BEIJING, May 16, 2011 /PRNewswire-Asia/ -- eLong, Inc.
(Nasdaq: LONG), a leading online travel service provider in
China, today reported unaudited
financial results for the first quarter ended March 31, 2011.
(Logo: http://photos.prnewswire.com/prnh/20041118/ELONGLOGO
)
Highlights - First Quarter 2011
- Net revenues for the first quarter increased 23% to
RMB124.5 million (US$19.0 million), compared to RMB101.1 million (US$14.8
million) in the first quarter of 2010.
- Income from operations for the first quarter increased
111% to RMB13.2 million (US$2.0 million), compared to RMB6.3 million (US$0.9
million) in the prior year period. Operating margin was
10.6% compared to 6.2% in the first quarter of 2010.
- Net income for the first quarter increased 30% to
RMB7.7 million (US$1.2 million), compared to RMB5.9 million (US$0.9
million) in the first quarter of 2010.
- Hotel room nights booked through eLong in the first
quarter increased 41% to 1.7 million room nights
compared to 1.2 million in the prior year period.
- Domestic hotel coverage network expanded 71% to 19,200
domestic hotels as of March 31,
2011, compared to 11,200 as of March
31, 2010. In addition, eLong offers more than 135,000
international hotels through our direct connection with
Expedia.
- Released second generation eLong iPhone application,
currently ranked in Top 10 travel downloads in China's iTunes App
Store.
- On May 16, 2011,
Tencent Holding Limited
(SEHK 00700), made a strategic
investment in eLong, acquiring approximately 11 million
newly-issued shares for US$84
million. On the same day, Expedia, our controlling
shareholder, purchased 5.4 million newly-issued shares for
US$41 million. eLong intends to use
the proceeds from the sale of the newly-issued shares for
acquisitions, business development, working capital and other
general company purposes.
"In the first quarter, eLong accelerated the growth of its core
online hotel business. We were pleased to see nearly half of our
customers now choosing to book hotel online. We expect our hotel
online bookings will for the first time exceed our call center
bookings in the second quarter. This is a great milestone for both
eLong's online hotel booking strategy and China's online travel industry! We also
continued to drive product innovation with our next generation
iPhone application which is currently in the Top 10 travel
downloads in China's iTunes
App Store," said Guangfu Cui, Chief Executive Officer of
eLong.
Business Results
Revenues
Total revenues by product for the first quarter of 2011 and the
same period in 2010 were as follows (in RMB million):
|
|
|
|
Q1
2011
|
|
%
|
|
Q1
2010
|
|
%
|
|
Y/Y
|
|
Total
|
Total
|
Growth
|
|
Hotel reservations
|
|
90.6
|
|
68%
|
|
69.2
|
|
64%
|
|
31%
|
|
Air ticketing
|
30.2
|
|
23%
|
|
29.4
|
|
28%
|
|
2%
|
|
Other
|
|
12.4
|
|
9%
|
|
8.9
|
|
8%
|
|
39%
|
|
Total revenues
|
|
133.2
|
|
100%
|
|
107.5
|
|
100%
|
|
24%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Hotel commission revenue increased 31% for the first quarter of
2011 compared to the prior year quarter, primarily due to higher
volume, partially offset by lower commission per room night.
Commission per room night decreased 7% year-on-year, primarily due
to the more rapid growth of lower average daily rate budget hotels.
Room nights booked through eLong in the first quarter increased 41%
year-on-year to 1.7 million. Hotel commission revenue grew to 68%
of total revenues from 64% in the prior year quarter.
Air
Air ticketing commission revenue increased 2% for the first
quarter of 2011 compared to the prior year quarter, driven by a 14%
increase in commission per segment, partially offset by a 10%
decrease in air segments to 587,000. Commission per segment
increased due to a mix shift to international tickets, an 11%
increase in average ticket price and a 3% increase in air
commission rates compared to the same quarter of the prior
year.
Other
Other revenue is primarily derived from website advertising,
travel insurance and packages. Other revenue increased 39%
year-on-year for the first quarter of 2011, mainly driven by
increased advertising revenues. Other revenue grew to 9% of total
revenues from 8% in the prior year quarter.
Profitability
Gross margin in the first quarter of 2011 was 73%, compared to
69% in the first quarter 2010, mainly due to the faster rate of
growth of our hotel business as compared to our air business, an
increased proportion of online bookings and improved air commission
per segment.
Operating expenses for the first quarter of 2011 and the same
period in 2010 were as follows (in RMB million):
|
|
|
|
Q1
2011
|
|
% of
Net
Revenue
|
|
Q1
2010
|
|
% of
Net
Revenue
|
|
Y/Y
Growth
|
|
Service development
|
|
20.6
|
|
17%
|
|
18.2
|
|
18%
|
|
13%
|
|
Sales and marketing
|
|
43.6
|
|
35%
|
|
33.5
|
|
33%
|
|
30%
|
|
General and
administrative
|
|
13.0
|
|
10%
|
|
11.1
|
|
11%
|
|
16%
|
|
Amortization of intangible
assets
|
0.1
|
|
-
|
|
0.2
|
|
-
|
|
N/M
|
|
Total operating
expenses
|
|
77.3
|
|
62%
|
|
63.0
|
|
62%
|
|
23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses increased 23% for the first quarter of
2011 compared to the first quarter of 2010. Total operating
expenses were 62% of net revenues, which was the same as the prior
year quarter.
Service development expense consists of expenses related to
technology and our product offering, including our websites,
platforms, other system development, as well as our supplier
relations function. Service development expense increased 13%
compared to the prior year quarter, mainly driven by an increase in
headcount. Service development expense decreased to 17% of net
revenues in the first quarter of 2011 from 18% in the same quarter
of the prior year.
Sales and marketing expenses for the first quarter of 2011
increased 30% over the prior year quarter, mainly driven by
increased online marketing expenses, loyalty point promotion
expenses and hotel commission payments to third-party distribution
partners, partially offset by reduced headcount. Sales and
marketing expense increased to 35% of net revenues in the first
quarter of 2011 from 33% in the same quarter of the prior year.
General and administrative expenses for the first quarter of
2011 increased 16% compared to the prior year quarter, mainly
driven by higher share-based compensation charges and bad debt
provisions. General and administrative expenses decreased to 10% of
net revenues in the first quarter of 2011 from 11% in the same
quarter of the prior year.
Other Income/(Expenses) represents interest income, foreign
exchange losses and other income/expense. Other Expenses were
RMB2.7 million in the first quarter
of 2011 compared to Other Income of RMB1.8
million in the first quarter of 2010, driven primarily by
increased other expense recognized on changes in the fair value of
contingent consideration arrangement and increased foreign exchange
losses, which were partially offset by an increase in interest
income. Due to the appreciation of the Renminbi against the US
dollar, foreign exchange losses on our cash and cash equivalents
and short-term investments increased to RMB3.1 million in the first quarter of 2011, from
RMB0.2 million in the first quarter
of 2010. Due to increased interest yield from higher interest rates
and longer duration deposits, interest income in the first quarter
of 2011 increased to RMB4.6 million,
compared to RMB1.1 million in the
first quarter of 2010.
As of March 31, 2011, eLong held
cash and cash equivalents, short-term investments and restricted
cash of RMB1,018 million
(US$155 million), of which 73% was
held in Renminbi and 27% was held in US dollars, compared to 24%
held in Renminbi and 76% held in US dollars as of March 31, 2010.
Net income for the first quarter of 2011 was RMB7.7 million, compared to net income of
RMB5.9 million during the prior year
quarter.
Net income per ADS and diluted net income per ADS for the first
quarter of 2011 were RMB0.32
(US$0.04) and RMB0.30 (US$0.04)
respectively, compared to net income per ADS and diluted net income
per ADS for the prior year quarter of RMB0.26 (US$0.04)
and RMB0.24 (US$0.04) respectively.
Business Outlook
eLong currently expects net revenues for the second quarter of
2011 to be within the range of RMB137
million to RMB149 million, equal to an increase of 15% to
25% compared to the second quarter of 2010.
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, 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 relate to our 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 our actual
performance and results to differ materially from those discussed
in the forward-looking statements. Factors that could affect our
actual results and cause our actual results to differ materially
from those referred in any forward-looking statement include, but
are not limited to, declines or disruptions in the travel industry,
the international financial crisis, slowdown in the PRC economy, an
outbreak of bird flu, H1N1 flu, SARS or other disease, eLong's
reliance on having good relationships with airlines, 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
or other requirements of the Sarbanes-Oxley Act, 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, fluctuations in the value of
the Renminbi, changes in eLong's management team and other key
personnel, changes in third-party distribution partner
relationships and other risks mentioned in eLong's filings with the
US Securities and Exchange Commission, including eLong's Annual
Report on Form 20-F.
Investors should not rely upon forward-looking statements as
predictions of future events. Except as required by law, we
undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. All forward-looking statements
contained in this press release are qualified by reference to this
cautionary statement.
Conference Call
eLong will host a conference call to discuss its first quarter
2011 unaudited financial results on May 17,
2011 at 8:00 am Beijing time (May 16,
2011, 8:00 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 +1-866-844-9413. The dial-in number for
Hong Kong participants is
+852-3001-3802. International participants can dial
+1-210-795-0512. Pass code: eLong.
Additionally, an archived web cast of this call will be
available on the Investor Relations section of the eLong web site
at http://www.elong.net/AboutUs/conference.html for one year.
About eLong, Inc.
eLong, Inc. (NASDAQ: LONG - News) is a leading online travel
service provider in China.
Headquartered in Beijing, eLong
empowers consumers to make informed travel decisions by providing
convenient online, 24-hour call center and mobile phone hotel, air
ticket and vacation package booking services as well as easy to use
tools such as maps, destination guides, photographs, virtual tours
and user reviews. eLong offers consumers the largest hotel product
portfolio with a selection of more than 19,200 hotels in around 700
cities across China and 135,000
international hotels in more than 100 countries worldwide, and the
ability to fulfill domestic and international air ticket
reservations in over 80 major cities across China. eLong is a subsidiary of Expedia, Inc.
(NASDAQ:EXPE).
eLong operates websites including http://www.elong.com,
http://www.elong.net and http://www.xici.net.
For further information, please
contact:
|
|
eLong, Inc.
|
|
Investor Relations
|
|
ir@corp.elong.com
|
|
+86-10-6436-7570
|
|
|
|
|
eLong, Inc.
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
(IN
THOUSANDS EXCEPT PER SHARE AND PER ADS AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Mar. 31,
2010
|
Dec. 31,
2010
|
Mar. 31,
2011
|
Mar. 31,
2011
|
|
|
|
RMB
|
RMB
|
RMB
|
USD(1)
|
|
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
Revenues:
|
|
|
|
|
|
|
Hotel
reservations
|
|
69,167
|
91,241
|
90,634
|
13,841
|
|
Air ticketing
|
|
29,430
|
30,083
|
30,159
|
4,605
|
|
Other
|
|
8,915
|
10,491
|
12,374
|
1,890
|
|
Total revenues
|
|
107,512
|
131,815
|
133,167
|
20,336
|
|
Business tax and
surcharges
|
|
(6,408)
|
(7,686)
|
(8,634)
|
(1,318)
|
|
Net revenues
|
|
101,104
|
124,129
|
124,533
|
19,018
|
|
Cost of
services
|
|
(31,827)
|
(34,850)
|
(34,024)
|
(5,196)
|
|
Gross profit
|
|
69,277
|
89,279
|
90,509
|
13,822
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Service
development
|
|
(18,159)
|
(21,802)
|
(20,541)
|
(3,137)
|
|
Sales and
marketing
|
|
(33,530)
|
(40,741)
|
(43,637)
|
(6,664)
|
|
General and
administrative
|
|
(11,146)
|
(14,209)
|
(12,968)
|
(1,980)
|
|
Amortization of intangible
assets
|
(185)
|
101
|
(137)
|
(21)
|
|
Total operating
expenses
|
|
(63,020)
|
(76,651)
|
(77,283)
|
(11,802)
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
6,257
|
12,628
|
13,226
|
2,020
|
|
|
|
|
|
|
|
|
Other
income/(expenses):
|
|
|
|
|
|
|
Interest income
|
|
1,067
|
2,757
|
4,591
|
701
|
|
Foreign exchange
losses
|
|
(220)
|
(12,412)
|
(3,131)
|
(478)
|
|
Other
|
|
910
|
(522)
|
(4,176)
|
(638)
|
|
Total other income,
net
|
|
1,757
|
(10,177)
|
(2,716)
|
(415)
|
|
|
|
|
|
|
|
|
Income before income tax
expense
|
|
8,014
|
2,451
|
10,510
|
1,605
|
|
Income tax
(expense)/benefit
|
|
(2,079)
|
1,735
|
(2,786)
|
(426)
|
|
Equity in net loss
of affiliate
|
-
|
-
|
(16)
|
(2)
|
|
Net income
|
|
5,935
|
4,186
|
7,710
|
1,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share
|
|
0.13
|
0.09
|
0.16
|
0.02
|
|
Diluted net income per
share
|
|
0.12
|
0.08
|
0.15
|
0.02
|
|
|
|
|
|
|
|
|
Net income per
ADS(2)(3)
|
|
0.26
|
0.18
|
0.32
|
0.04
|
|
Diluted net income per
ADS(2)(3)
|
0.24
|
0.16
|
0.30
|
0.04
|
|
|
|
|
|
|
|
|
Shares used in computing net
income per share:
|
|
|
|
|
Basic
|
|
47,388
|
49,158
|
49,384
|
49,384
|
|
Diluted
|
|
50,870
|
52,463
|
52,105
|
52,105
|
|
|
|
|
|
|
|
|
Share-based compensation charges
included in:
|
|
4,130
|
5,398
|
4,781
|
730
|
|
Cost of
services
|
|
303
|
301
|
260
|
40
|
|
Service
development
|
|
1,470
|
1,855
|
1,424
|
217
|
|
Sales and
marketing
|
|
825
|
824
|
719
|
110
|
|
General and
administrative
|
|
1,532
|
2,418
|
2,378
|
363
|
|
|
|
|
|
|
|
|
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=RMB6.5483 on
March 31, 2011 in the City of New York for cable transfers of
Renminbi as certified for customs purposes by the Federal Reserve.
No representation is made that the RMB amounts could have been, or
could be, converted or settled into USD at the rates stated herein
on the reporting dates, at any other rates or at all.
|
|
|
|
|
|
Note 2: 1 ADS = 2
shares.
|
|
Note 3: Non-GAAP financial
measures
|
|
|
|
|
|
|
|
|
|
|
|
eLong, Inc.
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
(IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31,
2010
|
|
Mar. 31,
2011
|
|
Mar. 31,
2011
|
|
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
381,426
|
|
346,134
|
|
52,859
|
|
Short-term
investments
|
|
580,005
|
|
610,551
|
|
93,238
|
|
Restricted cash
|
|
60,600
|
|
61,400
|
|
9,376
|
|
Accounts receivable,
net
|
|
58,891
|
|
72,222
|
|
11,029
|
|
Due from related
parties
|
|
1,240
|
|
2,021
|
|
309
|
|
Prepaid
expenses
|
|
11,429
|
|
6,848
|
|
1,046
|
|
Other current
assets
|
|
24,210
|
|
31,742
|
|
4,847
|
|
Total
current assets
|
|
1,117,801
|
|
1,130,918
|
|
172,704
|
|
Property and equipment,
net
|
|
41,896
|
|
40,793
|
|
6,230
|
|
Investment in equity
affiliate
|
|
12,680
|
|
12,664
|
|
1,934
|
|
Goodwill
|
|
61,061
|
|
61,061
|
|
9,325
|
|
Intangible assets,
net
|
|
5,855
|
|
5,719
|
|
873
|
|
Other non-current
assets
|
|
29,904
|
|
29,867
|
|
4,561
|
|
Total
assets
|
|
1,269,197
|
|
1,281,022
|
|
195,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
54,364
|
|
60,933
|
|
9,305
|
|
Income taxes
payable
|
|
5,002
|
|
5,550
|
|
848
|
|
Due to related
parties
|
|
1,872
|
|
4,136
|
|
632
|
|
Deferred
revenue
|
|
14,478
|
|
7,301
|
|
1,115
|
|
Accrued expenses and other
current liabilities
|
|
97,183
|
|
93,186
|
|
14,230
|
|
Total
current liabilities
|
|
172,899
|
|
171,106
|
|
26,130
|
|
Other liabilities
|
|
1,430
|
|
2,430
|
|
371
|
|
Total
liabilities
|
|
174,329
|
|
173,536
|
|
26,501
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
Ordinary shares
|
|
1,991
|
|
1,992
|
|
304
|
|
High-vote ordinary
shares
|
|
2,363
|
|
2,363
|
|
361
|
|
Treasury stock
|
|
(96,153)
|
|
(91,460)
|
|
(13,967)
|
|
Additional paid-in
capital
|
|
1,352,427
|
|
1,357,117
|
|
207,247
|
|
Accumulated
deficit
|
|
(165,760)
|
|
(162,526)
|
|
(24,819)
|
|
Total
shareholders' equity
|
|
1,094,868
|
|
1,107,486
|
|
169,126
|
|
Total
liabilities and shareholders'
equity
|
|
1,269,197
|
|
1,281,022
|
|
195,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eLong, Inc.
|
|
TRENDED OPERATIONAL
METRICS
|
|
(IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The metrics below are intended
as a supplement to the financial statements found in this press
release and in our filings with the SEC. In the event of
discrepancies between amounts in these tables and our historical
financial statements, readers should rely on our filings with the
SEC and financial statements in our most recent press
release.
|
|
We intend to periodically review
and refine the definition, methodology and appropriateness of each
of our supplemental metrics. As a result, metrics are subject to
removal and/or change, and such changes could be
material.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
(Unaudited)
|
|
2011
(Unaudited)
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
2010
|
|
Q1
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OIBA
|
10,319
|
|
20,769
|
|
16,196
|
|
17,403
|
|
64,687
|
|
13,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Reservations
|
|
|
|
|
|
|
|
|
|
|
|
|
Room Nights
|
1,206
|
|
1,549
|
|
1,898
|
|
1,725
|
|
6,378
|
|
1,700
|
|
Room Night Y/Y
|
32%
|
|
58%
|
|
60%
|
|
39%
|
|
49%
|
|
41%
|
|
Average Daily Rate
Y/Y
|
(2%)
|
|
5%
|
|
7%
|
|
4%
|
|
4%
|
|
(1%)
|
|
Commission/Room Night
Y/Y
|
(7%)
|
|
(9%)
|
|
(9%)
|
|
(10%)
|
|
(9%)
|
|
(7%)
|
|
Hotel Commissions Y/Y
|
23%
|
|
44%
|
|
46%
|
|
25%
|
|
35%
|
|
31%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Air Ticketing
|
|
|
|
|
|
|
|
|
|
|
|
|
Air Segments
|
653
|
|
591
|
|
629
|
|
568
|
|
2,441
|
|
587
|
|
Air Segments Y/Y
|
29%
|
|
16%
|
|
4%
|
|
(3%)
|
|
11%
|
|
(10%)
|
|
Average Ticket Price
Y/Y
|
8%
|
|
25%
|
|
21%
|
|
16%
|
|
17%
|
|
11%
|
|
Commission/Segment
Y/Y
|
7%
|
|
21%
|
|
26%
|
|
12%
|
|
16%
|
|
14%
|
|
Air Commissions Y/Y
|
38%
|
|
40%
|
|
31%
|
|
8%
|
|
28%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
To supplement the financial measures calculated in accordance
with generally accepted accounting principles in the United States, or GAAP, this press release
includes certain non-GAAP financial measures including net income
per ADS, diluted net income per ADS, Operating Income Before
Amortization ("OIBA"), Adjusted Earnings Before Interests, Taxes,
Depreciation and Amortization ("Adjusted EBITDA"), Adjusted Net
Income ("ANI") and Adjusted Net Income Per Share. We believe these
non-GAAP financial measures may help investors understand eLong's
current financial performance and compare business trends among
different reporting periods. 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. We seek to compensate for the limitations of the
non-GAAP measures presented by also providing the comparable GAAP
measures, GAAP financial statements, and descriptions of the
reconciling items and adjustments, to derive the non-GAAP measures.
Operating Income Before Amortization
("OIBA") is defined as income from
operations plus: (1) share-based compensation charges; (2)
acquisition-related impacts, including (i) amortization of
intangible assets and impairment of goodwill and intangible assets,
and (ii) gains or losses recognized on changes in the fair value of
contingent consideration arrangements; and (3) certain items,
including restructuring charges. We exclude the items listed above
from OIBA because we believe doing so may provide investors greater
insight into management decision making at eLong. We believe OIBA
is useful to investors because it is one of the primary internal
metrics by which management evaluates the performance of our
business as a whole and our individual business segments, on which
internal budgets are based, and by which management and employees,
including our Chief Executive Officer, are compensated. We believe
that investors should have access to the same set of tools that
management uses to analyze our performance. In addition, we believe
that by excluding certain items, such as share-based compensation
charges and acquisition-related impacts, OIBA corresponds more
closely to the cash operating income generated from our business
and allows investors to gain additional understanding of factors
and trends affecting the ongoing cash earning capabilities of our
business, from which capital investments are made. Although
depreciation is also a non-cash expense, it is included in OIBA
because it is driven directly by the capital expenditure decisions
made by management. OIBA also has certain limitations in that it
does not take into account the impact of certain expenses to our
consolidated statements of operations.
Operating Income Before Amortization should be considered in
addition to results prepared in accordance with GAAP, but should
not be considered a substitute for, or superior to, GAAP measures.
We present a reconciliation of this non-GAAP financial measure to
GAAP below.
|
|
eLong, Inc.
|
|
TABULAR RECONCILIATION FOR
NON-GAAP MEASURE
|
|
Operating Income Before
Amortization
|
|
(IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
(Unaudited)
|
|
2011
(Unaudited)
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
2010
|
|
Q1
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OIBA
|
10,319
|
|
20,769
|
|
16,196
|
|
17,403
|
|
64,687
|
|
13,968
|
|
Share-based compensation
charges
|
(4,130)
|
|
(4,549)
|
|
(4,467)
|
|
(5,398)
|
|
(18,544)
|
|
(4,781)
|
|
Amortization of intangible
assets
|
(185)
|
|
(237)
|
|
(322)
|
|
101
|
|
(643)
|
|
(137)
|
|
Other
|
253
|
|
163
|
|
633
|
|
522
|
|
1,571
|
|
4,176
|
|
Income from
operations
|
6,257
|
|
16,146
|
|
12,040
|
|
12,628
|
|
47,071
|
|
13,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA is defined as net income plus (1)
interest expense (income); (2) income tax expense; (3)
depreciation; (4) amortization of intangible assets; (5)
share-based compensation charges; (6) foreign exchange losses
(gains); (7) acquisition-related impacts, including (i) goodwill
and intangible asset impairment, and (ii) losses (gains) recognized
on noncontrolling investment basis adjustments when we acquire
controlling interests; and (8) certain other items, including
restructuring charges. We believe Adjusted EBITDA is a useful
financial metric to assess our operating and financial performance
before the impact of investing and financing transactions, if any,
and income tax expense. Since share-based compensation charges are
non-cash expenses, we believe excluding them from our calculation
of Adjusted EBITDA allows us to provide investors with a more
useful tool for assessing our operating and financial performance.
In addition, we believe that Adjusted EBITDA is used by other
companies and may be used by investors as a measure of our
financial performance. The presentation of Adjusted EBITDA should
not be construed as an indication that eLong's future results will
be unaffected by other charges and gains we consider to be outside
the ordinary course of our business. The use of Adjusted EBITDA has
certain limitations. Amortization and depreciation expenses for
various non-current assets, share-based compensation, other
income/(expenses), and income tax expense have been and will be
incurred and are not reflected in the presentation of Adjusted
EBITDA. Each of these items should also be considered in the
overall evaluation of our results. Additionally, Adjusted EBITDA
does not consider capital expenditures and other investing
activities and should not be considered as a measure of eLong's
liquidity. We seek to compensate for these limitations by providing
the relevant disclosure of our amortization and depreciation
expenses, and share-based compensation charges in the
reconciliations to the GAAP financial measure. The term Adjusted
EBITDA is not defined under GAAP, and Adjusted EBITDA is not
measure of net income, income from operations, operating
performance or liquidity presented in accordance with GAAP. In
addition, eLong's Adjusted EBITDA may not be comparable to Adjusted
EBITDA or similarly titled measures utilized by other companies
since such other companies may not calculate Adjusted EBITDA in the
same manner as we do.
Adjusted EBITDA should be considered in addition to results
prepared in accordance with GAAP, but should not be considered a
substitute for, or superior to, GAAP measures. We present a
reconciliation of this non-GAAP financial measure to GAAP
below.
|
|
eLong, Inc.
|
|
TABULAR RECONCILIATION FOR
NON-GAAP MEASURE
|
|
Adjusted EBITDA and Operating
Income Before Amortization
|
|
(IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
(Unaudited)
|
|
2011
(Unaudited)
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
2010
|
|
Q1
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
5,935
|
|
9,355
|
|
1,153
|
|
4,186
|
|
20,629
|
|
7,710
|
|
Interest income
|
(1,067)
|
|
(1,248)
|
|
(1,720)
|
|
(2,757)
|
|
(6,792)
|
|
(4,591)
|
|
Income tax expense
|
2,079
|
|
3,934
|
|
2,614
|
|
(1,735)
|
|
6,892
|
|
2,786
|
|
Depreciation
|
4,811
|
|
4,643
|
|
4,929
|
|
5,003
|
|
19,386
|
|
4,987
|
|
Amortization of intangible
assets
|
184
|
|
237
|
|
322
|
|
(101)
|
|
642
|
|
137
|
|
Share-based compensation
charges
|
4,130
|
|
4,549
|
|
4,467
|
|
5,398
|
|
18,544
|
|
4,781
|
|
Foreign exchange
losses
|
219
|
|
3,942
|
|
9,360
|
|
12,412
|
|
25,933
|
|
3,131
|
|
Other
|
(1,161)
|
|
-
|
|
-
|
|
-
|
|
(1,161)
|
|
-
|
|
Adjusted EBITDA
|
15,130
|
|
25,412
|
|
21,125
|
|
22,406
|
|
84,073
|
|
18,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
(4,811)
|
|
(4,643)
|
|
(4,929)
|
|
(5,003)
|
|
(19,386)
|
|
(4,987)
|
|
Other
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
14
|
|
OIBA
|
10,319
|
|
20,769
|
|
16,196
|
|
17,403
|
|
64,687
|
|
13,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income generally captures all items on the
statements of operations that occur in normal course operations and
have been, or ultimately will be, settled in cash and is defined as
net income plus net of tax: (1) share-based compensation charges;
(2) acquisition-related impacts, including (i) amortization of
intangible assets, including as part of equity-method investments,
and goodwill and intangible asset impairment, (ii) losses (gains)
recognized on changes in the value of contingent consideration
arrangements, and (iii) losses (gains) recognized on noncontrolling
investment basis adjustments when we acquire controlling interests;
(3) foreign exchange losses; (4) certain other items, including
restructuring charges; and (5) discontinued operations. We believe
Adjusted Net Income is useful to investors because it represents
eLong's results, taking into account depreciation, which management
believes is an ongoing cost of doing business, but excluding the
impact of other non-cash expenses, infrequently occurring items and
items not directly tied to the core operations of our
businesses.
Adjusted Net Income Per Share is defined as Adjusted Net
Income divided by adjusted weighted average shares outstanding,
which include dilution from options and warrants per the treasury
stock method and include all shares relating to Performance Units
in shares outstanding for Adjusted Net Income Per Share. This
differs from the GAAP method for including Performance Units, which
treats them on a treasury stock method basis. Shares outstanding
for Adjusted Net Income Per Share purposes are therefore higher
than shares outstanding for GAAP Net Income Per Share purposes. We
believe Adjusted Net Income Per Share is useful to investors
because it represents, on a per share basis, eLong's consolidated
results, taking into account depreciation, which we believe is an
ongoing cost of doing business, as well as other items which are
not allocated to the operating businesses such as interest income
and income tax expense, but excluding the effects of non-cash
expenses not directly tied to the core operations of our
businesses. Adjusted Net Income and Adjusted Net Income Per Share
have similar limitations as OIBA and Adjusted EBITDA. In addition,
Adjusted Net Income does not include all items that affect our net
income and net income per share for the period. Therefore, we think
it is important to evaluate these measures along with our
consolidated statements of operations.
Adjusted Net Income and Adjusted Net Income Per Share should be
considered in addition to results prepared in accordance with GAAP,
but should not be considered a substitute for, or superior to, GAAP
measures. We present a reconciliation of these non-GAAP financial
measures to GAAP below.
|
|
eLong, Inc.
|
|
TABULAR RECONCILIATION FOR
NON-GAAP MEASURE
|
|
Adjusted Net Income and Adjusted
Net Income Per Share
|
|
(IN THOUSANDS EXCEPT PER SHARE
AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
(Unaudited)
|
|
2011
(Unaudited)
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
2010
|
|
Q1
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
5,935
|
|
9,355
|
|
1,153
|
|
4,186
|
|
20,629
|
|
7,710
|
|
Share-based compensation
charges
|
4,130
|
|
4,549
|
|
4,467
|
|
5,398
|
|
18,544
|
|
4,781
|
|
Amortization of intangible
assets
|
184
|
|
237
|
|
322
|
|
(101)
|
|
642
|
|
137
|
|
Foreign exchange
losses
|
219
|
|
3,942
|
|
9,360
|
|
12,412
|
|
25,933
|
|
3,131
|
|
Other
|
(915)
|
|
129
|
|
185
|
|
215
|
|
(386)
|
|
3,432
|
|
Adjusted net
income
|
9,553
|
|
18,212
|
|
15,487
|
|
22,110
|
|
65,362
|
|
19,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing
adjusted net income per share:
|
|
|
|
|
|
|
|
GAAP diluted weighted average
shares outstanding
|
50,870
|
|
51,013
|
|
51,839
|
|
52,463
|
|
51,655
|
|
52,105
|
|
Additional performance
units
|
657
|
|
551
|
|
415
|
|
297
|
|
447
|
|
316
|
|
Adjusted weighted average shares
outstanding
|
51,527
|
|
51,564
|
|
52,254
|
|
52,760
|
|
52,102
|
|
52,421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per
share
|
0.19
|
|
0.35
|
|
0.30
|
|
0.42
|
|
1.25
|
|
0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE eLong, Inc.