BEIJING, Aug. 26 /Xinhua-PRNewswire/ -- eLong, Inc. (NASDAQ:LONG),
a leading online travel service provider in China, today reported
unaudited financial results for the second quarter ended June 30,
2008. (Logo: http://www.newscom.com/cgi-bin/prnh/20041118/ELONGLOGO
) Highlights -- Total gross revenues increased 10% year-on-year to
RMB86.0 million and net revenues increased 9% year-on-year to
RMB80.8 million. -- Travel revenues before business tax and
surcharges comprised of hotel, air and other travel product and
service revenues increased 8% year-on- year to RMB81.6 million.
Travel revenues before business tax and surcharges by product were
as follows (figures in RMB 000's; some numbers may not add due to
rounding): % % Y/Y Q2 2008 Total Q2 2007 Total Growth Hotel
commissions 63,158 77% 60,162 80% 5% Air ticketing commissions
18,329 22% 13,850 18% 32% Other travel revenue 113 -- 1,400 2% -92%
Total travel revenue 81,600 100% 75,412 100% 8% -- Operating loss
increased year-on-year by RMB5.7 million to RMB7.9 million, driven
primarily by increased revenue offset by greater service
development, and sales and marketing expenses. -- Net loss from
continuing operations increased year-on-year by RMB18.4 million to
RMB20.3 million, driven primarily by a RMB 9.6 million increase in
sales and marketing expenses, a RMB4.5 million increase in foreign
currency exchange losses and a RMB7.3 million decrease in interest
income compared to the prior year quarter, due to the appreciation
of the Renminbi and lower U.S. interest rates. -- Cash and cash
equivalents as of June 30, 2008 were RMB1.07 billion (USD$156.4
million). -- As of Aug 25, 2008, the Company repurchased 801,322
ADS at a cost of USD$6.4million. "We have made significant
improvements to our products and services and now is the time to
invest in brand awareness and begin to aggressively promote our
product offerings," said Guangfu Cui, Chief Executive Officer of
eLong. " We are doing the right things and believe that our hard
work will pay off as we develop our brand and the market rebounds."
"We are building the company for the long-term," said Chris Chan,
Chief Financial Officer of eLong. "We will begin to grow our
marketing expense and use our strong balance sheet to our advantage
while being prudent with our investments." Business Results Hotel
Hotel commissions increased 5% for the second quarter of 2008
primarily due to higher room volume. Room nights booked through
eLong increased 5% to 968,000, while commission per room night of
RMB65.2 was similar to the prior year quarter. Air Air ticketing
commissions increased 32% for the second quarter of 2008, driven by
a 19% increase in air segments to 412,000, and an increase of 81
basis points in the average percent commission to 6.0% or RMB44.5
per air ticket. Profitability Gross margin in the second quarter
was 71% compared to 72% in the prior year period driven by the
growth of lower margin air revenues and higher personnel costs.
Operating expenses for the second quarter of 2008 and 2007 were as
follows (figures in RMB 000's; some numbers may not add due to
rounding): % Net % Net Y/Y Q2 2008 Revenue Q2 2007 Revenue Growth
Service development 13,331 16% 12,257 16% 9% Sales and marketing
38,867 48% 29,313 39% 33% General and administrative 12,994 16%
13,540 18% -4% Amortization of intangibles 217 -- 265 -- -18%
Write-down of property and equipment and intangibles 121 -- 526 1%
-77% Total operating expenses 65,530 81% 55,901 75% 17% Total
operating expenses increased 17% for the second quarter of 2008
compared to the second quarter of 2007. Operating expenses were 81%
of net revenues increasing by 6 percentage points compared to the
second quarter of the prior year. Service development expense is
composed of expenses related to technology and our product
offering, including our website, platforms and other related system
development. Service development expense increased 9% over the
prior year period, mainly driven by increased investment in
platform enhancements. Service development expense as a percentage
of net revenues, remained flat at 16%. Sales and marketing expense
for the second quarter 2008 increased 33% over the prior year
period, mainly driven by higher sales commissions in line with
revenue growth and increased online and offline marketing promotion
expense. The sales and marketing expense increased by 9 percentage
points to 48% of net revenues when compared to the same period last
year. General and administrative expense for the second quarter
2008 decreased 4% over the prior year period. General and
administrative expense as a percentage of net revenues, decreased
by 2 percentage points year-on-year, to 16% in the second quarter.
Other loss, which represents interest income, foreign exchange
losses and other income/expense, was RMB13.1 million in the second
quarter of 2008, primarily due to a foreign currency exchange loss
of RMB19.9 million resulting from the appreciation of Renminbi
during the quarter. This foreign currency exchange loss was
partially offset by interest income of RMB6.8 million in the second
quarter of 2008. Net loss for the second quarter 2008 increased by
RMB18.4 million over the prior year quarter to RMB20.3 million. Our
basic and diluted loss per ADS for the second quarter of 2008 was
RMB0.80 compared to a basic and diluted loss per ADS of RMB0.08 in
the prior year period. Business Outlook eLong expects net revenues,
net of business tax and surcharges, for the third quarter of 2008
to be relatively flat, within the range of RMB75 million to RMB83
million, or -5% to 5% compared to the third quarter of 2007. Notes
to the Unaudited Interim Consolidated Financial Statements To
supplement the financial measures calculated in accordance with
generally accepted accounting principals in the United States, or
GAAP, this press release includes certain non-GAAP financial
measures including basic loss per ADS, diluted loss per ADS,
share-based compensation charges and unrealized foreign exchange
losses. The Company believes these non-GAAP financial measures are
important to help investors understand the Company's current
financial performance and future prospects and compare business
trends among different reporting periods on a consistent basis.
These non-GAAP financial measures should be considered in addition
to financial measures presented in accordance with GAAP, but should
not be considered as a substitute for, or superior to, financial
measures presented in accordance with GAAP. 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 or other disease,
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 continue timely compliance 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, fluctuations in the value of the Chinese currency,
changes in eLong's management team and other key personnel, changes
in third- party distribution partner relationships 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 2007 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 second quarter
2008 earnings on August 27th, 2008, 8:00 AM Beijing local time
(August 26th, 2008, 8 PM ET). The management team will be on the
call to discuss the quarterly 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 the call will be available for one day between
9:30 pm Eastern Time on August 26th, 2008 and 9:30 am Eastern Time
on August 27th, 2008. The toll-free number for U.S. callers is
+1-800 395 9177; the Hong Kong dial in number is +852 2802 5151,
and the dial-in number for international callers is +1 203 369
4612. The pass code for the replay is 713690. 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 80 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.comand/ http://www.elong.net/ . eLong,
Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN
THOUSANDS EXCEPT PER SHARE AMOUNTS) Three Months Ended Jun. 30,
Mar. 31, Jun. 30, Jun. 30, 2007 2008 2008 2008 RMB RMB RMB USD
Revenues: Hotel commissions 60,162 57,234 63,158 9,208 Air
ticketing commissions 13,850 19,632 18,329 2,672 Other travel
revenue 1,400 791 113 17 Travel 75,412 77,657 81,600 11,897 Other
3,019 3,792 4,384 639 Gross revenues 78,431 81,449 85,984 12,536
Business tax and surcharges (4,026) (4,754) (5,170) (754) Net
revenues 74,405 76,695 80,814 11,782 Cost of services (20,701)
(23,703) (23,192) (3,381) Gross profit 53,704 52,992 57,622 8,401
Operating expenses: Service development (12,257) (12,697) (13,331)
(1,944) Sales and marketing (29,313) (28,907) (38,867) (5,666)
General and administrative (13,540) (14,778) (12,994) (1,894)
Amortization of intangibles (265) (217) (217) (32) Write-down of
property and equipment and intangibles (526) -- (121) (18) Total
operating expenses (55,901) (56,599) (65,530) (9,554) Loss from
operations (2,197) (3,607) (7,908) (1,153) Other income(loss)
(1,053) (28,248) (13,067) (1,905) Loss from continuing operations
before income tax expense (3,250) (31,855) (20,975) (3,058) Income
tax benefit (expense) 1,433 (738) 721 105 Loss from continuing
operations (1,817) (32,593) (20,254) (2,953) Discontinued
operations: Income from discontinued operations -- -- -- -- Income
tax expense of discontinued operations -- -- -- -- Total
discontinued operations -- -- -- -- Net loss (1,817) (32,593)
(20,254) (2,953) Basic loss per share (0.04) (0.64) (0.40) (0.058)
Diluted loss per share (0.04) (0.64) (0.40) (0.058) Basic loss per
ADS (0.08) (1.28) (0.80) (0.116) Diluted loss per ADS (0.08) (1.28)
(0.80) (0.116) Shares used in computing basic net loss per share
50,732 50,905 50,568 50,568 Shares used in computing diluted net
loss per share 50,732 50,905 50,568 50,568 Note that 1 ADS = 2
shares Share-based compensation charges included are as follows:
1,760 2,357 1,817 266 Cost of services 29 144 81 12 Service
development 569 974 625 91 Sales and marketing 83 494 292 43
General and administrative 1,079 745 819 120 Un-realized foreign
exchange losses 15,421 37,896 19,913 2,903 Six Months Ended Jun.
30, Jun. 30, Jun. 30, 2007 2008 2008 RMB RMB USD Revenues: Hotel
commissions 109,042 120,392 17,552 Air ticketing commissions 25,900
37,960 5,534 Other travel revenue 3,476 905 132 Travel 138,418
159,257 23,218 Other 5,295 8,176 1,192 Gross revenues 143,713
167,433 24,410 Business tax and surcharges (7,701) (9,923) (1,447)
Net revenues 136,012 157,510 22,963 Cost of services (38,403)
(46,896) (6,837) Gross profit 97,609 110,614 16,126 Operating
expenses: Service development (22,852) (26,028) (3,795) Sales and
marketing (56,331) (67,774) (9,881) General and administrative
(24,728) (27,772) (4,049) Amortization of intangibles (530) (434)
(63) Write-down of property and equipment and intangibles (526)
(121) (18) Total operating expenses (104,967) (122,129) (17,806)
Loss from operations (7,358) (11,515) (1,680) Other income(loss)
3,276 (41,315) (6,023) Loss from continuing operations before
income tax expense (4,082) (52,830) (7,703) Income tax benefit
(expense) 1,380 (17) (2) Loss from continuing operations (2,702)
(52,847) (7,705) Discontinued operations: Income from discontinued
operations 112 -- -- Income tax expense of discontinued operations
(8) -- -- Total discontinued operations 104 -- -- Net loss (2,598)
(52,847) (7,705) Basic loss per share (0.05) (1.04) (0.152) Diluted
loss per share (0.05) (1.04) (0.152) Basic loss per ADS (0.10)
(2.08) (0.304) Diluted loss per ADS (0.10) (2.08) (0.304) Shares
used in computing basic net loss per share 50,709 50,736 50,736
Shares used in computing diluted net loss per share 50,709 50,736
50,736 Note that 1ADS = 2 shares Share-based compensation charges
included are as follows: 4,529 4,172 610 Cost of services 50 224 33
Service development 1,246 1,599 233 Sales and marketing 284 786 115
General and administrative 2,949 1,563 229 Un-realized foreign
exchange losses 25,034 57,808 8,428 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=RMB6.8591 on
June 30, 2008, USD1.00=RMB7.0120 on March 31, 2008 and USD1.00 =
RMB7.6120 on June 30, 2007 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. UNAUDITED CONDENSED CONSOLIDATED SUMMARY BALANCE SHEET
DATA (IN THOUSANDS) Dec. 31, Jun. 30, Jun. 30, 2007 2008 2008 RMB
RMB US$ ASSETS Current assets: Cash, cash equivalents and
short-term investment 1,157,567 1,072,578 156,373 Restricted assets
11,274 -- -- Accounts receivable, net 41,138 50,713 7,394 Due from
related parties 924 -- -- Prepaid expenses and other current assets
15,645 17,915 2,612 Total current assets 1,226,548 1,141,206
166,379 Property and equipment, net 43,962 53,125 7,745 Goodwill
30,000 30,000 4,374 Intangible assets, net 2,192 1,758 256 Other
non-current assets 28,966 30,715 4,478 Total assets 1,331,668
1,256,804 183,232 LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Accounts payable 57,957 58,010 8,457 Income taxes
payable 1,238 2,413 352 Due to related parties 4,529 5,999 875
Accrued expenses and other current liabilities 83,233 85,628 12,483
Total current liabilities 146,957 152,050 22,167 Deferred income
taxes 100 100 15 Total liabilities 147,057 152,150 22,182
Shareholders' equity Ordinary shares 4,208 4,216 615 Treasury Stock
-- (31,795) (4,635) Additional paid-in capital 1,308,047 1,312,724
191,384 Accumulated deficit (127,644) (180,491) (26,314) Total
shareholders' equity 1,184,611 1,104,654 161,050 Total liabilities
and shareholders' equity 1,331,668 1,256,804 183,232
http://www.newscom.com/cgi-bin/prnh/20041118/ELONGLOGO DATASOURCE:
eLong, Inc. CONTACT: Investor Relations of eLong, Inc.,
+86-10-6436-7570, or Web site: http://www.elong.com/
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