EX-99.1 2 v434442_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

Homeinns Hotel Group Reports Fourth Quarter and Full Year 2015 Financial Results

2,922 Hotels in Operation in 355 Cities across China

 

Shanghai, March 16, 2016 – Homeinns Hotel Group (NASDAQ: HMIN) (“Homeinns” or “the Company”), a leading economy hotel chain in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2015.

  

Fourth Quarter and Full Year 2015 Highlights

 

·Total revenues increased 2.6% year over year to RMB 1,677.4 million (US$258.9 million) for the fourth quarter of 2015. For the full year 2015, total revenues decreased 0.2% year over year to RMB 6,671.1 million (US$1,029.8 million).
·Net loss attributable to ordinary shareholders was RMB 13.1 million (US$2.0 million) for the fourth quarter of 2015, compared with net income attributable to ordinary shareholders of RMB 84.6 million for the fourth quarter of 2014. For the full year 2015, net income attributable to ordinary shareholders was RMB 167.0 million (US$25.8 million), compared with net income attributable to ordinary shareholders of RMB 513.1 million for the full year 2014.
·Adjusted net income attributable to ordinary shareholders (non-GAAP) decreased 44.6% year over year to RMB 61.5 million (US$9.5 million) for the fourth quarter of 2015. For the full year 2015, adjusted net income attributable to ordinary shareholders (non-GAAP) decreased 30.2% year over year to RMB 373.9 million (US$57.7 million).
·EBITDA (non-GAAP) decreased 28.3% year over year to RMB 239.7 million (US$37.0 million) for the fourth quarter of 2015. For the full year 2015, EBITDA (non-GAAP) decreased 24.7% year over year to RMB 1,168.8 million (US$180.4 million).
·Adjusted EBITDA (non-GAAP) decreased 12.9% year over year to RMB 314.2 million (US$48.5 million) for the fourth quarter of 2015. For the full year 2015, adjusted EBITDA (non-GAAP) decreased 12.7% year over year to RMB 1,375.7 million (US$212.4 million).
·Net operating cash inflow decreased 37.9% year over year to RMB 216.2 million (US$33.4 million) for the fourth quarter of 2015 and decreased 16.2% year over year to RMB 1,127.8 million (US$174.1 million) for the full year 2015.
·As of December 31, 2015, Homeinns operated 2,922 hotels in 355 cities across China, with a net addition of 135 hotels during the fourth quarter and 313 hotels during the full year 2015.

 

Hotel Development

 

   Hotels in Operations and Pipeline 
   Group   Homeinn   Motel   Fairy-
land		   Yitel   Homeinn
Plus		   Superior*   Ripple*   Pebble
Motel*		   Comma** 
Total Number of Hotels   2,922    2,341    422    29    68    53    1    2    4    2 
Leased-and-Operated   929    680    162    21    29    35    0    0    0    2 
Franchised-and-Managed   1,987    1,661    260    8    39    18    0    1    0    0 
Franchised   6    0    0    0    0    0    1    1    4    0 
                                                   
Contracted or under Construction   171    95    22    2    21    20    0    0    0    11 
Leased-and-Operated   33    4    2    0    8    8    0    0    0    11 
Franchised-and-Managed   138    91    20    2    13    12    0    0    0    0 
Under Due Diligence   165    129    10    0    10    9    0    1    3    3 

* Superior, Ripple and Pebble Motel are new hotel brands launched during the fourth quarter of 2015.

**Comma is an apartment product launched during the fourth quarter of 2015.

  

   Openings   Closures* 
   4Q2015   FY2015   4Q2015   FY2015 
Total Number of Hotels   170    431    35    118 
Leased-and-Operated   32    62    20    47 
Franchised-and-Managed   132    363    15    71 
Franchised   6    6    0    0 

* Among these closures, 11 leased-and-operated hotels were closed due to conversion to our other brands, and one leased-and-operated hotel was closed and converted to a franchised-and-managed hotel during the fourth quarter of 2015. 26 leased-and-operated hotels were closed to convert to our other brands, and 3 leased-and-operated hotels were closed and converted to franchised-and-managed hotels during the full year 2015.

 

 

 

  

Operating Metrics

 

   Total Hotels 
   4Q2015   3Q2015   4Q2014   FY2015   FY2014 
Occupancy Rate   83.1%   86.6%   79.6%   83.2%   83.6%
Average Daily Rate (ADR, RMB)   159    171    163    162    165 
Revenue per Available Room (RevPAR, RMB)   132    148    130    134    138 

 

   Hotels Opened for at least 18 Months 
   4Q2015   4Q2014   FY2015   FY2014 
Occupancy Rate   84.0%   81.3%   84.5%   85.3%
Average Daily Rate (ADR, RMB)   157    161    161    165 
Revenue per Available Room (RevPAR, RMB)   132    131    136    141 

  

For the fourth quarter of 2015, occupancy rate increased by 3.5 percentage points while ADR decreased by 2.5% compared with the fourth quarter of 2014, resulting in an increase of 1.5% in RevPAR. For the full year 2015, occupancy rate decreased by 0.4 percentage points while ADR decreased by 1.8% compared with the full year 2014, resulting in a decrease of 2.9% in RevPAR.

 

As of December 31, 2015, a total of 2,257 hotels had been in operation for at least 18 months. During the fourth quarter of 2015, occupancy rate of these hotels increased year over year from 81.3% to 84.0%, and ADR decreased year over year from RMB 161 to RMB 157, resulting in an increase in RevPAR by 0.8% from RMB 131 to RMB 132. For the full year 2015, occupancy rate of these hotels decreased year over year from 85.3% to 84.5%, and ADR decreased year over year from RMB 165 to RMB 161, resulting in a decrease in RevPAR by 3.5% from RMB 141 to RMB 136.

 

Homeinns Hotel Group had a total of 53.9 million unique non-corporate members under its frequent guests program as of December 31, 2015.

 

Financial Results for Fourth Quarter and Full Year 2015

 

Revenues                                
                                 
(RMB/USD in Millions)  4Q2015   4Q2014       FY2015   FY2014     
   RMB   USD   RMB   V%   RMB   USD   RMB   V% 
Leased-and-Operated Hotels   1,402.3    216.5    1,391.1    0.8%   5,631.2    869.3    5,741.8    -1.9%
Franchised-and-Managed Hotels   275.2    42.5    244.2    12.7%   1,039.9    160.5    940.9    10.5%
Total Revenues   1,677.4    258.9    1,635.3    2.6%   6,671.1    1,029.8    6,682.7    -0.2%
Less: Business Taxes   -99.7    -15.4    -100.3    -0.6%   -395.4    -61.0    -411.1    -3.8%
Net Revenues   1,577.7    243.6    1,535.0    2.8%   6,275.7    968.8    6,271.6    0.1%

 

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

For the fourth quarter of 2015, revenues from leased-and-operated hotels increased 0.8% year over year to RMB 1.40 billion (US$216.5 million). The year-over-year increase in revenues from leased-and-operated hotels in the fourth quarter of 2015 was mainly due to an increase in RevPAR. Revenues from franchised-and-managed hotels increased 12.7% year over year to RMB 275.2 million (US$42.5 million) for the fourth quarter of 2015. The year-over-year increase in revenues from franchised-and-managed hotels in the fourth quarter of 2015 was mainly driven by an increase in the number of hotels and hotel rooms in operation.

 

For the full year 2015, revenues from leased-and-operated hotels decreased 1.9% year over year to RMB 5.63 billion (US$869.3 million). The year-over-year decrease in revenues from leased-and-operated hotels in the full year 2015 was mainly due to a decrease in RevPAR. Revenues from franchised-and-managed hotels increased 10.5% year over year to RMB 1.04 billion (US$160.5 million) for the full year of 2015. The year-over-year increase in revenues from franchised-and-managed hotels was mainly driven by an increase in the number of hotels and hotel rooms in operation, although partially offset by a decrease in RevPAR.

 

 

 

 

  

Total Operating Costs and Expenses / Income from Operations

 

(RMB/USD in Millions)  Fourth Quarter 2015 
           Adjusted 
   GAAP Results   Non-GAAP Results* 
   RMB   USD   Vpts   RMB   USD   Vpts 
Leased-and-Operated Hotel Costs   1,352.7    208.8    1.2pts   1,349.6    208.3    1.3pts
Personnel Costs of Franchised-and-Managed Hotels   35.7    5.5    0.0pts   31.8    4.9    0.0pts
Sales and Marketing Expenses   41.3    6.4    1.1pts   41.2    6.4    1.1pts
General and Administrative Expenses   122.7    18.9    2.6pts   68.5    10.6    0.3pts
Total Operating Costs and Expenses   1,552.3    239.6    4.9pts   1,491.1    230.2    2.7pts
Income from Operations   19.9    3.1    -5.1pts   81.0    12.5    -2.8pts

 

   Full Year 2015 
               Adjusted 
   GAAP Results   Non-GAAP Results* 
   RMB   USD   Vpts   RMB   USD   Vpts 
Leased-and-Operated Hotel Costs   5,211.7    804.5    3.0pts   5,199.9    802.7    3.0pts
Personnel Costs of Franchised-and-Managed Hotels   228.2    35.2    0.4pts   214.8    33.2    0.4pts
Sales and Marketing Expenses   115.1    17.8    0.1pts   114.4    17.7    0.1pts
General and Administrative Expenses   362.0    55.9    0.8pts   258.3    39.9    0.2pts
Total Operating Costs and Expenses   5,917.0    913.4    4.2pts   5,787.5    893.4    3.7pts
Income from Operations   350.7    54.1    -4.3pts   480.3    74.1    -3.8pts

*Adjusted Non-GAAP results exclude share-based compensation expenses, integration costs, and expenses related to going-private activities.

Note: “Vpts” represents year-over-year change in percentage points of total revenues

 

For the fourth quarter of 2015, total operating costs and expenses were RMB 1.55 billion (US$239.6 million), representing 92.5% of total revenues. Total operating costs and expenses excluding any share-based compensation expenses, integration costs and expenses related to going-private activities (non-GAAP) for the fourth quarter of 2015 were 88.9% of total revenues, compared to 86.2% in the same period a year ago.

 

For the full year 2015, total operating costs and expenses were RMB 5.92 billion (US$913.4 million), representing 88.7% of total revenues. Total operating costs and expenses excluding any share-based compensation expenses, integration costs and expenses related to going-private activities (non-GAAP) for the full year 2015 were 86.8% of total revenues, compared to 83.1% in the same period a year ago.

 

·Total leased-and-operated hotel costs were RMB 1.35 billion (US$208.8 million) for the fourth quarter of 2015, representing 96.5% of the leased-and-operated hotel revenues, compared to 93.3% 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 96.2% of the leased-and-operated hotel revenues in the fourth quarter of 2015, compared to 93.1% in the same period a year ago. The year-over-year increase in total leased-and-operated hotel costs as a percentage of leased-and-operated hotel revenues for the fourth quarter of 2015 was mainly due to the higher rental and depreciation cost from our having a higher proportion of midscale hotels and to the higher depreciation cost from economy hotel upgrading.

 

Total leased-and-operated hotel costs were RMB 5.21 billion (US$804.5 million) for the full year 2015, representing 92.5% of the leased-and-operated hotel revenues, compared to 87.5% in 2014. Total leased-and-operated hotel costs excluding any share-based compensation expenses and integration costs (non-GAAP) were 92.3% of the leased-and-operated hotel revenues in the full year 2015, compared to 87.2% in 2014. The year-over-year increase in total leased-and-operated hotel costs as a percentage of leased-and-operated hotel revenues for the full year 2015 was mainly due to increased rental and depreciation costs and a decrease in RevPAR which resulted in a lower revenue base per hotel while a significant portion of the hotel costs was fixed.

 

Pre-opening cost was RMB 22.5 million (US$3.5 million) for the fourth quarter of 2015, compared to RMB 18.5 million in the fourth quarter of 2014. For the full year 2015, pre-opening cost was RMB 77.4 million (US$11.9 million), compared to RMB 44.6 million in 2014.

 

 

 

  

·Personnel costs of franchised-and-managed hotels were RMB 35.7 million (US$5.5 million) for the fourth quarter of 2015, representing 13.0% of the franchised-and-managed hotel revenues, compared to 14.0% in the same period a year ago. Franchised-and-managed hotels personnel costs excluding share-based compensation expenses (non-GAAP) were 11.6% of franchised-and-managed hotel revenues in the fourth quarter of 2015, compared to 12.6% 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 fourth quarter of 2015 was mainly due to the lower year-end bonuses.

 

Personnel costs of franchised-and-managed hotels were RMB 228.2 million (US$35.2 million) for the full year 2015, representing 21.9% of the franchised-and-managed hotel revenues, compared to 21.4% in 2014. Franchised-and-managed hotels personnel costs excluding share-based compensation expenses (non-GAAP) were 20.7% of franchised-and-managed hotel revenues in the full year 2015, compared to 20.0% in 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 full year 2015 was mainly due to a lower revenue base per hotel.

 

·Sales and marketing expenses were RMB 41.3 million (US$6.4 million) for the fourth quarter of 2015, representing 2.5% of total revenues, compared to 1.4% in the same period a year ago. Sales and marketing expenses excluding share-based compensation expenses (non-GAAP) were 2.5% of total revenues for the fourth quarter of 2015, compared to 1.4% in the same period of 2014. The year-over-year increase in sales and marketing expenses as a percentage of total revenues for the fourth quarter of 2015 was mainly due to the increased cost related to membership loyalty program.

 

Sales and marketing expenses were RMB 115.1 million (US$17.8 million) for the full year 2015, representing 1.7% of total revenues, compared to 1.6% in 2014. Sales and marketing expenses excluding share-based compensation expenses (non-GAAP) were 1.7% of total revenues for the full year 2015, compared to 1.6% in 2014.

 

·General and administrative expenses were RMB 122.7 million (US$18.9 million) for the fourth quarter of 2015, representing 7.3% of total revenues, compared to 4.7% in the same period a year ago. General and administrative expenses excluding share-based compensation expenses, integration costs, and expenses related to going-private activities (non-GAAP) were 4.1% of total revenues for the fourth quarter of 2015, compared to 3.7% in the same period of 2014. The year-over-year increase in general and administrative expenses as a percentage of total revenues for the fourth quarter of 2015 was mainly due to increased staff cost for new product development.

 

General and administrative expenses were RMB 362.0 million (US$55.9 million) for the full year 2015, representing 5.4% of total revenues, compared to 4.7% in 2014. General and administrative expenses excluding share-based compensation expenses, integration costs, acquisition expenses, and expenses related to going-private activities (non-GAAP) were 3.9% of total revenues for the full year 2015, compared to 3.7% in 2014. The year-over-year increase in general and administrative expenses as a percentage of total revenues for the full year 2015 was mainly due to a bad debt provision related to a specific hotel project.

 

Income from Operations was RMB 19.9 million (US$3.1 million) for the fourth quarter of 2015 compared to RMB 102.5 million in the same period a year ago. Income from operations excluding share-based compensation expenses, integration costs and expenses related to going-private activities (non-GAAP) for the fourth quarter of 2015 was RMB 81.0 million (US$12.5 million), or 4.8% of total revenues, compared to RMB 125.6 million, or 7.7% of total revenues, in the same period of 2014.

 

For the full year of 2015, income from operations was RMB 350.7 million (US$54.1 million) compared to RMB 640.6 million in 2014. Income from operations excluding share-based compensation expenses, integration costs and expenses related to going-private activities (non-GAAP) for the full year 2015 was RMB 480.3 million (US$74.1 million), or 7.2% of total revenues, compared to RMB 736.3 million, or 11.0% of total revenues, in 2014.

 

EBITDA (non-GAAP)

 

(RMB/USD in Millions)  Fourth Quarter 2015   Fourth Quarter 2014 
   RMB   USD   %Rev   V%   RMB   USD   %Rev 
EBITDA (Non-GAAP)   239.7    37.0    14.3%   -28.3%   334.3    51.6    20.4%
Foreign Exchange Loss/(Gain), Net   5.9    0.9    0.4%        -4.6    -0.7    -0.3%
Share-Based Compensation   17.7    2.7    1.1%        21.3    3.3    1.3%
Expenses Related to Going-Private Activities   41.9    6.5    2.5%        -    -    - 
Integration Costs   1.6    0.3    0.1%        1.8    0.3    0.1%
Loss on Change in Fair Value of Convertible Notes   7.5    1.2    0.4%        7.9    1.2    0.5%
Adjusted EBITDA (Non-GAAP)   314.2    48.5    18.7%   -12.9%   360.7    55.7    22.1%

 

 

 

  

   Full Year 2015   Full Year 2014 
   RMB   USD   %Rev   V%   RMB   USD   %Rev 
EBITDA (Non-GAAP)   1,168.8    180.4    17.5%   -24.7%   1,553.1    239.8    23.2%
Foreign Exchange Loss, Net   41.0    6.3    0.6%        11.5    1.8    0.2%
Share-Based Compensation   76.4    11.8    1.1%        87.7    13.5    1.3%
Acquisition Expenses   -    -    -         0.7    0.1    0.0%
Expenses Related to Going-Private Activities   46.7    7.2    0.7%        -    -    - 
Integration Costs   6.4    1.0    0.1%        7.3    1.1    0.1%
Gain on Waived Liability Related with Motel Acquisition   -    -    -         -11.9    -1.8    -0.2%
Loss/(Gain) on Buy-Back of Convertible Notes   1.7    0.3    0.0%        -0.7    -0.1    0.0%
Loss/(Gain) on Change in Fair Value of Convertible Notes   34.6    5.3    0.5%        -71.9    -11.1    -1.1%
Adjusted EBITDA (Non-GAAP)   1,375.7    212.4    20.6%   -12.7%   1,575.7    243.3    23.6%
Note:“%Rev” represents amount as a percentage of total revenues
“V%” represents year-over-year percentage change in amounts

 

Net Income Attributable to Ordinary Shareholders

 

(RMB/USD in Millions)  Fourth Quarter 2015   Fourth Quarter 2014 
   RMB   USD   %Rev   V%   RMB   USD   %Rev 
Net Income Attributable to Ordinary Shareholders (GAAP)   -13.1    -2.0    -0.8%   -115.4%   84.6    13.1    5.2%
Foreign Exchange Loss/(Gain), Net   5.9    0.9    0.4%        -4.6    -0.7    -0.3%
Share-Based Compensation   17.7    2.7    1.1%        21.3    3.3    1.3%
Expenses Related to Going-Private Activities   41.9    6.5    2.5%        -    -    - 
Integration Costs   1.6    0.3    0.1%        1.8    0.3    0.1%
Loss/(Gain) on Change in Fair Value of Convertible Notes   7.5    1.2    0.4%        7.9    1.2    0.5%
Adjusted net income attributable to ordinary shareholders (Non-GAAP)   61.5    9.5    3.7%   -44.6%   110.9    17.1    6.8%

 

   Full Year 2015   Full Year 2014 
   RMB   USD   %Rev   V%   RMB   USD   %Rev 
Net Income Attributable to Ordinary Shareholders (GAAP)   167.0    25.8    2.5%   -67.4%   513.1    79.2    7.7%
Foreign Exchange Loss, Net   41.0    6.3    0.6%        11.5    1.8    0.2%
Share-Based Compensation   76.4    11.8    1.1%        87.7    13.5    1.3%
Acquisition Expenses   -    -    -         0.7    0.1    0.0%
Expenses Related to Going-Private Activities   46.7    7.2    0.7%        -    -    - 
Integration Costs   6.4    1.0    0.1%        7.3    1.1    0.1%
Gain on Waived Liability Related with Motel Acquisition   -    -    -         -11.9    -1.8    -0.2%
Loss/(Gain) on Buy-Back of Convertible Notes   1.7    0.3    0.0%        -0.7    -0.1    0.0%
Loss/(Gain) on Change in Fair Value of Convertible Notes   34.6    5.3    0.5%        -71.9    -11.1    -1.1%
Adjusted net income attributable to ordinary shareholders (Non-GAAP)   373.9    57.7    5.6%   -30.2%   535.8    82.7    8.0%

Note:“%Rev” represents amount as a percentage of total revenues
 “V%” represents year-over-year percentage change in amounts

  

Adjusted Net Income Attributable to Ordinary Shareholders (Non–GAAP) decreased year over year by 44.6% to RMB 61.5 million (US$9.5 million) for the fourth quarter 2015, representing 3.7% of total revenues compared to 6.8% in the same period a year ago. For the full year 2015, adjusted net income attributable to ordinary shareholders (Non–GAAP) decreased year over year by 30.2% to RMB 373.9 million (US$57.7 million), representing 5.6% of total revenues compared to 8.0% in 2014. The year-over-year decreases in adjusted net margins (non-GAAP)1 for both the quarter and full year were mainly due to the decreases in adjusted income from operations margin (non-GAAP)2.

 

 

 

1“Adjusted net margin rate (non-GAAP)” is defined as adjusted net income (non-GAAP) as a percentage of total revenues.

 

2“Adjusted income from operations margin rate (non-GAAP)” is defined as income from operations excluding share-based compensation expenses, integration costs, acquisition expenses, and expenses related to going-private activities (non-GAAP) as a percentage of total revenues.

 

 

 

  

Basic and Diluted Earnings Per Share / Earnings Per ADS

 

   Fourth Quarter 2015   Full Year 2015 
   Ordinary Share   ADS Share   Ordinary Share   ADS Share 
   RMB   USD   RMB   USD   RMB   USD   RMB   USD 
Basic   -0.14    -0.02    -0.28    -0.04    1.74    0.27    3.48    0.54 
Diluted   -0.14    -0.02    -0.28    -0.04    1.74    0.27    3.48    0.54 
                                         
Adjusted Basic (Non-GAAP)   0.64    0.10    1.28    0.20    3.89    0.60    7.78    1.20 
Adjusted Diluted (Non-GAAP)   0.64    0.10    1.28    0.20    3.83    0.59    7.66    1.18 

 

Cash Flow

 

For the fourth quarter of 2015, net operating cash inflow was RMB 216.2 million (US$33.4 million), compared to RMB 348.1 million in the same period of 2014. Capitalized expenditures for the fourth quarter of 2015 were RMB 284.5 million (US$43.9 million), while related cash paid for capital expenditures during the quarter was RMB 151.8 million (US$23.4 million).

 

For the full year 2015, net operating cash inflow was RMB 1.13 billion (US$174.1 million), compared to RMB 1.35 billion in 2014. Capitalized expenditures for the full year 2015 were RMB 727.4 million (US$112.3 million), while related cash paid for capital expenditures during the year was RMB 619.4 million (US$95.6 million).

 

Balance Sheet

 

As of December 31, 2015, Homeinns Hotel Group had cash and cash equivalents of RMB 1,093.7 million (US$168.8 million). The convertible notes issued in December 2010 were fully repaid in December 2015.

 

Upcoming HMIN Extraordinary General Meeting

 

The Company has scheduled an extraordinary general meeting to be held on March 25, 2016, at 10:00 a.m. Shanghai time, at the executive offices of the Company, located at 124 Cao Bao Road, Shanghai, 200235, People’s Republic of China. The extraordinary general meeting is being convened to consider and vote on, among other matters, the proposal to authorize and approve the previously announced agreement and plan of merger dated as of December 6, 2015, among (i) the Company, (ii) BTG Hotels Group (HONGKONG) Holdings Co., Limited (“Holdco”), a wholly owned subsidiary of BTG Hotels (Group) Co., Ltd., a PRC joint stock company that is listed on the Shanghai Stock Exchange (“BTG Hotels”), (iii) BTG Hotels Group (CAYMAN) Holding Co., Ltd (“Merger Sub”), a wholly owned subsidiary of Holdco, and (iv) solely for the purposes of certain sections thereof, BTG Hotels. Subject to the approval of the extraordinary general meeting, Merger Sub will be merged with and into the Company pursuant to the agreement and plan of merger, with the Company continuing as the surviving company. A related transaction statement on Schedule 13E-3 and a proxy statement with respect thereto were filed with the SEC on February 23, 2016. Investors, shareholders and ADS holders of the Company are urged to read carefully and in their entirety these and other materials filed with or furnished to the SEC when they become available, as they contain important information about the Company, the proposed merger and related matters. The proxy statement was mailed to the Company’s ADS holders on or about February 26, 2016 and to the Company’s shareholders on or about March 4, 2016. The Special Committee of the Board comprised of independent directors reviewed the transaction and recommends that stockholders approve the transaction.

 

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 6.4778 to US$1.00, the noon buying rate for December 31, 2015 set forth in the H.10 statistical release of the Federal Reserve Board.

 

About Homeinns Hotel Group

 

Homeinns Hotel Group is a leading economy hotel chain in China based on number of hotels and hotel rooms as well as geographic coverage of the hotel chain. Since the Company commenced operations in 2002, it has built Homeinn as one of the best-known economy hotel brands in China. In October of 2011, the Company acquired Motel 168, another well-known hotel chain in China, as its second economy hotel brand. Homeinns Hotel Group aims to offer a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Homeinns Hotel Group's ADSs, each of which represents two ordinary shares, are currently trading on the NASDAQ Global Select Market under the symbol "HMIN." For more information about Homeinns Hotel Group, please visit http://english.homeinns.com.

 

 

 

  

Safe Harbor

 

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995.These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Any statements in this press release that are not historical facts are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brands; trends and competition in the lodging industry; the expected growth of the lodging market in China; and other factors and risks detailed in our filings with the Securities and Exchange Commission. This press release also contains statements or projections that are based upon information available to the public, as well as other information from sources which management believes to be reliable, but it is not guaranteed by us to be accurate, nor does it purport to be complete. We undertake no obligation to update or revise to the public any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

 

Non-GAAP Financial Measures

 

To supplement Homeinns Hotel Group’s unaudited consolidated financial results presented in accordance with U.S. GAAP, Homeinns Hotel Group uses the following non-GAAP measures:

(a)total operating costs and expenses excluding share-based compensation expenses and acquisition and integration costs and expenses related to going-private activities
(b)total leased-and-operated hotel costs excluding share-based compensation expenses and integration costs
(c)personnel costs of franchised-and-managed hotels excluding share-based compensation expenses
(d)sales and marketing expenses excluding share-based compensation expenses
(e)general and administrative expenses excluding share-based compensation expenses and acquisition and integration costs and expenses related to going-private activities

 

(f)income from operations excluding share-based compensation expenses and acquisition and integration costs and expenses related to going-private activities

 

(g)adjusted net income attributable to shareholders excluding any share-based compensation expenses, foreign exchange gain or loss, acquisition and integration cost, upfront fee amortization of term loan, gain or loss from fair value change of convertible notes and interest swap derivatives and other non-operating expenses and expenses related to going-private activities

 

(h)adjusted basic and diluted earnings per ADS and per share excluding foreign exchange gain or loss, share-based compensation expenses, gain on buy-back of convertible bonds, issuance costs for convertible notes, gain or loss from fair value change of convertible notes, acquisition and integration cost, non-operating expenses and upfront fee amortization of term loan, and expenses related to going-private activities

 

(i)adjusted EBITDA excluding foreign exchange gain or loss, share-based compensation expenses, gain on buy-back of convertible bonds, issuance costs for convertible notes, gain or loss from fair value change of convertible notes, acquisition and integration costs, non-operating expenses and upfront fee amortization of term loan and expenses related to going-private activities

 

The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of GAAP and non-GAAP results” set forth at the end of this press release.

 

 

 

  

Homeinns Hotel Group believes that, used in conjunction with GAAP financial measures, these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance, and both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance and when planning and forecasting future periods. Management believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization, is a useful financial metric to assess Homeinns Hotel Group’s operating and financial performance before the impact of investing and financing transactions and income taxes. In addition, management believes that EBITDA is widely used by other companies in the lodging industry and may be used as an analysis tool by both management and investors to measure and compare Homeinns Hotel Group’s operational and financial performance with industry peers.

 

One of the limitations of using non-GAAP income from operations, EBITDA, adjusted EBITDA and non-GAAP net income attributable to shareholders is that they do not include all items that impact Homeinns Hotel Group’s net income (loss) for the period. These non-GAAP measures exclude share-based compensation expenses, foreign exchange gain or loss and gain or loss from fair value change of convertible notes, which have been and will continue to be a significant recurring expense in Homeinns Hotel Group’s business. In addition, Homeinns Hotel Group’s EBITDA and adjusted EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as Homeinns Hotel Group does. Management compensates for this and other limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. Homeinns Hotel Group computes the non-GAAP financial measures using the same consistent method from quarter to quarter. Reconciliations of GAAP and non-GAAP results are included at the end of this press release. The non-GAAP adjustment items do not include the tax impact.

 

The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that Homeinns Hotel Group’s future results will be unaffected by other charges and gains Homeinns Hotel Group considers to be outside the ordinary course of its business.

 

Homeinns Hotel Group completed its acquisition of 100% equity interest in Motel 168, or Motel, and took control of Motel effective on October 1, 2011. Homeinns Hotel Group had consolidated Motel’s operating and financial results since October 1, 2011. By the third quarter of 2013, Homeinns Hotel Group had substantially completed Motel’s integration and ceased to present separate operating metrics and revenues for Motel.

 

For investor and media inquiries, please contact:

 

Mingjia Ding

Homeinns Hotel Group

Tel: +86-21-3337-3333*3870

Email: mjding@homeinns.com

 

Cara O’Brien

FTI Consulting

Tel: +852-3768-4537

Email: cara.obrien@fticonsulting.com

 

 

 

 

 

Homeinns Hotel Group
Unaudited Condensed Consolidated Balance Sheet

  

   December 31, 2014   December 31, 2015 
   RMB '000   RMB '000   US$ '000 
             
ASSETS               
Current assets:               
Cash and cash equivalents   949,690    1,093,695    168,837 
Restricted cash   12,726    11,522    1,779 
Accounts receivable, net   95,501    106,122    16,382 
Receivables from related parties   3,476    3,469    536 
Consumables   44,446    51,032    7,878 
Prepayments and other current assets   171,703    246,544    38,060 
Deferred tax assets   129,685    131,166    20,249 
                
Total current assets   1,407,227    1,643,550    253,721 
                
Investment   11,709    14,682    2,267 
Property and equipment, net   4,000,041    3,831,431    591,471 
Goodwill   2,323,241    2,326,289    359,117 
Intangible assets, net   1,126,636    1,079,616    166,664 
Other assets   90,995    109,161    16,852 
Non-current deferred tax assets   434,847    487,596    75,272 
                
Total assets   9,394,696    9,492,325    1,465,364 
                
LIABILITIES               
Current liabilities:               
Accounts payable   86,949    103,382    15,959 
Notes payable   -    4,496    694 
Payables to related parties   4,166    15,697    2,423 
Financial liability, current portion2   1,029,577    -    - 
Short-term loans   -    424,680    65,559 
Salaries and welfare payable   228,127    211,487    32,648 
Income tax payable   117,830    116,340    17,960 
Other taxes payable   34,074    48,188    7,439 
Deferred revenues   225,417    216,123    33,364 
Long-term loans, current portion   -    50,000    7,719 
Other unpaid and accruals   255,460    305,481    47,160 
Other payables   742,853    854,521    131,915 
Deferred tax liability   60,764    46,949    7,248 
                
Total current liabilities   2,785,217    2,397,344    370,088 
                
Long term loans        100,000    15,437 
Deferred rental   705,284    695,008    107,291 
Deferred revenues   51,289    46,349    7,155 
Deposits due to franchisees   144,892    155,402    23,990 
Other long term payables   13,018    5,314    820 
Unfavorable lease liabilities   331,282    294,944    45,532 
Deferred tax liabilities   292,575    287,817    44,431 
                
Total liabilities   4,323,557    3,982,178    614,744 
                
Commitments and contingencies               
                
Shareholders’ equity               
Ordinary shares (US$0.005 par value; 200,000,000 shares authorized, 95,703,960 and 97,535,374 shares issued and outstanding as of December 31, 2014 and December 31, 2015, respectively)   3,698    3,757    580 
                
Additional paid-in capital   3,191,076    3,403,361    525,388 
Statutory reserves   256,013    286,369    44,208 
                
Retained earnings   1,604,246    1,740,929    268,753 
                
Less: Treasury stock (0 and 37,696 shares as of December 31, 2014
and December 31, 2015, respectively)		   -    (2,759)   (426)
                
Total Home Inns shareholders' equity   5,055,033    5,431,657    838,503 
                
Noncontrolling interests   16,106    78,490    12,117 
                
Total  shareholders’ equity   5,071,139    5,510,147    850,620 
                
Total liabilities and shareholders’ equity   9,394,696    9,492,325    1,465,364 

  

Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.4778 on December 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   Year Ended 
   December 31, 2014   September 30, 2015   December 31, 2015    December 31, 2014   December 31, 2015  
   RMB '000   96,238   RMB '000   US$ '000   RMB '000   RMB '000   US$ '000 
                             
Revenues:                                   
Leased-and-operated hotels   1,391,084    1,573,685    1,402,267    216,473    5,741,804    5,631,242    869,314 
Franchised-and-managed hotels   244,219    282,257    275,152    42,476    940,944    1,039,871    160,528 
                                    
Total revenues   1,635,303    1,855,942    1,677,419    258,949    6,682,748    6,671,113    1,029,842 
Less: Business tax and related surcharges   (100,323)   (108,934)   (99,720)   (15,394)   (411,118)   (395,394)   (61,038)
                                    
Net revenues   1,534,980    1,747,008    1,577,699    243,555    6,271,630    6,275,719    968,804 
                                    
Operating costs and expenses:                                   
Leased-and-operated hotel costs –                                   
Rents and utilities   (564,347)   (554,722)   (578,745)   (89,343)   (2,172,804)   (2,239,521)   (345,722)
Personnel costs   (256,033)   (293,685)   (262,696)   (40,553)   (1,075,222)   (1,107,260)   (170,931)
Depreciation and amortization   (187,816)   (200,365)   (202,325)   (31,234)   (742,886)   (792,930)   (122,407)
Consumables, food and beverage   (97,864)   (120,355)   (113,233)   (17,480)   (362,760)   (409,001)   (63,139)
Others   (192,474)   (169,037)   (195,657)   (30,204)   (669,441)   (662,946)   (102,341)
                                    
Total leased-and-operated hotel costs   (1,298,534)   (1,338,164)   (1,352,656)   (208,814)   (5,023,113)   (5,211,658)   (804,540)
                                    
Personnel costs of Franchised-and-managed hotels   (34,280)   (82,570)   (35,670)   (5,506)   (201,244)   (228,219)   (35,231)
Sales and marketing expenses   (22,700)   (25,626)   (41,337)   (6,381)   (109,813)   (115,075)   (17,765)
General and administrative expenses   (77,426)   (82,733)   (122,656)   (18,935)   (312,008)   (362,041)   (55,889)
                                    
Total operating costs and expenses   (1,432,940)   (1,529,093)   (1,552,319)   (239,636)   (5,646,178)   (5,916,993)   (913,425)
                                    
Other income/(loss)   448    (4,165)   (5,529)   (854)   15,193    (7,995)   (1,234)
                                    
Income from operations   102,488    213,750    19,851    3,065    640,645    350,731    54,145 
                                    
Interest income   3,777    6,610    4,243    655    9,295    19,248    2,971 
Interest expenses   (5,674)   (5,303)   (5,850)   (903)   (41,759)   (22,276)   (3,439)
Loss from equity investment   (193)   (163)   (405)   (63)   (324)   (1,587)   (245)
(Loss)/gain on change in fair value of convertible notes   (7,851)   (570)   (7,455)   (1,151)   71,945    (34,624)   (5,345)
Gain/(loss) on buy-back of convertible notes   -    -    -    -    650    (1,682)   (260)
Non-operating income   41,400    44,146    26,914    4,155    81,739    81,651    12,605 
Foreign exchange gain/(loss), net   4,606    (35,012)   (5,876)   (907)   (11,500)   (41,034)   (6,335)
                                    
Income before income tax expenses and noncontrolling interests   138,553    223,458    31,422    4,851    750,691    350,427    54,097 
                                    
Income tax expense   (53,064)   (74,270)   (43,722)   (6,750)   (231,323)   (177,741)   (27,438)
                                    
Net income/(loss)   85,489    149,188    (12,300)   (1,899)   519,368    172,686    26,659 
                                    
Less:Net income attributable to noncontrolling interests   (918)   (3,590)   (750)   (116)   (6,253)   (5,643)   (871)
                                    
Net income/(loss) attributable to ordinary shareholders   84,571    145,598    (13,050)   (2,015)   513,115    167,043    25,788 
                                    
Earnings per share                                   
— Basic   0.88    1.51    (0.14)   (0.02)   5.38    1.74    0.27 
                                    
— Diluted   0.88    1.51    (0.14)   (0.02)   4.55    1.74    0.27 
                                    
Weighted average ordinary shares outstanding                                   
— Basic   95,655    96,347    96,517    96,517    95,345    96,216    96,216 
                                    
— Diluted   95,655    96,347    96,517    96,517    102,814    96,238    96,238 
                                    
Share-based compensation expense was included in the statement of operations as follows:                                   
Leased-and-operated hotel costs – Personnel costs   1,856    1,349    1,763    272    7,702    6,638    1,025 
Personnel costs of Franchised-and-managed hotels   3,479    2,727    3,822    590    13,152    13,423    2,072 
Sales and marketing expenses   179    129    121    19    832    642    99 
General and administrative expenses   15,810    13,684    11,949    1,845    66,020    55,736    8,604 

 

Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.4778 on December 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 December 31, 2015 
   GAAP
Result		   % of Total
Revenue		   Share-based
Compensation		   Expenses related to
going private activities		   Integration
 cost		   % of Total
Revenue		   Non-GAAP
Result		   % of Total
Revenue		 
   RMB '000       RMB '000   RMB '000   RMB '000       RMB '000     
   (unaudited)       (unaudited)   (unaudited)   (unaudited)       (unaudited)     
                                 
Leased-and-operated hotel costs   (1,352,656)   80.6%   1,763    -    1,316    0.2%   (1,349,577)   80.5%
Personnel costs of Franchised-and-managed hotels   (35,670)   2.1%   3,822    -    -    0.2%   (31,848)   1.9%
Sales and marketing expenses   (41,337)   2.5%   121    -    -    0.0%   (41,216)   2.5%
General and administrative expenses   (122,656)   7.3%   11,949    41,907    317    3.2%   (68,483)   4.1%
                                         
Total operating costs and expenses   (1,552,319)   92.5%   17,655    -    1,633    3.6%   (1,491,124)   88.9%
                                         
Income from operations   19,851    1.2%   17,655    -    1,633    3.6%   81,046    4.8%

  

   Quarter Ended December 31, 2015 
   GAAP
Result		   % of Total
Revenue		   Share-based
Compensation		   Expenses related to
going private activities		   Integration
 cost		   % of Total
Revenue		   Non-GAAP
Result		   % of Total
Revenue		 
   US$ '000       US$ '000   US$ '000   US$ '000       US$ '000     
   (unaudited)       (unaudited)   (unaudited)   (unaudited)       (unaudited)     
                                 
Leased-and-operated hotel costs   (208,814)   80.6%   272    -    203    0.2%   (208,339)   80.5%
Personnel costs of Franchised-and-managed hotels   (5,506)   2.1%   590    -    -    0.2%   (4,916)   1.9%
Sales and marketing expenses   (6,381)   2.5%   19    -    -    0.0%   (6,362)   2.5%
General and administrative expenses   (18,935)   7.3%   1,845    6,469    49    3.2%   (10,572)   4.1%
                                         
Total operating costs and expenses   (239,636)   92.5%   2,726    -    252    3.6%   (230,189)   88.9%
                                         
Income from operations   3,065    1.2%   2,726    -    252    3.6%   12,512    4.8%

 

   Quarter Ended September 30, 2015 
   GAAP
Result		   % of Total
Revenue		   Share-based
Compensation		   Expenses related to
going private activities		   Integration
 cost		   %of Total
Revenue		   Non-GAAP
Result		   % of Total
Revenue		 
   RMB '000       RMB '000   RMB '000   RMB '000       RMB '000     
   (unaudited)       (unaudited)   (unaudited)   (unaudited)       (unaudited)     
                                 
Leased-and-operated hotel costs   (1,338,164)   72.1%   1,349    -    1,295    0.1%   (1,335,520)   72.0%
Personnel costs of Franchised-and-managed hotels   (82,570)   4.4%   2,727    -    -    0.1%   (79,843)   4.3%
Sales and marketing expenses   (25,626)   1.4%   129    -    -    0.0%   (25,497)   1.4%
General and administrative expenses   (82,733)   4.5%   13,684    4,797    317    1.0%   (63,935)   3.4%
                                         
Total operating costs and expenses   (1,529,093)   82.4%   17,889    -    1,612    1.3%   (1,504,795)   81.1%
                                         
Income from operations   213,750    11.5%   17,889    -    1,612    1.3%   238,048    12.8%

 

   Quarter Ended December 31, 2014 
   GAAP
Result		   % of Total
Revenue		   Share-based
Compensation		   Expenses related to
going private activities		   Integration
 cost		   % of Total
Revenue		   Non-GAAP
Result		   % of Total
Revenue		 
   RMB '000       RMB '000   RMB '000   RMB '000       RMB '000     
   (unaudited)       (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%

 

Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.4778 on December 31, 2015, representing the certificated exchange rate published by the Federal Reserve Board.

 

 

 

 

Homeinns Hotel Group

Reconciliation of GAAP and Non-GAAP Results (continued)

 

   Year Ended December 31, 2015 
   GAAP
Result		   % of Total
Revenue		   Share-based
Compensation		   Expenses related to
going private activities		   Acquisition
expenses		   Integration
 cost		   % of Total
Revenue		   Non-GAAP
Result		   % of Total
Revenue		 
   RMB '000       RMB '000   RMB '000   RMB '000   RMB '000       RMB '000     
   (unaudited)       (unaudited)   (unaudited)   (unaudited)   (unaudited)       (unaudited)     
                                     
Leased-and-operated hotel costs   (5,211,658)   78.1%   6,638    -    -    5,112    0.2%   (5,199,908)   77.9%
Personnel costs of Franchised-and-managed hotels   (228,219)   3.4%   13,423    -    -    -    0.2%   (214,796)   3.2%
Sales and marketing expenses   (115,075)   1.7%   642    -    -    -    0.0%   (114,433)   1.7%
General and administrative expenses   (362,041)   5.4%   55,736    46,704    -    1,268    1.6%   (258,333)   3.9%
                                              
Total operating costs and expenses   (5,916,993)   88.7%   76,439    46,704    -    6,380    1.9%   (5,787,470)   86.8%
                                              
Income from operations   350,731    5.3%   76,439    46,704    -    6,380    1.9%   480,254    7.2%

 

   Year Ended December 31, 2015 
   GAAP
Result		   % of Total
Revenue		   Share-based
Compensation		   Expenses related to
going private activities		   Acquisition
expenses		   Integration
 cost		   % of Total
Revenue		   Non-GAAP
Result		   % of Total
Revenue		 
   US$ '000       US$ '000   US$ '000   US$ '000   US$ '000       US$ '000     
   (unaudited)       (unaudited)   (unaudited)   (unaudited)   (unaudited)       (unaudited)     
                                     
Leased-and-operated hotel costs   (804,541)   78.1%   1,025    -    -    789    0.2%   (802,727)   77.9%
Personnel costs of Franchised-and-managed hotels   (35,231)   3.4%   2,072    -    -    -    0.2%   (33,159)   3.2%
Sales and marketing expenses   (17,765)   1.7%   99    -    -    -    0.0%   (17,665)   1.7%
General and administrative expenses   (55,889)   5.4%   8,604    7,210    -    196    1.6%   (39,880)   3.9%
                                              
Total operating costs and expenses   (913,426)   88.7%   11,800    7,210    -    985    1.9%   (893,431)   86.8%
                                              
Income from operations   54,144    5.3%   11,800    7,210    -    985    1.9%   74,138    7.2%

 

   Year Ended December 31, 2014 
   GAAP
Result		   % of Total
Revenue		   Share-based
Compensation		   Expenses related to
going private activities		   Acquisition
expenses		   Integration
 cost		   % of Total
Revenue		   Non-GAAP
Result		   % of Total
Revenue		 
   RMB '000       RMB '000   RMB '000   RMB '000   RMB '000       RMB '000     
   (unaudited)       (unaudited)   (unaudited)   (unaudited)   (unaudited)       (unaudited)     
                                     
Leased-and-operated hotel costs   (5,023,113)   75.2%   7,702    -    -    6,017    0.2%   (5,009,394)   75.0%
Personnel costs of Franchised-and-managed hotels   (201,244)   3.0%   13,152    -    -    -    0.2%   (188,092)   2.8%
Sales and marketing expenses   (109,813)   1.6%   832    -    -    -    0.0%   (108,981)   1.6%
General and administrative expenses   (312,008)   4.7%   66,020    -    691    1,268    1.0%   (244,029)   3.7%
                                              
Total operating costs and expenses   (5,646,178)   84.5%   87,706    -    691    7,285    1.4%   (5,550,496)   83.1%
                                              
Income from operations   640,645    9.6%   87,706    -    691    7,285    1.4%   736,327    11.0%

 

Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.4778 on December 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   Year Ended 
   December 31, 2014   September 30, 2015   December 31, 2015   December 31, 2014   December 31, 2015 
   RMB '000   RMB '000   RMB '000   US$ '000   RMB '000   RMB '000   US$ '000 
   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
                             
Net income/(loss) attributable to ordinary shareholders (GAAP)   84,571    145,598    (13,050)   (2,015)   513,115    167,043    25,788 
Foreign exchange (gain)/loss, net   (4,606)   35,012    5,876    907    11,500    41,034    6,335 
Share-based compensation   21,324    17,889    17,655    2,726    87,706    76,439    11,800 
Acquisition expenses   -    -    -    -    691    -    - 
Expenses related to going private activities   -    4,797    41,907    6,469    -    46,704    7,210 
Integration cost   1,795    1,612    1,633    252    7,285    6,380    985 
Gain on waived liability related with Motel acquisition   -                   (11,919)   -    - 
(Gain)/loss on buy-back of convertible notes   -    -    -    -    (650)   1,682    260 
Loss/(gain) on change in fair value of convertible notes   7,851    570    7,455    1,151    (71,945)   34,624    5,345 
                                    
Adjusted net income attributable to ordinary shareholders (Non-GAAP)   110,935    205,478    61,476    9,490    535,783    373,906    57,721 

 

   Quarter Ended   Year Ended 
   December 31, 2014   September 30, 2015   December 31, 2015   December 31, 2014   December 31, 2015 
   RMB '000   RMB '000   RMB '000   US$ '000   RMB '000   RMB '000   US$ '000 
   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
                             
Earnings per share (GAAP)                                   
— Basic   0.88    1.51    (0.14)   (0.02)   5.38    1.74    0.27 
                                    
— Diluted   0.88    1.51    (0.14)   (0.02)   4.55    1.74    0.27 
                                    
Weighted average ordinary shares outstanding                                   
— Basic   95,655    96,347    96,517    96,517    95,345    96,216    96,216 
                                    
— Diluted   95,655    96,347    96,517    96,517    102,814    96,238    96,238 
Adjusted earnings per share (Non-GAAP)                                   
— Basic   1.16    2.13    0.64    0.10    5.62    3.89    0.60 
                                    
— Diluted   1.13    2.05    0.64    0.10    5.43    3.83    0.59 
                                    
Weighted average ordinary shares outstanding                                   
— Basic   95,655    96,347    96,517    96,517    95,345    96,216    96,216 
                                    
— Diluted   102,704    102,702    96,604    96,604    102,814    102,449    102,449 

 

Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.4778 on December 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   Year Ended 
   December 31, 2014   Sept 30, 2015   December 31, 2015   December 31, 2014   December 31, 2015 
   RMB '000   RMB '000   RMB '000   US$ '000   RMB '000   RMB '000   US$ '000 
   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
                             
Net income/(loss)   85,489    149,188    (12,300)   (1,899)   519,368    172,686    26,658 
Interest income   (3,777)   (6,610)   (4,243)   (655)   (9,295)   (19,248)   (2,971)
Interest expenses   5,674    5,303    5,850    903    41,759    22,276    3,439 
Income tax expense   53,064    74,270    43,722    6,750    231,323    177,741    27,438 
Depreciation and amortization   193,863    206,823    206,667    31,904    769,911    815,381    125,873 
                                    
EBITDA (Non-GAAP)   334,313    428,974    239,696    37,003    1,553,066    1,168,836    180,437 
                                    
Foreign exchange loss/(gain), net   (4,606)   35,012    5,876    907    11,500    41,034    6,335 
Share-based compensation   21,324    17,889    17,655    2,726    87,706    76,439    11,800 
Acquisition expenses   -    -    -    -    691    -    - 
Expenses related to going private activities   -    4,797    41,907    6,469    -    46,704    7,210 
Integration cost   1,795    1,612    1,633    252    7,285    6,380    985 
Gain on waived liability related with Motel acquisition   -    -    -    -    (11,919)   -    - 
(Gain)/loss on buy-back of convertible notes   -    -    -    -    (650)   1,682    260 
Loss/(gain) on change in fair value of convertible notes   7,851    570    7,455    1,151    (71,945)   34,624    5,345 
                                    
Adjusted EBITDA (Non-GAAP)   360,677    488,854    314,222    48,508    1,575,734    1,375,699    212,372 
                                    
%of total revenue   22.1%   26.3%   18.7%   18.7%   23.6%   20.6%   20.6%

 

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   As of and for the year ended 
   December 31, 2014   September 30, 2015   December 31, 2015   December 31, 2014   December 31, 2015 
   Group   Group   Group   Group   Group 
Total Hotels in operation:   2,609    2,787    2,922    2,609    2,922 
Leased-and-operated hotels   914    917    929    914    929 
Franchised-and-managed hotels   1,695    1,870    1,993    1,695    1,993 
                          
Total rooms   296,075    311,608    321,802    296,075    321,802 
                          
Occupancy rate (as a percentage)   79.6%   86.6%   83.1%   83.6%   83.2%
                          
Average daily rate (in RMB)   163    171    159    165    162 
                          
RevPAR (in RMB)   130    148    132    138    134 

 

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   As of and for the year ended 
   December 31, 2014   December 31, 2015   December 31, 2014   December 31, 2015 
   Group   Group   Group   Group 
Total Hotels in operation:   1,899    2,257    1,899    2,257 
Leased-and-operated hotels   844    873    844    873 
Franchised-and-managed hotels   1,055    1,384    1,055    1,384 
                     
Total rooms   221,376    255,319    221,376    255,319 
                     
Occupancy rate (as a percentage)   81.3%   84.0%   85.3%   84.5%
                     
Average daily rate (in RMB)   161    157    165    161 
                     
RevPAR (in RMB)   131    132    141    136 

 

“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.