eLong, Inc. Announces Intention to Repurchase up to USD $20 Million
of its Stock BEIJING, Feb. 26 /Xinhua-PRNewswire/ -- eLong, Inc.
(NASDAQ:LONG), a leading online travel service provider in China,
today reported unaudited financial results for the fourth quarter
and fiscal year ended December 31, 2007. Highlights - Fourth
Quarter 2007 -- Total net revenues (net of business tax and
surcharges) increased 27% year-on-year to RMB82.9 million. --
Travel revenues before business tax and surcharges comprised of
hotel, air and other travel product and service revenues, increased
26% year- on-year to RMB84.6 million. -- Travel revenues before
business tax and surcharges by product were as follows (figures in
RMB 000's): Q4 % Q4 % Y/Y 2007 Total 2006(1) Total Growth Hotel
commissions 67,345 80% 56,026 84% 20% Air ticketing commissions
15,971 19% 9,593 14% 66% Other travel revenues 1,242 1% 1,452 2%
-14% Total travel revenues 84,558 100% 67,071 100% 26% -- Operating
income improved year-on-year by RMB3.9 million to RMB2.7 million,
driven primarily by increased revenue offset by greater sales and
marketing, service development expenses, and decrease in shared-
based compensation. -- Net loss from continuing operations worsened
year-on-year by RMB11.7 million to RMB12.1 million driven primarily
by a RMB15.3 million increase in unrealized foreign exchange losses
compared to the year- ago quarter caused by the appreciation of the
Renminbi. -- Cash and cash equivalents as of December 31, 2007 were
RMB1.2 billion (USD$159 million). Highlights - Fiscal Year 2007: --
Travel revenues before business tax and surcharges, comprised of
hotel, air and other travel product and service revenues, increased
19% year- on-year to RMB303.8 million. -- Travel revenues before
business tax and surcharges by product were as follows (figures in
RMB 000's): % % Y/Y 2007 Total 2006(1) Total Growth Hotel
commissions 240,803 79% 209,275 82% 15% Air ticketing commissions
57,456 19% 38,288 15% 50% Other travel revenues 5,588 2% 8,398 3%
-33% Total travel revenues 303,847 100% 255,961 100% 19% --
Operating loss decreased year-on-year by RMB2.4 million to RMB14.0
million, driven primarily by revenue increases offset by greater
sales and marketing, service development expenses, and decrease in
share- based compensation. -- Net loss from continuing operations
increased year-on-year by RMB19.7 million to RMB22.2 million,
driven primarily by a RMB33.1 million year- on-year increase in
unrealized foreign exchange losses caused by the appreciation of
the Renminbi, and partially offset by a year-on-year increase in
net interest income of RMB4 million. "The improvement in eLong's
top line performance in Q4 2007 was driven in large by improved
call center service levels, the introduction of '24 by 7' air
ticketing service and introduction of a triple loyalty points offer
to reward customers," said Guangfu Cui, Chief Executive Officer of
eLong. "We recognize however that we have significant work ahead of
us going forward. In the coming six months we will continue our
efforts to improve customer experience by investing in back office
systems, streamlining order fulfilment and launching a major
website upgrade." "I am pleased to announce that the eLong board
has approved a share buy back of up to $20 million USD," continued
Guangfu Cui, Chief Executive Officer of eLong. "In doing so, the
board of directors and management team is expressing its confidence
in the value of eLong and in its long term future." "We are pleased
with the 27% year-on-year top line growth that we achieved in the
fourth quarter, an acceleration over prior periods in 2007," said
Chris Chan, Chief Financial Officer of eLong. "However we remain
unsatisfied with our ongoing operating loss and are focused on
improving the company's financial results over time." Business
Results Hotel Hotel commissions for the fourth quarter of 2007
increased 20% year-on- year primarily due to higher room volume.
Room nights booked through eLong increased 19% to 1,023,000, while
commission per room night was RMB0.7 higher than the prior year
quarter, at RMB66. eLong increased the number of hotels offered by
37% in 2007, bringing the total to more than 4,800 hotels in over
300 cities across China as of December 2007, compared with 3,500 as
of December 2006. Hotel commissions for fiscal 2007 increased 15%
year-on-year primarily due to higher room volume. Room nights
booked through eLong increased 14% to 3,711,000 for fiscal 2007,
while commission per room night was RMB65, up RMB0.5 compared with
the prior year. Air Air ticketing commissions for the fourth
quarter of 2007 increased 66% year-on-year, driven by a 39%
increase in air segments to 373,000, and a 73 basis point increase
in the average percent commission to 5.6% or RMB43 per air ticket.
The quarter also benefited from higher average ticket price, which
went up by 4.5% year-on-year, to RMB769. Air ticketing commissions
for fiscal 2007 increased 50% compared to the prior year period
primarily driven by a 41% increase in air segments to 1,416,000,
and average percent air commission per ticket increased to 5.1% or
RMB41. Profitability Gross margin in the fourth quarter was 72%,
compared with 75% in the prior year period. The primary driver of
gross margin reduction was the mix shift from higher margin hotel
revenues to lower margin air revenues. The remaining margin
reduction was mainly driven by increased call center expenditures
associated with improved customer service levels. Gross margin for
fiscal 2007 was 72%, compared with 75% in fiscal 2006. Gross margin
decreased primarily due to the same factors impacting the fourth
quarter year-on-year margin decline. Operating expenses for the
fourth quarter of 2007 and 2006 were as follows (figures in RMB
000's): Q4 % Net Q4 % Net Y/Y 2007(2) Revenues 2006(1) Revenues
Growth Service development 13,554 16% 10,569 16% 28% Sales and
marketing 33,782 41% 26,555 41% 27% General and administrative
8,731 11% 12,468 19% -30% Amortization of intangibles 265 -- 265 --
-- Write-down of property and equipment and intangibles 513 1% --
-- N/A Total operating expenses 56,845 69% 49,857 76% 14% Operating
expenses for fiscal of 2007 and 2006 were as follows (figures in
RMB 000's): % Net % Net Y/Y 2007(2) Revenues 2006(1) Revenues
Growth Service development 48,603 16% 41,921 17% 16% Sales and
marketing 126,970 43% 99,091 40% 28% General and administrative
51,736 17% 61,536 25% -16% Amortization of intangibles 1,060 --
1,060 -- -- Write-down of property and equipment and intangibles
1,039 0% -- -- N/A Total operating expenses 229,408 76% 203,608 82%
13% The total of service development, sales and marketing, general
and administrative expenses for the fourth quarter 2007 increased
13% year-on-year; total operating expenses increased 14%
year-on-year. The total of service development, sales and
marketing, general and administrative expenses for fiscal 2007
increased 12% compared to fiscal 2006; total operating expenses
increased 13% over the prior year. Service development expense is
composed of expenses related to technology and product offering,
including our website, platforms and other related system
development. The fourth quarter 2007 service development expense
increased 28% over the prior year period, and basically unchanged
at 16% of net revenues. We increased our technology investment in
the fourth quarter, in order to accelerate our booking platform
improvements and online payment capabilities. The fiscal 2007
service development expense increased 16% over fiscal 2006 and
service development expense as a percentage of net revenues
decreased 49 basis points to 16%. Sales and marketing expense for
the fourth quarter 2007 increased 27% over the prior year period,
and was basically unchanged at 41% of net revenues. The increased
expense was due to increased sales commissions in line with revenue
growth. Sales and marketing expense for fiscal 2007 increased 28%
over fiscal 2006, and was 43% of net revenues, compared to 40% in
2006. The increased expense was primarily driven by increased sales
commissions in line with revenue growth, and increased online
marketing effort. General and administrative expense for the fourth
quarter 2007 decreased 30% over the prior year period mainly due to
decrease in incentive and share- based compensation. General and
administrative expense as a percentage of net revenues decreased 8%
points to 11% in the fourth quarter. General and administrative
expense for fiscal 2007 decreased 16% over fiscal 2006, primarily
due to the same factors impacting the fourth quarter. General and
administrative expense as a percentage of net revenues decreased 8%
points to 17% in the 2007. Other expense, which represents interest
income, unrealized exchange gains/losses and other income/expense,
was RMB14.5 million in the fourth quarter of 2007, primarily due to
an unrealized foreign exchange loss of RMB27.2 million resulting
from the appreciation of the Renminbi during the quarter. This
exchange loss was partially offset by interest income of RMB13.2
million in the fourth quarter of 2007. Other expense for the fiscal
2007 was RMB10.2 million, primarily due to an unrealized foreign
exchange loss of RMB65.9 million resulting from the appreciation of
the Renminbi during the year. This exchange loss was partially
offset by interest income of RMB55.5 million for fiscal 2007. Net
loss for the fourth quarter 2007 increased by RMB10.4 million over
the prior year quarter to RMB12.1 million. Net loss for 2007
increased by RMB21.1 million to RMB22.1 million. Our diluted loss
per ADS for the fourth quarter of 2007 was RMB0.48 compared to a
diluted loss per ADS of RMB0.08 in the prior year period. Our
diluted loss per ADS for fiscal 2007 was RMB0.88 compared to a
diluted loss per ADS of RMB0.04 in fiscal 2006. Business Outlook
eLong expects net revenues, that is net of business tax and
surcharges, for the first quarter of 2008 to be within the range of
RMB68.0 million to RMB75.0 million, an increase of 10% to 22% from
the first quarter of 2007. Notes to the Unaudited Interim
Consolidated Financial Statements Financial information in this
press release from eLong's unaudited financial statements was
prepared in accordance with generally accepted accounting
principles in the United States. The accompanying consolidated
financial information of the Company as of and for the year ended
December 31, 2006 have been revised from previously issued
financial statements to correct an error in the accounting for
share-based compensation. The effect of this revision is to
decrease general and administrative expenses by RMB0.14 million,
increase accrued expenses and other current liabilities by RMB1.99
million, and decrease shareholders' equity by RMB2.13 million as
compared to our previously issued financial statements. All
references in the accompanying consolidated financial information
of this press release have been adjusted to reflect this revision.
Note 1 Fiscal 2006 revenue and expenses have been reclassified to
exclude expenses related to discontinued operations. In May 2006,
eLong disposed of Raytime, an operator of hotel loyalty programs.
In October 2006, eLong sold the assets and business of one of its
divisions operating an interactive online dating community (the
"Division"). In accordance with SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets", the results of
operations of Raytime and the Division have been reflected in the
consolidated financial statements as a discontinued operation for
all periods presented. Note 2 From third quarter 2007, business tax
expense and related surcharges have been presented on a net basis
(excluded from revenues). Prior to July 1, 2007, these charges were
included in operating expenses. The Company believes the net
presentation is the appropriate treatment because the revenue
amount after deduction of business tax expense and related
surcharges represents the benefit to be retained by the Company.
Amounts for all prior periods presented have been restated for
comparative purposes. For the impact of this change on prior
periods, please refer to Exhibits 1 and 2. Safe Harbor Statement It
is currently expected that the Business Outlook will not be updated
until the release of eLong's next quarterly earnings announcement;
however, eLong reserves the right to update its Business Outlook at
any time for any reason. Statements in this press release
concerning eLong's future business, operating results and financial
condition are "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.
Words such as "anticipate," "believe," "estimate," "expect,"
"forecast," "intend," "may," "plan," "project," "predict," "should"
and "will" and similar expressions as they related to the Company
are intended to identify such forward-looking statements, but are
not the exclusive means of doing so. These forward looking
statements are based upon management's current views and
expectations with respect to future events and are not a guarantee
of future performance. Furthermore, these statements are, by their
nature, subject to a number of risks and uncertainties that could
cause actual performance and results to differ materially from
those discussed in the forward-looking statements as a result of a
number of factors. Factors that could affect the Company's actual
results and cause actual results to differ materially from those
included in any forward-looking statement include, but are not
limited to, eLong's historical operating losses, its limited
operating history, declines or disruptions in the travel industry,
the recurrence of SARS, an outbreak of bird flu, eLong's reliance
on having good relationships with hotel suppliers and airline
ticket suppliers, our reliance on the Travelsky GDS system for our
air business, the possibility that eLong will be unable to timely
comply with Section 404 of the Sarbanes-Oxley Act of 2002, the risk
that eLong will not be successful in competing against new and
existing competitors, risks associated with Expedia, Inc.'s
(NASDAQ:EXPE) majority ownership interest in eLong and the
integration of eLong's business with that of Expedia's, subsequent
revaluations of the Chinese currency, changes in eLong's management
team and other key personnel and other risks outlined in eLong's
filings with the U.S. Securities and Exchange Commission (or SEC),
including eLong's Form 20-F filed with the SEC in connection with
the Company's fiscal year 2006 results. Readers are cautioned not
to place undue reliance on any forward-looking statements, which
speak only as of their dates. Conference Call eLong will host a
conference call to discuss its fourth quarter and fiscal 2007
earnings on February 26, 2008, at 7:00 p.m. Eastern (Beijing/Hong
Kong time: February 27, 2008 at 8:00 a.m.). The management team
will be on the call to discuss the quarterly and fiscal year
results and to answer questions. The toll-free number for U.S.
participants is +1-800-365-8460. The dial-in number for Hong Kong
participants is +852-2258-4000. International participants can dial
+1-210-795-0492. Pass code: ELONG. A replay of conference call will
be available for one day starting from 8:30 p.m. Eastern Time on
February 26, 2008 and 8:30 a.m. Eastern Time on February 27, 2008.
U.S. toll-free dial-in number: +1-888-485-2367, Hong Kong dial-in
number: +852-2802-5151, international dial-in number:
+1-203-369-4588. The pass code for the replay is 732560.
Additionally, a live and archived web cast of this call will be
available on the Investor Relations section of the eLong web site
at http://ir.elong.net/ for three months. About eLong, Inc. eLong,
Inc. (NASDAQ:LONG) is a leading online travel company in China.
Headquartered in Beijing, eLong has a national presence across
China. eLong uses web-based distribution technologies and a 24-hour
call center to provide consumers with access to travel reservation
services. Aiming to enrich people's lives through the freedom of
independent travel, eLong empowers consumers to make informed
choices by providing a one-stop travel solution and consolidated
travel tools and information such as maps, virtual tours and user
ratings. eLong has the capacity to fulfill air ticket reservations
in over 70 major cities across China. In addition to choice of a
wide hotel selection in the Greater China region, eLong offers
Chinese consumers the ability to make bookings at international
hotels in over 140 destinations worldwide. eLong operates the
websites http://www.elong.com/ and http://www.elong.net/ . eLong,
Inc. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED, IN THOUSANDS
EXCEPT PER SHARE AMOUNTS) IN LOCAL CURRENCY Three Months Ended Year
Ended Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, 2007 2007 2006
2007 2006 RMB RMB RMB RMB RMB Revenues Hotel commissions 67,345
64,417 56,026 240,803 209,275 Air ticketing commissions 15,971
15,585 9,593 57,456 38,288 Other travel revenue 1,242 869 1,452
5,588 8,398 Travel 84,558 80,871 67,071 303,847 255,961 Other 3,264
2,991 2,647 11,550 8,583 Gross revenues 87,822 83,862 69,718
315,397 264,544 Business tax and surcharges (4,969) (4,776) (4,347)
(17,446) (15,067) Net revenues 82,853 79,086 65,371 297,951 249,477
Cost of services (23,288) (20,807) (16,651) (82,498) (62,246) Gross
profit 59,565 58,279 48,720 215,453 187,231 Operating expenses
Service development (13,554) (12,196) (10,569) (48,603) (41,921)
Sales and marketing (33,782) (36,858) (26,555) (126,970) (99,091)
General and administrative (8,731) (18,277) (12,468) (51,736)
(61,536) Amortization of intangibles (265) (265) (265) (1,060)
(1,060) Write-down of property and equipment and intangibles (513)
-- -- (1,039) -- Total operating expenses (56,845) (67,596)
(49,857) (229,408) (203,608) Income/(loss) from operations 2,720
(9,317) (1,137) (13,955) (16,377) Other income/(loss) (14,548)
1,055 2,289 (10,218) 18,403 Income/(loss) from continuing
operations before income tax expense (11,828) (8,262) 1,152
(24,173) 2,026 Income tax benefit/(expense) (243) 861 (1,490) 1,999
(4,475) Income/(loss) from continuing operations (12,071) (7,401)
(338) (22,174) (2,449) Discontinued operations Income from
discontinued operations -- -- (1,332) 112 (1,423) Income tax
benefit/(expense) of discontinued operations -- -- 2 (8) (24) Gain
on sale of discontinued operations -- -- -- -- 2,650 Total
discontinued operations -- -- (1,330) 104 1,203 Net income/(loss)
before cumulative effect of change in accounting principles
(12,071) (7,401) (1,668) (22,070) (1,246) Cumulative effect of
change in accounting principles -- -- -- -- 282 Net income/(loss)
(12,071) (7,401) (1,668) (22,070) (964) Basic income/(loss) per
share Continuing operations (0.24) (0.15) (0.01) (0.44) (0.05)
Discontinued operations 0.00 0.00 (0.03) 0.00 0.02 Cumulative
effect of change in accounting principles 0.00 0.00 0.00 0.00 0.01
Basic income/(loss) per share (0.24) (0.15) (0.04) (0.44) (0.02)
Diluted income/(loss) per share Continuing operations (0.24) (0.15)
(0.01) (0.44) (0.05) Discontinued operations 0.00 0.00 (0.03) 0.00
0.02 Cumulative effect of change in accounting principles 0.00 0.00
0.00 0.00 0.01 Diluted income/(loss) per share (0.24) (0.15) (0.04)
(0.44) (0.02) Basic income/(loss) per ADS Continuing operations
(0.48) (0.30) (0.02) (0.88) (0.10) Discontinued operations 0.00
0.00 (0.06) 0.00 0.04 Cumulative effect of change in accounting
principles 0.00 0.00 0.00 0.00 0.02 Basic income/(loss) per ADS
(0.48) (0.30) (0.08) (0.88) (0.04) Diluted income/(loss) per ADS
Continuing operations (0.48) (0.30) (0.02) (0.88) (0.10)
Discontinued operations 0.00 0.00 (0.06) 0.00 0.04 Cumulative
effect of change in accounting principles 0.00 0.00 0.00 0.00 0.02
Diluted income/(loss) per ADS (0.48) (0.30) (0.08) (0.88) (0.04)
Shares used in computing basic net income/(loss) per share 50,846
50,766 50,464 50,758 50,392 Shares used in computing diluted net
income/(loss) per share 50,846 50,766 50,464 50,758 50,392 Note
that 1ADS = 2 shares Share-based compensation charges included are
as follows: (1,539) 3,012 3,051 6,002 12,221 Cost of services 72 89
(3) 211 135 Service development 838 901 717 2,984 2,760 Sales and
marketing 42 354 126 680 573 General and administrative (2,491)
1,668 2,211 2,127 8,753 Un-realized foreign exchange losses 27,188
13,696 11,899 65,918 32,803 eLong, Inc. CONSOLIDATED STATEMENT OF
OPERATIONS (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS) IN
U.S. DOLLARS Three Months Ended Year Ended Dec. 31, Sept. 30, Dec.
31, Dec. 31, Dec. 31, 2007 2007 2006 2007 2006 US$ US$ US$ US$ US$
Revenues Hotel commissions 9,232 8,597 7,179 33,011 26,816 Air
ticketing commissions 2,189 2,080 1,229 7,877 4,906 Other travel
revenue 170 116 186 766 1,076 Total travel revenue 11,591 10,793
8,594 41,654 32,798 Other 448 399 339 1,583 1,100 Gross revenues
12,039 11,192 8,933 43,237 33,898 Business tax and surcharges (681)
(637) (557) (2,392) (1,931) Net revenues 11,358 10,555 8,376 40,845
31,967 Cost of services (3,192) (2,777) (2,134) (11,309) (7,976)
Gross profit 8,166 7,778 6,242 29,536 23,991 Operating expenses
Service development (1,858) (1,628) (1,354) (6,663) (5,372) Sales
and marketing (4,631) (4,919) (3,403) (17,406) (12,697) General and
administrative (1,199) (2,440) (1,598) (7,093) (7,885) Amortization
of intangibles (36) (35) (34) (145) (136) Write-down of property
and equipment and intangibles (70) -- -- (142) -- Total operating
expenses (7,794) (9,022) (6,389) (31,449) (26,090) Income/(loss)
from operations 373 (1,244) (147) (1,913) (2,099) Other
income/(loss) (1,994) 141 293 (1,400) 2,358 Income/(loss) from
continuing operations before income tax expense (1,621) (1,103) 147
(3,314) 260 Income tax benefit/(expense ) (33) 115 (191) 274 (573)
Income/(loss) from continuing operations (1,655) (988) (44) (3,040)
(313) Discontinued operations Income from discontinued operations
-- -- (171) 15 (183) Income tax benefit/(expense) of discontinued
operations -- -- -- (1) (3) Gain on sale of discontinued operations
-- -- -- -- 340 Total discontinued operations -- -- (171) 14 154
Net income/(loss) before cumulative effect of change in accounting
principles (1,655) (988) (215) (3,026) (159) -- -- -- -- --
Cumulative effect of change in accounting principles -- -- -- -- 36
Net income/(loss) (1,655) (988) (215) (3,026) (123) Basic
income/(loss) per share Continuing operations (0.033) (0.020)
(0.001) (0.060) (0.006) Discontinued operations 0.000 0.000 (0.004)
0.000 0.003 Cumulative effect of change in accounting principles
0.000 0.000 0.000 0.000 0.001 Basic income/(loss) per share (0.033)
(0.020) (0.005) (0.060) (0.002) Diluted income/(loss) per share
Continuing operations (0.033) (0.020) (0.001) (0.060) (0.006)
Discontinued operations 0.000 0.000 (0.004) 0.000 0.003 Cumulative
effect of change in accounting principles 0.000 0.000 0.000 0.000
0.001 Diluted income/(loss) per share (0.033) (0.020) (0.005)
(0.060) (0.002) Basic income/(loss) per ADS Continuing operations
(0.066) (0.040) (0.002) (0.120) (0.012) Discontinued operations
0.000 0.000 (0.008) 0.000 0.006 Cumulative effect of change in
accounting principles 0.000 0.000 0.000 0.000 0.002 Basic
income/(loss) per ADS (0.066) (0.040) (0.010) (0.120) (0.004)
Diluted income/(loss) per ADS Continuing operations (0.066) (0.040)
(0.002) (0.120) (0.012) Discontinued operations 0.000 0.000 (0.008)
0.000 0.006 Cumulative effect of change in accounting principles
0.000 0.000 0.000 0.000 0.002 Diluted income/(loss) per ADS (0.066)
(0.040) (0.010) (0.120) (0.004) Shares used in computing basic net
income/(loss) per share 50,846 50,766 50,464 50,758 50,392 Shares
used in computing diluted net income/ (loss) per share 50,846
50,766 50,464 50,758 50,392 Note that 1ADS = 2 shares Share-based
compensation charges included are as follows: (211) 402 391 823
1,566 Cost of services 10 12 (0) 29 17 Service development 115 120
92 409 354 Sales and marketing 6 47 16 93 73 General and
administrative (342) 223 283 292 1,122 Un-realized foreign exchange
losses 3,727 1,828 1,525 9,037 4,203 Note 1: The conversions of
Renminbi (RMB) into United States dollars (USD) as at the reporting
dates are based on the noon buying rate of USD1.00 = RMB7.2946 on
December 31, 2007, USD1.00 = RMB7.4928 on September 30, 2007 and
USD1.00 = RMB7.8041 on December 31, 2006 in the City of New York
for cable transfers of Renminbi as certified for customs purposes
by the Federal Reserve. No representation is intended to imply that
the RMB amounts could have been, or could be, converted, realized
or settled into U.S. dollars at that rate on the reporting dates.
eLong, Inc. CONSOLIDATED SUMMARY BALANCE SHEET DATA (UNAUDITED, IN
THOUSANDS) Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2007 2006 2007 2006
RMB RMB US$ US$ ASSETS Current assets: Cash and cash equivalents
1,157,567 1,199,323 158,688 153,679 Restricted assets 11,274 --
1,546 -- Accounts receivable, net 41,138 28,237 5,640 3,618 Due
from related parties 924 2,099 127 269 Deferred income taxes, net
4,247 708 582 91 Prepaid expenses and other current assets 14,572
10,384 1,997 1,330 Total current assets 1,229,722 1,240,751 168,580
158,987 Property and equipment, net 43,962 37,809 6,027 4,845
Goodwill 30,000 30,000 4,113 3,844 Intangible assets, net 2,192
3,746 301 480 Deferred income taxes, net 237 982 32 126 Other
non-current assets 28,730 22,029 3,938 2,823 Total assets 1,334,843
1,335,317 182,991 171,105 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Accounts payable 57,688 32,753 7,908 4,197
Income taxes payable 3,169 16,757 434 2,147 Due to related parties
4,529 3,374 621 432 Accrued expenses and other current liabilities
83,224 83,526 11,409 10,703 Total current liabilities 148,610
136,410 20,372 17,479 Other long-term liabilities -- 980 -- 126
Deferred income taxes 100 132 14 17 Total liabilities 148,710
137,522 20,386 17,622 Shareholders' equity Ordinary shares 4,208
4,192 577 537 Additional paid-in capital 1,308,469 1,298,106
179,375 166,337 Accumulated other comprehensive income(loss) --
(29) -- (4) Accumulated deficit (126,544) (104,474) (17,347)
(13,387) Total shareholders' equity 1,186,133 1,197,795 162,605
153,483 Total liabilities and shareholders' equity 1,334,843
1,335,317 182,991 171,105 Exhibit 1 Proforma Business Tax
Presentation Change Effect for 2007 (Unaudited) Year 2007 As
Originally Reported Three months ended Mar. 31, Jun. 30, Sept. 30,
Dec. 31, 2007 2007 2007 2007 RMB('000) RMB('000) RMB('000)
RMB('000) Gross revenues 65,281 78,431 83,862 87,822 Business tax
and surcharges -- -- -- -- Net revenues 65,281 78,431 83,862 87,822
Cost of services (17,701) (20,701) (20,807) (23,288) Gross profit
47,580 57,730 63,055 64,534 Operating expenses Service development
(10,594) (12,257) (12,196) (13,554) Sales and marketing (27,020)
(29,313) (36,858) (33,782) General and administrative (11,188)
(13,540) (18,277) (8,731) Amortization of intangibles (265) (265)
(265) (265) Write-down of property and equipment and intangibles --
(526) -- (513) Business tax and surcharges (3,675) (4,026) (4,776)
(4,969) Total operating expenses (52,742) (59,927) (72,372)
(61,814) Income/(loss) from operations (5,162) (2,197) (9,317)
2,720 Year 2007 As Adjusted * Three months ended Mar. 31, Jun. 30,
Sept. 30, Dec. 31, 2007 2007 2007 2007 RMB('000) RMB('000)
RMB('000) RMB('000) Gross revenues 65,281 78,431 83,862 87,822
Business tax and surcharges (3,675) (4,026) (4,776) (4,969) Net
revenues 61,606 74,405 79,086 82,853 Cost of services (17,701)
(20,701) (20,807) (23,288) Gross profit 43,905 53,704 58,279 59,565
Operating expenses Service development (10,594) (12,257) (12,196)
(13,554) Sales and marketing (27,020) (29,313) (36,858) (33,782)
General and administrative (11,188) (13,540) (18,277) (8,731)
Amortization of intangibles (265) (265) (265) (265) Write-down of
property and equipment and intangibles -- (526) -- (513) Business
tax and surcharges -- -- -- -- Total operating expenses (49,067)
(55,901) (67,596) (56,845) Income/(loss) from operations (5,162)
(2,197) (9,317) 2,720 Year 2007 Effect of Change Three months ended
Mar. 31, Jun. 30, Sept. 30, Dec. 31, 2007 2007 2007 2007 RMB('000)
RMB('000) RMB('000) RMB('000) Gross revenues -- -- -- -- Business
tax and surcharges (3,675) (4,026) (4,776) (4,969) Net revenues
(3,675) (4,026) (4,776) (4,969) Cost of services -- -- -- -- Gross
profit (3,675) (4,026) (4,776) (4,969) Operating expenses Service
development -- -- -- -- Sales and marketing -- -- -- -- General and
administrative -- -- -- -- Amortization of intangibles -- -- -- --
Write-down of property and equipment and intangibles -- -- -- --
Business tax and surcharges 3,675 4,026 4,776 4,969 Total operating
expenses 3,675 4,026 4,776 4,969 Income/(loss) from operations --
-- -- -- Note: Effective from third quarter 2007, business tax
expense and related surcharges have been presented on a net basis
(excluded from revenues). The Company believes the net presentation
is preferable accounting principle because the revenue amount after
deduction of business tax expense and related surcharges represents
the benefit to be retained by the Company. Amounts for all prior
periods presented have been reclassified for comparative purpose.
Exhibit 2 Proforma Business Tax Presentation Change Effect for 2006
(Unaudited) Year 2006 As Originally Reported Three months ended
Mar. 31, Jun. 30, Sept. 30, Dec. 31, 2006 2006 2006 2006 RMB('000)
RMB('000) RMB('000) RMB('000) Gross revenues 53,453 66,793 74,580
69,718 Business tax and surcharges -- -- -- -- Net revenues 53,453
66,793 74,580 69,718 Cost of services (13,173) (15,285) (17,124)
(16,651) Gross profit 40,280 51,508 57,456 53,067 Operating
expenses Service development (10,475) (10,094) (10,718) (10,569)
Sales and marketing (21,849) (25,302) (25,331) (26,555) General and
administrative (20,185) (13,355) (15,376) (12,468) Amortization of
intangibles (265) (265) (265) (265) Business tax and surcharges
(3,013) (3,643) (4,064) (4,347) Total operating expenses (55,787)
(52,659) (55,754) (54,204) Income/(loss) from operations (15,507)
(1,151) 1,702 (1,137) Year 2006 As Adjusted * Three months ended
Mar. 31, Jun. 30, Sept. 30, Dec. 31, 2006 2006 2006 2006 RMB('000)
RMB(\'000) RMB('000) RMB('000) Gross revenues 53,453 66,793 74,580
69,718 Business tax and surcharges (3,013) (3,643) (4,064) (4,347)
Net revenues 50,440 63,150 70,516 65,371 Cost of services (13,173)
(15,285) (17,124) (16,651) Gross profit 37,267 47,865 53,392 48,720
Operating expenses Service development (10,475) (10,094) (10,718)
(10,569) Sales and marketing (21,849) (25,302) (25,331) (26,555)
General and administrative (20,185) (13,355) (15,376) (12,468)
Amortization of intangibles (265) (265) (265) (265) Business tax
and surcharges -- -- -- -- Total operating expenses (52,774)
(49,016) (51,690) (49,857) Income/(loss) from operations (15,507)
(1,151) 1,702 (1,137) Year 2006 Effect of Change Three months ended
Mar. 31, Jun. 30, Sept. 30, Dec. 31, 2006 2006 2006 2006 RMB('000)
RMB('000) RMB('000) RMB('000) Gross revenues -- -- -- -- Business
tax and surcharges (3,013) (3,643) (4,064) (4,347) Net revenues
(3,013) (3,643) (4,064) (4,347) Cost of services -- -- -- -- Gross
profit (3,013) (3,643) (4,064) (4,347) Operating expenses Service
development -- -- -- -- Sales and marketing -- -- -- -- General and
administrative -- -- -- -- Amortization of intangibles -- -- -- --
Business tax and surcharges 3,013 3,643 4,064 4,347 Total operating
expenses 3,013 3,643 4,064 4,347 Income/(loss) from operations --
-- -- -- Note: Effective from third quarter 2007, business tax
expense and related surcharges have been presented on a net basis
(excluded from revenues). The Company believes the net presentation
is preferable accounting principle because the revenue amount after
deduction of business tax expense and related surcharges represents
the benefit to be retained by the Company. Amounts for all prior
periods presented have been reclassified for comparative purpose.
For further information: Investor Relations Email: Tel:
+86-10-6436-7570 DATASOURCE: eLong, Inc. CONTACT: Investor
Relations of eLong, Inc. at +86-10-6436-7570 or Web site:
http://www.elong.com/ http://www.elong.net/
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