections and the factors influencing them will likely
be changed, the
Company will not necessarily update the information. Such
information speaks only as of the date of this release.
Statement Regarding Unaudited Financial
Information
The financial information set forth above is unaudited and
subject to adjustments. Adjustments to the financial statements may
be identified when the annual financial
statements are prepared and audit work is performed for the year
end audit, which could result in significant
differences from this unaudited financial information.
Contacts:
Investor Contact:
Vivian Chen, Investor
Relations Director
7 Days Group Holdings Limited
+86-20-8922-5858
IR@7daysinn.cn
Investor Relations (HK):
Mahmoud Siddig, Managing
Director
Taylor Rafferty
Tel: +852 3196-3712
7DaysInn@taylor-rafferty.com
Investor Relations (US):
Marc Raybin, Director
Taylor Rafferty
+1 (212) 889-4350
7DaysInn@taylor-rafferty.com
[1] Definition of Total
transaction value: total room revenue from
leased-and-operated hotels and
managed hotels. The metric is highlighted as an
indicator of the scale and reach of 7
Days' brands.
[2] The Company's reporting
currency is Renminbi ("RMB"). The translation of amounts from RMB
to United States Dollars is solely for the convenience of the
reader. RMB amounts included in this press release have been
translated into U.S. dollars at the exchange rate of
June 30,
2012 as set forth in the H.10 statistical
release of the Federal Reserve Board, which was US$1.00 = RMB6.3530. No
representation is made that RMB amounts could have been, or could
be, converted into U.S. Dollars at that rate or at any other rate
on June 30,
2012.
[3]
Each ADS represents 3 of the Company's ordinary
shares.
[4]
RevPAR represents revenue per available room.
-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --
7 Days Group Holdings Limited
|
Unaudited Consolidated Balance Sheet
Information
|
|
|
Quarter Ended
|
|
30/Jun/11
|
|
31/Mar/12
|
|
30/Jun/12
|
|
RMB' 000
|
|
RMB' 000
|
|
RMB' 000
|
US$'000
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash
|
320,133
|
|
466,556
|
|
614,588
|
96,740
|
Pledged bank deposits
|
6,167
|
|
3,054
|
|
989
|
156
|
Short-term investment
|
-
|
|
60,000
|
|
-
|
-
|
Accounts receivable
|
5,194
|
|
6,758
|
|
9,983
|
1,571
|
Prepaid rent
|
158,604
|
|
158,746
|
|
138,537
|
21,807
|
Other prepaid expenses and current
assets
|
54,266
|
|
56,059
|
|
57,017
|
8,975
|
Hotel supplies
|
39,761
|
|
46,826
|
|
46,141
|
7,263
|
Amounts due from related parties
|
-
|
|
71
|
|
71
|
11
|
Deferred tax assets
|
21,795
|
|
19,978
|
|
22,177
|
3,491
|
Total current assets
|
605,920
|
|
818,048
|
|
889,503
|
140,014
|
Property and equipment, net
|
1,458,256
|
|
1,679,664
|
|
1,731,410
|
272,534
|
Rental deposits
|
60,091
|
|
79,091
|
|
85,012
|
13,381
|
Land
use right
|
24,353
|
|
23,889
|
|
23,735
|
3,736
|
Prepaid rent
|
18,597
|
|
63,268
|
|
65,491
|
10,309
|
Intangible assets, net
|
1,504
|
|
29,374
|
|
28,323
|
4,458
|
Goodwill
|
694
|
|
61,041
|
|
61,041
|
9,608
|
Other non-current assets
|
13,000
|
|
500
|
|
500
|
79
|
Deferred tax assets
|
24,239
|
|
53,287
|
|
57,086
|
8,986
|
Total
assets
|
2,206,654
|
|
2,808,162
|
|
2,942,101
|
463,105
|
LIABILITIES
AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable
|
192,556
|
|
208,758
|
|
225,338
|
35,470
|
Bills payable
|
20,590
|
|
10,177
|
|
3,295
|
519
|
Short-term bank loans
|
18,000
|
|
342,993
|
|
284,301
|
44,751
|
Accrued expenses and other payables
|
303,629
|
|
403,048
|
|
437,120
|
68,805
|
Amounts due to related parties
|
-
|
|
1,793
|
|
2,085
|
328
|
Income taxes payable
|
31,217
|
|
19,694
|
|
33,763
|
5,314
|
Total current
liabilities
|
565,992
|
|
986,463
|
|
985,902
|
155,187
|
Long-term bank borrowings
|
-
|
|
26,930
|
|
106,388
|
16,746
|
Accrued lease payments
|
177,060
|
|
218,184
|
|
229,024
|
36,050
|
Unfavorable lease contract
liability
|
-
|
|
7,643
|
|
7,474
|
1,176
|
Refundable deposits
|
17,050
|
|
15,250
|
|
15,250
|
2,400
|
Deferred revenue
|
1,490
|
|
748
|
|
660
|
104
|
Deferred rebate income
|
6,520
|
|
6,350
|
|
6,175
|
972
|
Borrowings from related parties
|
2,075
|
|
1,238
|
|
1,112
|
175
|
Income taxes
payable
|
-
|
|
6,644
|
|
6,644
|
1,046
|
Deferred tax
liabilities
|
1,233
|
|
3,039
|
|
3,128
|
492
|
Total
liabilities
|
771,420
|
|
1,272,489
|
|
1,361,757
|
214,348
|
Equity:
|
|
|
|
|
|
|
Ordinary shares
|
140,995
|
|
141,097
|
|
141,113
|
22,212
|
Treasury stock
|
-
|
|
-
|
|
(13,134)
|
(2,067)
|
Additional paid-in capital
|
1,601,658
|
|
1,632,426
|
|
1,638,440
|
257,900
|
Accumulated other comprehensive
income
|
7,555
|
|
(475)
|
|
656
|
103
|
Accumulated deficit
|
(317,838)
|
|
(219,379)
|
|
(163,812)
|
(25,783)
|
Total Equity
attributable to 7 Days Group Holdings Limited
|
1,432,370
|
|
1,553,669
|
|
1,603,263
|
252,365
|
Noncontrolling interests
|
2,864
|
|
(17,996)
|
|
(22,919)
|
(3,608)
|
Total equity
|
1,435,234
|
|
1,535,673
|
|
1,580,344
|
248,757
|
Total liabilities and equity
|
2,206,654
|
|
2,808,162
|
|
2,942,101
|
463,105
|
7 Days Group Holdings Limited
|
Unaudited Consolidated Statements of Operations
Information
|
|
|
Quarter Ended
|
|
Jun 30
|
|
Mar 31
|
|
Jun 30
|
|
2011
|
|
2012
|
|
2012
|
|
RMB'000
|
|
RMB'000
|
|
RMB'000
|
US$'000
|
Total
Revenues
|
528,097
|
|
577,639
|
|
671,080
|
105,632
|
Leased-and-operated
hotels
|
478,235
|
|
519,459
|
|
595,589
|
93,749
|
Managed
hotels
|
49,862
|
|
58,180
|
|
75,491
|
11,883
|
Less: Business
tax and surcharges
|
(30,982)
|
|
(32,612)
|
|
(38,350)
|
(6,037)
|
Net
revenues
|
497,115
|
|
545,027
|
|
632,730
|
99,595
|
|
|
|
|
|
|
|
Operating
costs and expenses
|
|
|
|
|
|
|
Hotel
operating costs
|
(382,732)
|
|
(466,480)
|
|
(489,262)
|
(77,013)
|
Rental expenses
|
(139,711)
|
|
(165,391)
|
|
(172,143)
|
(27,096)
|
Staff cost
|
(79,517)
|
|
(89,142)
|
|
(102,425)
|
(16,122)
|
Depreciation and amortization
|
(56,712)
|
|
(73,021)
|
|
(75,776)
|
(11,928)
|
Hotel supplies
|
(23,167)
|
|
(24,468)
|
|
(34,405)
|
(5,416)
|
Utilities
|
(29,801)
|
|
(57,773)
|
|
(37,959)
|
(5,975)
|
Other
|
(53,824)
|
|
(56,685)
|
|
(66,554)
|
(10,476)
|
Sales and
marketing expenses
|
(9,196)
|
|
(12,459)
|
|
(18,896)
|
(2,974)
|
General and
administrative expenses
|
(49,252)
|
|
(42,785)
|
|
(48,335)
|
(7,608)
|
|
|
|
|
|
|
|
Total
operating costs and expenses
|
(441,180)
|
|
(521,724)
|
|
(556,493)
|
(87,595)
|
Income from
operations
|
55,935
|
|
23,303
|
|
76,237
|
12,000
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
Interest
income
|
1,722
|
|
2,109
|
|
3,262
|
513
|
Interest
expense
|
(353)
|
|
(6,385)
|
|
(6,978)
|
(1,098)
|
Equity in
income of an
affiliate
|
130
|
|
-
|
|
-
|
-
|
Income before income taxes
|
57,434
|
|
19,027
|
|
72,521
|
11,415
|
Income tax expense
|
(15,593)
|
|
(7,341)
|
|
(21,344)
|
(3,360)
|
Net income
|
41,841
|
|
11,686
|
|
51,177
|
8,055
|
Net income attributable to noncontrolling
interest
|
3,215
|
|
7,283
|
|
4,390
|
691
|
Net income attributable to 7 Days Group Holdings
Limited ordinary
shareholders
|
45,056
|
|
18,969
|
|
55,567
|
8,746
|
|
|
|
|
|
|
|
Basic earnings per
ordinary share
|
0.30
|
|
0.13
|
|
0.37
|
0.06
|
Diluted earnings per
ordinary share
|
0.30
|
|
0.13
|
|
0.37
|
0.06
|
Net income
|
41,841
|
|
11,686
|
|
51,177
|
8,055
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
Foreign currency translation adjustment, net of nil
income tax
|
(4,014)
|
|
(805)
|
|
1,131
|
178
|
|
|
|
|
|
|
|
Comprehensive income
|
37,827
|
|
10,881
|
|
52,308
|
8,233
|
Less: comprehensive income attributable to
noncontrolling interest
|
(3,215)
|
|
(7,283)
|
|
(4,390)
|
(691)
|
Comprehensive income attributable to 7 Days Group
Holdings Limited ordinary shareholders
|
41,042
|
|
18,164
|
|
56,698
|
8,924
|
7 Days Group Holdings Limited
|
Reconciliation of GAAP and
Non-GAAP
Results
|
|
EBITDA(non-GAAP)
|
|
|
Quarter Ended
|
|
|
Jun 30
|
|
Mar 31
|
|
Jun 30
|
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB'000
|
|
RMB'000
|
|
RMB'000
|
US$'000
|
Net income attributable to 7 Days Group Holdings
Limited ordinary
shareholders
|
|
45,056
|
|
18,969
|
|
55,567
|
8,746
|
Interest income
|
|
(1,722)
|
|
(2,109)
|
|
(3,262)
|
(513)
|
Interest expense
|
|
353
|
|
6,385
|
|
6,978
|
1,098
|
Income tax expenses
|
|
15,593
|
|
7,341
|
|
21,344
|
3,360
|
Depreciation and amortization
|
|
57,956
|
|
75,170
|
|
78,290
|
12,323
|
EBITDA (non-GAAP)
|
|
117,236
|
|
105,756
|
|
158,917
|
25,014
|
EBITDA%
|
|
23.6%
|
|
19.4%
|
|
25.1%
|
25.1%
|
Share-based compensation expenses
|
|
11,049
|
|
8,868
|
|
5,845
|
920
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (non- GAAP) excluding share-based
compensation expenses
|
|
128,285
|
|
114,624
|
|
164,762
|
25,934
|
Adjusted EBITDA%
|
|
25.8%
|
|
21.0%
|
|
26.0%
|
26.0%
|
Non-GAAP net income attributable to 7 Days Group
Holdings Limited ordinary
shareholders
|
|
|
|
Quarter Ended
|
|
|
Jun 30
|
|
Mar 31
|
|
Jun 30
|
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB'000
|
|
RMB'000
|
|
RMB'000
|
US$'000
|
Net income attributable to 7 Days
Group Holdings Limited ordinary
shareholders
(GAAP)
|
|
45,056
|
|
18,969
|
|
55,567
|
8,746
|
|
|
|
|
|
|
|
|
Share-based compensation expenses
|
|
11,049
|
|
8,868
|
|
5,845
|
920
|
|
|
|
|
|
|
|
|
Net income attributable to ordinary shareholders excluding
share-based compensation
expenses
(Non GAAP net
income)
|
|
56,105
|
|
27,837
|
|
61,412
|
9,666
|
Earnings per share
|
|
|
Quarter Ended
|
|
|
Jun 30
|
|
Mar31
|
|
Jun 30
|
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
USD
|
Basic earnings per ordinary share
(GAAP)
|
|
0.30
|
|
0.13
|
|
0.37
|
0.06
|
Diluted earnings per ordinary share
(GAAP)
|
|
0.30
|
|
0.13
|
|
0.37
|
0.06
|
|
|
|
|
|
|
|
|
Basic earnings per ordinary
share(Non-GAAP), excluding share-based compensation
expenses
|
|
0.37
|
|
0.19
|
|
0.41
|
0.06
|
|
|
|
|
|
|
|
|
Diluted earnings per ordinary
share(Non-GAAP), excluding share-based compensation
expenses
|
|
0.37
|
|
0.18
|
|
0.41
|
0.06
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
Basic weighted average number of ordinary
shares
|
|
149,757,234
|
|
149,942,510
|
|
149,914,680
|
Diluted weighted average number of ordinary
shares
|
|
151,412,116
|
|
151,299,954
|
|
150,456,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
30-Jun-11
|
31-Mar-12
|
30-Jun-12
|
|
RMB '000
|
RMB '000
|
RMB'000
|
USD'000
|
Hotel operating
cost
|
|
|
|
|
|
GAAP Result
|
(382,732)
|
(466,480)
|
(489,262)
|
(77,013)
|
|
% of Total net revenue
|
76.99%
|
85.59%
|
77.33%
|
77.33%
|
|
Share-based Compensation
|
678
|
555
|
273
|
43
|
|
% of Total net revenue
|
0.14%
|
0.10%
|
0.04%
|
0.04%
|
|
Non-GAAP Result
|
(382,054)
|
(465,925)
|
(488,989)
|
(76,970)
|
|
% of Total net revenue
|
76.85%
|
85.49%
|
77.28%
|
77.28%
|
|
|
|
|
|
|
Sales and marketing expenses
|
|
|
|
|
|
GAAP Result
|
(9,196)
|
(12,459)
|
(18,896)
|
(2,974)
|
|
% of Total net revenue
|
1.85%
|
2.29%
|
2.99%
|
2.99%
|
|
Share-based Compensation
|
18
|
586
|
614
|
97
|
|
% of Total net revenue
|
0.00%
|
0.11%
|
0.10%
|
0.10%
|
|
Non-GAAP Result
|
(9,178)
|
(11,873)
|
(18,282)
|
(2,877)
|
|
% of Total net revenue
|
1.85%
|
2.18%
|
2.89%
|
2.89%
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
|
|
|
GAAP Result
|
(49,252)
|
(42,785)
|
(48,335)
|
(7,608)
|
|
% of Total net revenue
|
9.91%
|
7.85%
|
7.64%
|
7.64%
|
|
Share-based Compensation
|
10,353
|
7,727
|
4,958
|
780
|
|
% of Total net revenue
|
2.08%
|
1.42%
|
0.78%
|
0.78%
|
|
Non-GAAP Result
|
(38,899)
|
(35,058)
|
(43,377)
|
(6,828)
|
|
% of Total net revenue
|
7.82%
|
6.43%
|
6.86%
|
6.86%
|
|
|
|
|
|
|
Total operating cost and expenses
|
|
|
|
|
|
GAAP Result
|
(441,180)
|
(521,724)
|
(556,493)
|
(87,595)
|
|
% of Total net revenue
|
88.75%
|
95.72%
|
87.95%
|
87.95%
|
|
Share-based Compensation
|
11,049
|
8,868
|
5,845
|
902
|
|
% of Total net revenue
|
2.22%
|
1.63%
|
0.92%
|
0.92%
|
|
Non-GAAP Result
|
(430,131)
|
(512,856)
|
(550,648)
|
(86,675)
|
|
% of Total net revenue
|
86.53%
|
94.10%
|
87.03%
|
87.03%
|
|
|
|
|
|
|
Income from operations
|
|
|
|
|
|
GAAP Result
|
55,935
|
23,303
|
76,237
|
12,000
|
|
% of Total net revenue
|
11.25%
|
4.28%
|
12.05%
|
12.05%
|
|
Share-based Compensation
|
11,049
|
8,868
|
5,845
|
920
|
|
% of Total net revenue
|
2.22%
|
1.63%
|
0.92%
|
0.92%
|
|
Non-GAAP Result
|
66,984
|
32,171
|
82,082
|
12,920
|
|
% of Total net revenue
|
13.47%
|
5.90%
|
12.97%
|
12.97%
|
|
|
|
|
|
|
|
7 Days Group Holdings Limited
|
Operating Data
|
|
|
|
As of and for
the Quarter Ended
|
|
|
Jun 30
|
Mar 31
|
Jun 30
|
|
|
2011
|
2012
|
2012
|
|
|
|
|
|
Hotels in operation
|
|
722
|
1,044
|
1,132
|
Leased-and-operated hotels
|
|
341
|
417
|
435
|
Managed hotels
|
|
381
|
627
|
697
|
|
|
|
|
|
Hotels under conversion
|
|
241
|
189
|
226
|
Leased-and-operated hotels
|
|
43
|
30
|
50
|
Managed hotels
|
|
198
|
159
|
176
|
|
|
|
|
|
Total hotel rooms for hotels in
operation
|
|
72,150
|
104,191
|
112,631
|
Leased-and-operated hotels
|
|
35,254
|
43,800
|
45,701
|
Managed hotels
|
|
36,896
|
60,391
|
66,930
|
|
|
|
|
|
Total hotel rooms for hotels under
conversion
|
|
23,064
|
18,542
|
21,961
|
|
|
|
|
|
Number of cities covered for hotels in
operation
|
|
111
|
162
|
168
|
|
|
|
|
|
Average occupancy rate
|
|
87.5%
|
77.7%
|
84.6%
|
Leased-and-operated hotels
|
|
91.1%
|
79.5%
|
86.8%
|
Managed hotels
|
|
83.8%
|
76.3%
|
83.0%
|
|
|
|
|
|
Average daily rate (in RMB)
|
|
161.5
|
156.4
|
161.7
|
Leased-and-operated hotels
|
|
167.4
|
161.9
|
167.2
|
Managed hotels
|
|
154.8
|
152.1
|
157.7
|
|
|
|
|
|
RevPAR (in RMB)
|
|
141.3
|
121.5
|
136.8
|
Leased-and-operated hotels
|
|
152.4
|
128.8
|
145.1
|
Managed hotels
|
|
129.7
|
116.0
|
130.9
|
SOURCE 7 Days Group Holdings Limited