EX-99.1 2 v328157_99-1.htm EXHIBIT 99.1

 

Country Style Cooking Restaurant Chain Reports Third Quarter 2012 Financial Results

 

3Q12 Revenues up 12.6% YoY to RMB327.0 Million

3Q12 Net Income up 117.4% YoY to RMB31.9 Million

3Q12 Adjusted Net Income (non-GAAP) up 95.2% YoY to RMB35.6 Million

 

Chongqing, China, November 12, 2012 — Country Style Cooking Restaurant Chain Co., Ltd. (NYSE: CCSC) (“Country Style Cooking” or the “Company”), a fast-growing quick service restaurant chain in China, today announced its unaudited financial results for the third quarter of 2012.

 

Third Quarter 2012 Financial Highlights

 

·Revenues in the third quarter of 2012 were RMB327.0 million ($52.0 million), an increase of 12.6% from RMB290.3 million in the same quarter of 2011.
·Comparable restaurant sales decreased by 5.3% from the same quarter of 2011. There were 146 restaurants in the comparison.
·Restaurant level operating margin was 19.5%, an increase of 110 basis points from the same quarter of 2011.
·Net income for the third quarter of 2012 was RMB31.9 million ($5.1 million), an increase of 117.4% from RMB14.7 million in the same quarter of 2011. Adjusted net income (non-GAAP), which excludes share-based compensation expenses, was RMB35.6 million ($5.7 million), an increase of 95.2% from RMB18.2 million in the same quarter of 2011.
·Diluted net income per American depositary share (“ADS”) was RMB1.22 ($0.19). Adjusted diluted net income per ADS (non-GAAP), which excludes share-based compensation expenses, was RMB1.36 ($0.22). Each ADS represents four ordinary shares of the Company.
·Total number of restaurants increased by a net of 21 in the third quarter of 2012 to 238 restaurants as of September 30, 2012, covering 27 cities and up from 186 restaurants as of September 30, 2011.

 

Ms. Hong Li, chairman and chief executive officer of Country Style Cooking, commented, “We are pleased to report healthy revenue growth and net income increase for the third quarter of 2012. Our operating margin continued to improve and showed both annual and sequential increases in the third quarter. During the period, we accelerated network expansion and added a net of 21 new restaurants. We expect to achieve our annual restaurant growth targets.”

 

Ms. Hong Li continued, “Throughout the third quarter, we carried out a trial run of 15 quick service, canteen-style restaurants under the Chinese brand name ‘Dami Xiansheng’ (which means ‘Mr. Rice’ in English). We located the Mr. Rice restaurants near large office buildings and in industrial parks in Chongqing and three other markets. The trial results have been encouraging, with customers offering positive remarks about the restaurant’s friendly atmosphere and wide range of cuisine options. We believe that the Mr. Rice brand might offer a promising new stream of revenues for the Country Style Cooking restaurant network.”

 

Mr. Adam Zhao, chief financial officer of Country Style Cooking, added, “I am encouraged by the results of our cost control measures and increased operational profitability during the quarter, especially in today’s inflationary environment. During our peak season, we succeeded in building customer traffic in order to create a stronger revenue base going forward. We are happy to have achieved record-high revenue in the third quarter but also want to see greater improvement with same store sales growth. Our efforts to boost same store sales performance include new initiatives covering brand enhancement, mobile-phone apps to facilitate orders and deliveries, and plans for a prepaid card program. ”

 

Third Quarter 2012 Financial Performances

 

Revenues in the third quarter of 2012 increased by 12.6% to RMB327.0 million ($52.0 million) from RMB290.3 million in the same quarter of 2011. Revenue growth was primarily supported by the Company’s expanding restaurant network. During the third quarter of 2012, Country Style Cooking added a net of 21 restaurants, bringing the total restaurant count to 238 as of September 30, 2012, compared to its total restaurant count of 186 as of September 30, 2011. Comparable restaurant sales decreased by 5.3% compared with the same quarter of 2011. There were 146 restaurants in the comparison.

 

 
 

 

Costs of food and paper increased by 10.8% to RMB144.3 million ($23.0 million) in the third quarter of 2012 from RMB130.2 million in the same quarter of 2011, primarily as a result of restaurant expansion and, to a lesser degree, increased food costs. As a percentage of revenues, cost of food and paper decreased to 44.1% in the third quarter of 2012 from 44.9% in the same quarter of 2011. Since the first quarter of 2012, restaurant staff catering and welfare expenses have been reclassified from food and paper and other restaurant operating expense to the category of restaurant wages and related expenses. Prior period numbers have been reclassified accordingly to conform with the current means of data presentation. For details, please refer to note 1 in the Company’s Condensed Consolidated Statements of Income.

 

Restaurant wages and related expenses increased by 13.3% to RMB56.9 million ($9.1 million) in the third quarter of 2012 from RMB50.2 million in the same quarter of 2011. The increase was attributable to increased wage levels. As a percentage of revenues, restaurant wages and related expenses increased slightly to 17.4% in the third quarter of 2012 from 17.3% in the same quarter of 2011.

 

Restaurant rent expenses increased by 17.9% to RMB30.3 million ($4.8 million) in the third quarter of 2012 from RMB25.7 million in the same quarter of 2011. As with other expense categories, the increase was primarily due to the expansion of the Company’s restaurant network. As a percentage of revenues, restaurant rental expenses increased to 9.3% in the third quarter of 2012 from 8.9% in the third quarter of 2011.

 

Restaurant utility expenses increased by 4.4% to RMB19.6 million ($3.1 million) in the third quarter of 2012 from RMB18.8 million in the same quarter of 2011. As a percentage of revenues, restaurant utility expenses were 6.0% in the third quarter of 2012, slightly down from 6.5% in the third quarter of 2011.

 

Other restaurant operating expenses increased by 3.5% to RMB12.2 million ($1.9 million) in the third quarter of 2012 from RMB11.8 million in the same quarter of 2011. As a percentage of revenues, other restaurant operating expenses decreased slightly to 3.7% in the third quarter of 2012 from 4.0% in the third quarter of 2011.

 

Restaurant-level operating margin was 19.5% in the third quarter of 2012, an increase of 110 basis points over the same quarter of 2011. The increase was primarily due to effective cost control measures.

 

Selling, general and administrative (SG&A) expenses remained consistent at RMB17.2 million ($2.7 million) in the third quarter of 2012, compared to RMB17.2 million in the same quarter of 2011, reflecting a combination of offsetting factors including expanded restaurant network, increased spending on administrative staff cost and effective cost control measures. Share-based compensation expenses included in SG&A was RMB2.6 million ($0.4 million) in the third quarter of 2012, compared to RMB2.8 million in the third quarter of 2011. As a percentage of revenues, SG&A expenses were 5.3% in the third quarter of 2012, slightly down from 5.9% in the third quarter of 2011.

 

Pre-opening expense for the third quarter of 2012 was RMB3.2 million ($0.5 million), representing a decrease of 40.2% as compared to RMB5.3 million in the same quarter of 2011, primarily because of tighter cost controls as well as fewer new restaurants opened in the third quarter of 2012. As a percentage of revenues, pre-opening expense decreased to 1.0% in the third quarter of 2012 from 1.8% in the same quarter of 2011.

 

Depreciation expense for the third quarter of 2012 was RMB15.6 million ($2.5 million), representing an increase of 58.2% as compared to RMB9.9 million in the same quarter of 2011, primarily because of the increase in total fixed assets as a result of restaurant network expansion. As a percentage of revenues, depreciation expense increased to 4.8% in the third quarter of 2012 from 3.4% in the same quarter of 2011.

 

Impairment charges were RMB4.0 million ($0.6 million) in the third quarter of 2012, representing costs related to asset impairment with eight underperforming restaurants, two of which the Company plans to close.

 

Income from operations for the third quarter of 2012 was RMB23.6 million ($3.8 million), representing an increase of 16.0% as compared to RMB20.3 million in the same quarter of 2011.

 

 
 

 

 

Interest income for the third quarter of 2012 was RMB5.0 million ($0.8 million), representing a decrease of 11.0% as compared to RMB5.6 million in the same quarter of 2011.

 

Foreign currency exchange gain for the third quarter of 2012 was RMB0.3 million ($44,000), as compared to a loss of RMB4.1 million in the same quarter of 2011.

 

Other income for the third quarter of 2012 was RMB12.7 million ($2.0 million) mainly representing government subsidies received, as compared to RMB4.1 million in the same quarter of 2011.

 

Income tax expense in the third quarter of 2012 was RMB9.7 million ($1.5 million), representing a decrease of 13.7% as compared to RMB11.2 million in the same quarter of 2011. As previously disclosed in the Company’s press release on June 1, 2012, the Company’s subsidiary in Chongqing was granted a preferential tax rate of 15% for the years 2011 to 2020. As a result, the Company’s estimated effective tax rate saw a significant decrease from the same quarter last year.

 

Net income was RMB31.9 million ($5.1 million), representing an increase of 117.4% from RMB14.7 million in the third quarter of 2011. Adjusted net income (non-GAAP), which excludes share-based compensation expenses, was RMB35.6 million ($5.7 million) in the third quarter of 2012, compared to RMB18.2 million in the third quarter of 2011.

 

Diluted net income per ADS in the third quarter of 2012 was RMB1.22 ($0.19), compared to RMB0.56 in the third quarter of 2011. Adjusted diluted net income per ADS (non-GAAP), which excludes share-based compensation expenses, was RMB1.36 ($0.22) in the third quarter of 2012, compared to RMB0.68 in the third quarter of 2011. The Company had approximately 26.2 million weighted average diluted ADSs outstanding during the quarter ended September 30, 2012.

 

EBITDA (non-GAAP), defined as net income before interest, income tax (benefit)/expense, depreciation and amortization, was RMB52.2 million ($8.3 million) in the third quarter of 2012, compared to RMB30.2 million from the same quarter of 2011. Adjusted EBITDA (non-GAAP), defined as EBITDA excluding foreign exchange gain/loss, other income, impairment charges and share-based compensation expenses, was RMB46.9 million ($7.5 million) in the third quarter of 2012, compared to RMB34.6 million in the same quarter of 2011.

 

As of September 30, 2012, the Company had cash, cash equivalents and short-term investments of RMB547.4 million ($87.1 million), compared to RMB517.5 million as of December 31, 2011.

 

Net cash provided by operating activities was RMB145.8 million ($23.2 million) for the nine months ended September 30, 2012, up from RMB68.9 million in the same period of 2011.

 

Outlook

 

For the fourth quarter of 2012, the Company currently estimates that its revenues will be between RMB300 million ($47.7 million) and RMB310million ($49.3million), representing year-over-year growth of between approximately 10% and 14%.

 

For the full year of 2012, the Company expects revenues in the range of RMB1,192 million ($190 million) to RMB1,202 million ($191 million), representing year-over-year growth of between approximately 17% and 18%.

 

These forecasts reflect the Company’s current and preliminary view, which are subject to change.

 

Definitions

 

The following definitions apply to these terms used throughout this release:

 

Comparable restaurants are defined as restaurants that were open throughout the periods under comparison. A restaurant is included in the comparison once it has been in operation for 12 full months before the start of the quarter. Comparable restaurants exclude (i) restaurants whose operational area has increased or decreased by more than 5% during the periods under comparison (ii) restaurants that were closed for more than 5% of total days in any period under comparison and (iii) restaurants that were operated under different business style in the comparison period.

 

 
 

 

Restaurant level operating margin represents total revenue less restaurant operating costs (including food and paper, restaurant wages and related expenses, restaurant rent expenses, restaurant utilities expenses and other restaurant operating expenses), expressed as a percentage of total revenues.

 

Exchange Rate

 

This announcement contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars in this announcement were made at the noon buying rate of RMB6.2848 to US$1.00 on September 28, 2012 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York.

 

Conference Call

 

The Company will host a conference call at 7:30 pm, Eastern Time on November 12, 2012, which is 8:30 am, Beijing Time on November 13, 2012, to discuss third quarter 2012 results and answer questions from investors. Listeners may access the call by dialing:

 

US:  +1-718-354-1231
International:  +65-6723-9381
Hong Kong:  +800-930-346
China Domestic:  +800-819-0121
China Domestic Mobile:  +400-620-8038
    
    
 Passcode:  55766966

 

A live and archived webcast of the conference call will be available at http://ir.csc100.com

 

About Country Style Cooking Restaurant Chain Co., Ltd.

 

Country Style Cooking Restaurant Chain Co., Ltd. (NYSE: CCSC) (“Country Style Cooking”) is a fast-growing quick service restaurant chain in China, offering delicious, everyday Chinese food to customers who desire fast and affordable quality meals. Country Style Cooking directly operates all of its restaurants and is the largest quick service restaurant chain in Chongqing municipality, home to Sichuan cuisine, one of the best-known Chinese regional cuisines. Additional information about Country Style Cooking can be found at http://ir.csc100.com.


Contact:

 

Country Style Cooking Restaurant Chain Co., Ltd.

Adam Zhao

Chief Financial Officer

Phone: +86-23-8866-8866

Email: ir@csc100.com

 

ICR Inc.

Rob Koepp

Phone: +86-10-6583-7516 or +1-646-328-2520

E-mail: robert.koepp@icrinc.com

 

 
 

 

Non-GAAP Disclosure

 

To supplement the unaudited consolidated financial information presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), the Company uses the following measures defined as non-GAAP measures under Regulation G and Item 10(e) of Regulation S-K of SEC: adjusted net income, adjusted diluted earnings per ADS, EBITDA and adjusted EBITDA. 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 GAAP. We define adjusted net income as net income excluding share-based compensation expenses. We define adjusted diluted earnings per ADS as diluted earnings per ADS excluding share-based compensation expenses. We define EBITDA as earnings before interest, income tax expense, depreciation and amortization. We define adjusted EBITDA as EBITDA excluding foreign exchange gain or loss, other income or expense, impairment charges and share-based compensation expenses. For more information on these non-GAAP financial measures, please see the tables captioned “Supplementary Metrics—Reconciliations of GAAP to Non-GAAP Financial Measures” set forth at the end of this release.

 

The Company believes that in conjunction with GAAP financial measures, these non-GAAP financial measures provide meaningful supplemental information regarding its operating performance and liquidity. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to the Company’s historical performance and liquidity. Management uses both GAAP and non-GAAP information in evaluating and operating the business internally and therefore deems it important to provide all of these information to investors. Management also believes that these non-GAAP financial measures facilitate comparisons to the Company’s historical performance.

 

One of the limitations of using adjusted net income, adjusted diluted earnings per ADS, EBITDA and adjusted EBITDA is that they do not include all items that impact the Company’s net income for the relevant periods. A limitation of using these non-GAAP measures is that they exclude certain items including share-based compensation charges that have been and will continue to be for the foreseeable future a significant recurring expense in our business. In addition, the Company's EBITDA and adjusted EBITDA may not be comparable to EBITDA, 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. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

 

Safe Harbor Statement

 

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. Among other things, the outlook for the fourth quarter 2012 and the full year of 2012, quotations from management in this announcement, as well as Country Style Cooking’s strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: uncertainties regarding our ability to open and profitably operate new restaurants and manage our growth effectively and efficiently; risks associated with changing consumer taste and discretionary spending; uncertainties regarding our ability to maintain and enhance the attractiveness of our restaurants and our brand and image; risks related to instances of food-borne illnesses, health epidemics and other outbreaks; uncertainties regarding our ability to respond to competitive pressures; and uncertainties associated with factors typically affecting the consumer food services industry in general. Further information regarding these and other risks is included in the Company’s reports filed with, or furnished to the Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and Country Style Cooking undertakes no duty to update such information, except as required under applicable law.

 

 
 

Condensed Consolidated Balance Sheets

 

(Amounts in thousands, except shares data)

 

(Unaudited)

         
   As of December 31,   As of September 30, 
   2011   2012 
    RMB    RMB    US$ 
ASSETS               
Current assets:               
  Cash and cash equivalents   327,546    337,350    53,677 
  Short-term investments   190,000    210,000    33,414 
  Due from related parties   100    240    38 
  Inventories   48,442    36,539    5,814 
  Prepaid rent   10,674    14,349    2,283 
  Prepaid expenses and other current assets   15,078    18,280    2,909 
  Deferred income taxes-current   3,216    2,071    330 
Total current assets   595,056    618,829    98,465 
Property and equipment, net   298,125    366,395    58,299 
Goodwill   6,019    6,019    958 
Deferred income taxes - non current   4,879    3,957    630 
Deposits for leases   16,695    17,367    2,763 
Total assets   920,774    1,012,567    161,115 
                
Current liabilities:               
  Accounts payable   43,702    51,318    8,165 
  Deferred revenue   4,303    3,667    583 
  Due to related parties   -    21    3 
  Accrued payroll   22,764    24,458    3,892 
  Income taxes payable   17,554    6,092    969 
  Other current liabilities   34,778    41,578    6,619 
Total current liabilities   123,101    127,134    20,231 
Deferred rent - non current   15,610    21,566    3,431 
Prepaid subscription   391    218    35 
Advanced receipts from depositary bank   3,768    3,428    545 
Total liabilities   142,870    152,346    24,242 
                
Equity:               
Ordinary shares ($0.001 par value, 1,000,000,000 shares authorized,
  103,844,239 and 104,317,980 shares issued and outstanding as of
  December 31, 2011 and September 30, 2012, respectively)		   741    744    118 
  Additional paid-in capital   702,995    716,095    113,941 
  Retained earnings   82,432    151,426    24,094 
  Accumulated other comprehensive loss   (8,264)   (8,044)   (1,280)
Total equity   777,904    860,221    136,873 
                
Total liabilities and equity   920,774    1,012,567    161,115 
                

 

 

 
 

 

Condensed Consolidated Statements of Income

 

(Amounts in thousands, except percentages, shares, per share and per ADS data)

 

(Unaudited)

   For the three months ended September 30, 
   2011   2012 
    RMB    %    RMB    %    US$ 
                          
Revenue - restaurant sales   290,289    100.0    327,004    100.0    52,031 
Costs and expenses:                         
  Restaurant expenses:                         
Food and paper1   130,230    44.9    144,347    44.1    22,968 
Restaurant wages and related expenses1, 2   50,204    17.3    56,880    17.4    9,050 
      Restaurant rent expense   25,744    8.9    30,348    9.3    4,829 
      Restaurant utilities expense   18,826    6.5    19,648    6.0    3,126 
Other restaurant operating expenses1   11,775    4.0    12,192    3.7    1,940 
  Selling, general and administrative expenses2   17,172    5.9    17,219    5.3    2,740 
  Pre-opening expenses   5,275    1.8    3,155    1.0    502 
  Depreciation   9,862    3.4    15,598    4.8    2,482 
  Impairment charges   870    0.3    4,038    1.2    643 
Total operating expenses   269,958    93.0    303,425    92.8    48,280 
                          
Income from operations   20,331    7.0    23,579    7.2    3,751 
                          
Interest income   5,595    1.9    4,978    1.5    792 
Foreign exchange gain/(loss)   (4,105)   (1.4)   274    0.1    44 
Other income   4,081    1.4    12,736    3.9    2,026 
Income before income taxes   25,902    8.9    41,567    12.7    6,613 
                          
Income tax expense   11,242    3.9    9,698    3.0    1,543 
Net income   14,660    5.0    31,869    9.7    5,070 
                          
Basic net income per share   0.14         0.31         0.05 
Diluted net income per share   0.14         0.30         0.05 
Basic net income per ADS   0.56         1.22         0.19 
Diluted net income per ADS   0.56         1.22         0.19 
Basic weighted average ordinary shares outstanding   103,640,620         104,290,645         104,290,645 
Diluted weighted average ordinary shares outstanding   105,462,012         104,677,531         104,677,531 

 

 

 

1  Since the first quarter of 2012, restaurant staff catering and welfare expenses have been reclassified from food and paper and other restaurant operating expense to the category of restaurant wages and related expenses. Prior period numbers have been reclassified accordingly to conform with the current presentation.

2  Includes share-based compensation expenses of RMB3.6 million and RMB3.7million ($0.6 million) for the three months ended September 30, 2011 and 2012, respectively.

 

 

 

 
 

 

Condensed Statements of Consolidated Comprehensive Income

 

(Amounts in thousands)

 

(Unaudited)

     
   For the three months ended September 30, 
   2011   2012 
    RMB    RMB    US$ 
                
Net income   14,660    31,869    5,070 
Other comprehensive income/(loss), net of tax:               
      Foreign currency translation adjustments   (417)   89    14 
Comprehensive income   14,243    31,958    5,084 

 

 

 
 

 

Condensed Consolidated Cash Flow Statements

 

(Amounts in thousands)

 

(Unaudited)

   For the nine months ended September 30, 
   2011   2012 
    RMB    RMB    US$ 
Operating activities:               
  Net income   11,980    68,994    10,978 
  Adjustments to reconcile net income to net cash provided from operating activities:               
     Loss on disposals of property and equipment   741    2,145    341 
     Impairment charges   5,646    7,989    1,271 
     Depreciation   26,179    43,381    6,903 
Deferred income taxes   -    2,067    329 
Change in fair value of forward contracts   (310)   -    - 
     Share based compensation expenses   10,541    12,405    1,974 
  Changes in operating assets and liabilities:               
     Due from related parties   (80)   (140)   (22)
     Inventories   (21,950)   11,903    1,894 
     Prepaid rent   (2,382)   (3,675)   (585)
     Prepaid expense and other current assets   (1,489)   (3,202)   (509)
     Deposits for leases   (4,850)   (672)   (107)
     Accounts payable   12,759    7,616    1,212 
     Deferred revenue   579    (636)   (101)
     Due to related parties   (560)   21    3 
     Accrued payroll   7,889    1,694    270 
     Income taxes payable   14,865    (11,462)   (1,824)
     Deferred rent   4,655    6,213    989 
     Other liabilities   4,727    1,155    182 
Net cash provided by operating activities   68,940    145,796    23,198 
Investing activities:               
  Restaurant and office space capital expenditures   (110,121)   (117,221)   (18,652)
  Proceeds from disposal   811    496    79 
Purchase of short-term investment   (210,000)   (210,000)   (33,414)
  Proceeds from short-term investment   -    190,000    30,232 
Net cash used in investing activities   (319,310)   (136,725)   (21,755)
Financing activities:               
     Proceeds from exercise of employee stock options   2,500    500    80 
Offering expenses   (838)   -    - 
Net cash provided by financing activities:   1,662    500    80 
Effect of exchange rate   (1,345)   233    37 
Net increase /(decrease) in cash and cash equivalents   (250,053)   9,804    1,560 
Cash and cash equivalents, beginning of period   612,583    327,546    52,117 
Cash and cash equivalents, end of period   362,530    337,350    53,677 

 

 

 
 

 

Supplementary Metrics – Reconciliations of GAAP to Non-GAAP Financial Measures

 

 

(Amounts in thousands, except ADSs and per ADS data)

   Three months ended September 30, 
   2011   2012 
    RMB    RMB    US$ 
                
Net income   14,660    31,869    5,070 
Share-based compensation expenses:               
Restaurant wages and related expenses   756    1,114    177 
Selling, general and administrative expenses   2,806    2,591    412 
Adjusted net income (non-GAAP)   18,222    35,574    5,659 
                
Diluted net income per ADS   0.56    1.22    0.19 
Adjusted diluted net income per ADS (non-GAAP)   0.68    1.36    0.22 
Diluted weighted average ADSs outstanding   26,365,503    26,169,383    26,169,383 
                
                
    Three months ended September 30, 
    2011    2012      
    RMB    RMB    US$ 
                
Net income   14,660    31,869    5,070 
Income tax expense   11,242    9,698    1,543 
Interest income   (5,595)   (4,978)   (792)
Depreciation and amortization   9,862    15,598    2,482 
EBITDA (Non-GAAP)   30,169    52,187    8,303 
                
EBITDA (Non-GAAP)   30,169    52,187    8,303 
Foreign exchange (gain)/loss   4,105    (274)   (44)
Other income   (4,081)   (12,736)   (2,026)
Impairment charges   870    4,038    643 
Share-based compensation expenses               
Restaurant wages and related expenses   756    1,114    177 
Selling, general and administrative expenses   2,806    2,591    412 
Adjusted EBITDA (Non-GAAP)   34,625    46,920    7,465