BEIJING, Nov. 6, 2014 /PRNewswire/ -- SouFun Holdings
Limited (NYSE: SFUN) ("SouFun"), the leading real estate Internet
portal in China, announced today
its unaudited financial results for the third quarter ended
September 30, 2014.
Third Quarter 2014 Highlights
- Revenue in the third quarter of 2014 was $190.5 million, a 3.0% increase from the
corresponding period in 2013.
- Operating income in the third quarter of 2014 was
$70.7 million, a 36.1% decrease from
the corresponding period in 2013. Non-GAAP operating
income in the third quarter of 2014 was $72.2 million, a 35.8% decrease from the
corresponding period in 2013.
- Net income attributable to SouFun's
shareholders was $61.0
million, representing a year-over-year decrease of 40.6%.
Fully diluted earnings per ADS were $0.14, a 41.7% decrease from the corresponding
period in 2013. Non-GAAP net income attributable to SouFun's
shareholders was $69.7 million,
representing a year-over-year decrease of 27.8%. Non-GAAP fully
diluted earnings per ADS were $0.16,
a 30.4% decrease from the corresponding period in 2013.
"SouFun experienced a tough quarter as a result of market change
and the company's transformation," said Vincent Mo, Executive Chairman and CEO of
SouFun. "Expanding from a pure information platform to broader
transaction and financial platforms is a big challenge. However,
good signs from our two new platforms are very encouraging and we
are determined to carry on the transformation even though this will
impact our financial performance in the short term, because we
believe eventually and together, our information, transaction and
financial platforms, will make SouFun a greater company."
Third Quarter 2014 Results
Revenues
SouFun reported total revenue of $190.5
million in the third quarter of 2014, representing an
increase of 3.0% from the corresponding period in 2013. The slow
growth is primarily due to the decrease in listing services and
marketing services.
Revenue from marketing services was $81.0
million in the third quarter of 2014, a decrease of 6.4%
from $86.5 million in the
corresponding period in 2013, due to more advertising clients using
the e-commerce services versus the marketing services as a result
of a difficult real estate market.
Revenue from e-commerce services was $67.6 million in the third quarter of 2014, a
36.0% increase from $49.7 million in
the same period in 2013, primarily due to the attractiveness of the
new transaction platform to our clients.
Revenue from listing services was $36.7
million in the third quarter of 2014, a decrease of 20.8%
from $46.3 million for the
corresponding period in 2013, primarily due to discounts which the
Company offered to the agency clients since the end of June.
Revenue from other value-added services was $5.3 million in the third quarter of 2014, an
increase of 107.8% from $2.6 million
in the corresponding period in 2013, primarily due to the recently
introduced new internet financial services.
Cost of Revenue
Cost of revenue was $48.8 million
in the third quarter of 2014, an increase of 71.1% from
$28.5 million in the corresponding
period in 2013. The increase in cost of revenue was mainly driven
by new e-commerce model, increased staff cost, as well as an
increase in taxes and surcharges.
Gross margin was 74.4% in the third quarter of 2014, compared to
84.6% in the corresponding period in 2013.
Operating Expenses
Operating expenses were $71.2
million in the third quarter of 2014, an increase of 54.3%
from $46.2 million for the
corresponding period in 2013.
Selling expenses were $41.0
million in the third quarter of 2014, an increase of 61.4%
from $25.4 million in the
corresponding period in 2013, primarily due to the new e-commerce
model, increased advertising and promotional expenses and staff
cost.
General and administrative expenses were $30.2 million in the third quarter of 2014, an
increase of 45.5% from $20.7 million
in the corresponding period in 2013, primarily due to increased
staff cost.
Operating Income
Operating income was $70.7 million
in the third quarter of 2014, a decrease of 36.1% from $110.6 million in the corresponding period in
2013, due to slow growth in revenue and faster increase of
expenses.
Income Tax Expenses
Income tax expense was $18.9
million in the third quarter of 2014, a 33.5% increase
compared to $14.2 million for the
corresponding period in 2013. Income tax in 2013 benefited from a
one-time benefit of $15.1 million
resulting from a lower dividend-related withholding tax rate for
certain subsidiaries.
Net Income and EPS
Net income attributable to SouFun's shareholders was
$61.0 million in the third quarter of
2014, a 40.6% decrease from $102.7
million in the corresponding period in 2013. Fully diluted
earnings per ADS were $0.14 in the
third quarter of 2014, a decrease of 41.7% from $0.24 in the corresponding period in 2013.
Adjusted EBITDA
Adjusted EBITDA, defined as non-GAAP net income before income
taxes, interest expenses, interest income, depreciation and
amortization, was $78.3 million in
the third quarter of 2014, a decrease of 33.4% as compared to
$117.6 million in the corresponding
period in 2013.
Cash
As of September 30, 2014, SouFun
had cash, cash equivalents, and short-term investments of
$896.9 million, compared to
$927.3 million as of June 30, 2014. Cash flow from operating
activities was $53.1 million in the
third quarter of 2014, a 57.9% decrease from $126.3 million in the same period in 2013, due to
less advance payments and increased account receivables.
Business Outlook
SouFun adjusts its revenue guidance for 2014 from between
$727.0 million and $739.0 million, or
a year-over-year increase of between 14% and 16%, to between
$675.0 million and $688.0 million, or
a year-over-year increase of between 6% and 8%. SouFun is adjusting
its revenue guidance for 2014 in light of the slowdown in the real
estate market in China, our
reduction in fees we charge for listing services, and longer time
for new businesses to contribute significantly to revenue growth.
This forecast reflects SouFun's current and preliminary view, which
is subject to change and may not reflect actual results.
Conference Call Information
SouFun's management team will host a conference call on the same
day at 8:00 AM U.S. EST (9:00 PM Beijing / Hong
Kong time). The dial-in details for the live conference call
are:
The dial-in details for the live conference call are:
International
Toll:
|
+65
6723-9381
|
Local
Toll:
|
United
States
|
+1 866-519-4004/+1
845-675-0437
|
Hong Kong
|
+852 800-930-346/+852
2475-0994
|
Mainland
China
|
+86 400-620-8038 /
+86 800-819-0121
|
Passcode:
|
SFUN
|
A telephone replay of the call will be available after the
conclusion of the conference call from 11:00
PM U.S. EDT on May 7 through
11:59 PM May
14, 2014. The dial-in details for the telephone replay
are:
International
Toll:
|
+61
2-8199-0299
|
Toll-Free:
|
|
United
States
|
+1 855-452-5696 /
+1 646-254-3697
|
Hong
Kong
|
+852 800-963-117 /
+852 3051-2780
|
Mainland
China
|
+86 400-602-2065 /
+86 800-870-0206
|
Conference ID
number:
|
2778 4540
|
A live and archived webcast of the conference call will be
available on SouFun's website at http://ir.fang.com.
About SouFun
SouFun operates the leading real estate Internet portal in
China in terms of the number of
page views and visitors to its websites in 2014. Through our
websites, we provide marketing, e-commerce, listing and other
value-added services for China's
real estate and home furnishing and improvement sectors. Our
user-friendly websites support active online communities and
networks of users seeking information on, and other value-added
services for, the real estate and home-related sectors in
China. SouFun currently maintains
about 100 offices to focus on local market needs and its website
and database contains real estate related content covering more
than 330 cities in China. For more
information about SouFun, please visit http://ir.fang.com.
Safe Harbor Statements
This announcement contains 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.
Such forward-looking 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,""is expected
to,""anticipates,""aim,""future,""intends,""plans,""believes,""are
likely to,""estimates,""may,""should" and similar expressions.
Statements that are not historical facts, including statements
about SouFun's beliefs and expectations, including but not limited
to revenue guidance, growth prospects and the introduction and
success of new products and services and new lines of business,are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of important factors
could cause actual results to differ materially from those
contained in any forward-looking statement. Potential risks and
uncertainties include, but are not limited to, the impact of the
slowdown in the PRC real estate market on SouFun and the impact on
revenues of our existing and new service fees reductions, the
ability of SouFun to retain real estate listing agencies as
customers during challenging economic periods, the success of
SouFun's new business initiatives, the ability of SouFun to manage
its operating expenses, the impact of, measures taken or to
be taken by the Chinese government to control real estate growth
and prices and other events which could occur in the future,
economic challenges in China's
real estate market, the impact of competitive market conditions for
our services, our ability to maintain and increase our leadership
in China's home related internet
sector, the uncertain regulatory landscape in China, fluctuations in our quarterly operating
results, our continued ability to execute business strategies
including our SouFun membership services and SouFun Online Shop,
our ability to continue to expand in local markets, our reliance on
online advertising sales and listing services for our revenues, any
failure to successfully develop and expand our content, service
offerings and features, including the success of new features to
meet evolving market needs, and the technologies that support them,
and, should we in the future make acquisitions, any failure to
successfully integrate acquired businesses.
Further information regarding these and other risks and
uncertainties is included in SouFun's annual report on form 20-F
and other documents filed with the U.S. Securities and Exchange
Commission. SouFun does not assume any obligation to update any
forward-looking statements in this release and elsewhere, which
apply only as of the date of this press release.
About Non-GAAP Financial Measures
To supplement SouFun's consolidated financial results presented
in accordance with United States Generally Accepted Accounting
Principles ("GAAP"), SouFun uses in this press release the
following measures defined as non-GAAP financial measures by the
United States Securities and Exchange Commission: (1) operating
income, (2) net income, (3) basic and diluted earnings per ordinary
share and ADS and (4) adjusted EBITDA. The presentation of the
non-GAAP financial information is not intended to be considered in
isolation or as a substitute for the financial information prepared
and presented in accordance with GAAP. For more information on
these non-GAAP financial measures, please see the table captioned
"Reconciliation of GAAP and non-GAAP Results" set forth at the end
of this press release.
SouFun believes that these non-GAAP financial measures provide
meaningful supplemental information to investors regarding its
operating performance by excluding share-based compensation
expenses and the related tax effects, as well as realized gain on
available-for-sale security for the three months ended June 30, 2013, which (1) may not be indicative of
SouFun's recurring core business operating results or (2) are not
expected to result in future cash payments. These non-GAAP
financial measures also facilitate management's internal
comparisons to SouFun's historical performance and assist its
financial and operational decision making. A limitation of using
these non-GAAP financial measures is that share-based compensation
has been and will continue to be a significant recurring expense
that will continue to exist in SouFun's business for the
foreseeable future. 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 reconciliation between non-GAAP financial measures
and their most directly comparable GAAP financial measures.
For investor and media inquiries, please contact:
Dr. Hua Lei
Deputy CFO
Phone: +86-10-5631-8661
Email: leihua@soufun.com
Ms. Yiwen Zhang
Investor Relations Manager
Phone: +86-10-5631 8659
E-mail: zhangyiwen@soufun.com
SouFun Holdings
Limited
|
Condensed
Consolidated Balance Sheet
|
( in U.S.
dollars in thousands )
|
ASSETS
|
|
September
30,
|
|
December
31,
|
|
2014
|
2013
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
386,244
|
|
|
581,010
|
|
Restricted cash,
current
|
|
|
97,455
|
|
|
255,917
|
|
Short-term
investments
|
|
|
510,650
|
|
|
10,138
|
|
Accounts receivable,
net
|
|
|
54,533
|
|
|
44,541
|
|
Funds
receivable
|
|
|
43,865
|
|
|
37,124
|
|
Prepayment and other
current assets
|
|
|
27,850
|
|
|
31,758
|
|
Loan
receivable
|
|
|
36,504
|
|
|
-
|
|
Deferred tax assets,
current
|
|
|
3,518
|
|
|
3,165
|
Total current
assets
|
|
|
1,160,619
|
|
|
963,653
|
Non-current
assets:
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
217,167
|
|
|
221,442
|
|
Restricted cash,
non-current
|
|
|
108,899
|
|
|
257,499
|
|
Deferred tax assets,
non current
|
|
|
1,243
|
|
|
1,728
|
|
Deposit for
non-current assets
|
|
|
86,044
|
|
|
38,140
|
|
Long-term
investments
|
|
|
59,269
|
|
|
-
|
|
Other non-current
assets
|
|
|
18,843
|
|
|
22,627
|
Total non-current
assets
|
|
|
491,465
|
|
|
541,436
|
Total
assets
|
|
|
1,652,084
|
|
|
1,505,089
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Short-term
loans
|
|
|
80,750
|
|
|
90,000
|
|
Deferred
revenue
|
|
|
121,780
|
|
|
115,043
|
|
Accrued expenses and
other liabilities
|
|
|
195,626
|
|
|
143,292
|
|
Income tax
payable
|
|
|
26,039
|
|
|
43,688
|
|
Customers' refundable
fees
|
|
|
75,653
|
|
|
53,066
|
|
Amounts due to a
related party
|
|
|
1,499
|
|
|
537
|
Total current
liabilities
|
|
|
501,347
|
|
|
445,626
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Long-term
loans
|
|
|
100,000
|
|
|
180,750
|
Convertible senior
notes
|
|
|
400,000
|
|
|
350,000
|
Deferred tax
liabilities, non-current
|
|
|
103,793
|
|
|
84,767
|
|
Other non-current
liabilities
|
|
|
384
|
|
|
479
|
Total non-current
liabilities
|
|
|
604,177
|
|
|
615,996
|
Total
Liabilities
|
|
|
1,105,524
|
|
|
1,061,622
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary
shares, par value Hong Kong Dollar ("HK$") 1 per share, 600,000,000
shares authorized for Class A and Class B in aggregate, and
57,568,424 shares and 57,440,895 shares issued and outstanding as
at March 31, 2014 and December 31, 2013, respectively
|
|
|
7,496
|
|
|
7,376
|
|
Class B ordinary
shares, par value HK$1 per share, 600,000,000 shares authorized for
Class A and Class B in aggregate, and 24,336,650 shares and
24,336,650 shares issued and outstanding as at March 31, 2014 and
December 31, 2013 , respectively
|
|
|
3,124
|
|
|
3,124
|
|
Additional paid-in
capital
|
|
|
99,287
|
|
|
89,071
|
|
Accumulated other
comprehensive income
|
|
|
47,803
|
|
|
43,381
|
|
Retained
earnings
|
|
|
388,850
|
|
|
300,515
|
Total SouFun
Holdings Limited shareholders' equity
|
|
|
546,560
|
|
|
443,467
|
|
Non controlling
interests
|
|
|
-
|
|
|
-
|
Total
shareholders' equity
|
|
|
546,559
|
|
|
443,467
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
1,652,084
|
|
|
1,505,089
|
SouFun Holdings
Limited
|
Condensed
Consolidated Statements of Comprehensive Income
|
( in
thousands of U.S. dollars, except share data and per
share data )
|
|
|
Three months
ended
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
2014
|
|
|
2013
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
Marketing
services
|
|
|
80,971
|
|
|
86,485
|
E-commerce
services
|
|
|
67,567
|
|
|
49,694
|
Listing
services
|
|
|
36,678
|
|
|
46,311
|
Other
value-added
services
|
|
|
5,316
|
|
|
2,558
|
Total
revenues
|
|
|
190,532
|
|
|
185,048
|
|
|
|
|
|
|
|
Cost of
Revenues:
|
|
|
|
|
|
|
Cost of
services
|
|
|
(48,831)
|
|
|
(28,532)
|
Total Cost of
Revenues
|
|
|
(48,831)
|
|
|
(28,532)
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
141,701
|
|
|
156,516
|
|
|
|
|
|
|
|
Operating expenses
and income:
|
|
|
|
|
|
|
Selling
expenses
|
|
|
(41,021)
|
|
|
(25,415)
|
General
and administrative
expenses
|
|
|
(30,175)
|
|
|
(20,739)
|
Other
income
|
|
|
180
|
|
|
274
|
Operating
Income
|
|
|
70,685
|
|
|
110,636
|
|
|
|
|
|
|
|
Foreign exchange
loss
|
|
|
3
|
|
|
-
|
Interest
income
|
|
|
10,071
|
|
|
7,532
|
Interest
expense
|
|
|
(4,060)
|
|
|
(3,632)
|
Government
grants
|
|
|
3,234
|
|
|
2,391
|
Gain on bargain
purchase
|
|
|
|
|
|
|
Income before
income taxes and non controlling interests
|
|
|
79,934
|
|
|
116,927
|
Income tax
expenses
|
|
|
|
|
|
|
Income tax
expense
|
|
|
(18,941)
|
|
|
(14,186)
|
Net
income
|
|
|
60,992
|
|
|
102,741
|
Net income
attributable
to non
controlling
interests
|
|
|
-
|
|
|
1
|
Net income
attributable to SouFun Holdings Limited shareholders
|
|
|
60,992
|
|
|
102,740
|
Other
comprehensive income, net of tax
|
|
|
|
|
|
|
Foreign
currency
Translation
adjustments
|
|
|
(2,391)
|
|
|
3,528
|
Unrealized
gain on available-for-sale security
|
|
|
12,562
|
|
|
-
|
Total other
comprehensive income, net of tax
|
|
|
10,171
|
|
|
3,528
|
Comprehensive
income
|
|
|
71,163
|
|
|
106,269
|
Earnings per share
for Class A and Class B ordinary shares
|
|
|
|
|
|
|
Basic
|
|
|
0.74
|
|
|
1.31
|
Diluted
|
|
|
0.68
|
|
|
1.22
|
|
|
|
|
|
|
|
Earnings per
ADS
|
|
|
|
|
|
|
Basic
|
|
|
0.15
|
|
|
0.26
|
Diluted
|
|
|
0.14
|
|
|
0.24
|
Weighted average
number of Class A and Class B ordinary shares
outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
82,258,420
|
|
|
78,217,258
|
Diluted
|
|
|
93,396,601
|
|
|
84,240,621
|
Weighted average
number of ADSs outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
411,292,102
|
|
|
391,086,290
|
Diluted
|
|
|
466,983,005
|
|
|
421,203,105
|
SouFun Holdings
Limited
|
Reconciliation of
GAAP and Non-GAAP Results
|
( in thousands of
U.S. dollars, except share data and per share data)
|
|
|
Three months
ended
|
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
2013
|
GAAP income from
operations
|
|
|
70,685
|
|
|
110,636
|
Share-based
compensation expense
|
|
|
1,478
|
|
|
1,711
|
Non-GAAP income from
operations
|
|
|
72,163
|
|
|
112,347
|
|
|
|
|
|
|
|
GAAP net
income
|
|
|
60,992
|
|
|
102,741
|
Withholding tax
related to dividends
|
|
|
7,250
|
|
|
(15,101)
|
Share-based
compensation expense
|
|
|
1,478
|
|
|
7,224
|
Gain on bargain
purchase
|
|
|
-
|
|
|
1,711
|
Non-GAAP net
income
|
|
|
69,720
|
|
|
96,575
|
|
|
|
|
|
|
|
Net Income
attributable to
SouFun Holdings Limited shareholders
|
|
|
60,992
|
|
|
102,740
|
Withholding tax
related to dividends
|
|
|
7,250
|
|
|
(15,101)
|
Share-based
compensation expense
|
|
|
1,478
|
|
|
7,224
|
Gain on bargain
purchase
|
|
|
-
|
|
|
1,711
|
Non-GAAP net Income
attributable to SouFun Holdings Limited shareholders
|
|
|
69,720
|
|
|
96,574
|
|
|
|
|
|
|
|
GAAP earnings per
share for Class A and Class B ordinary shares:
|
|
|
|
|
|
|
Basic
|
|
|
0.74
|
|
|
1.31
|
Diluted
|
|
|
0.68
|
|
|
1.22
|
GAAP earnings per
share ADS:
|
|
|
|
|
|
|
Basic
|
|
|
0.15
|
|
|
0.26
|
Diluted
|
|
|
0.14
|
|
|
0.24
|
Non-GAAP earnings
per share for Class A and Class B ordinary shares:
|
|
|
|
|
|
|
Basic
|
|
|
0.85
|
|
|
1.23
|
Diluted
|
|
|
0.78
|
|
|
1.15
|
Non-GAAP earnings
per ADS shares:
|
|
|
|
|
|
|
Basic
|
|
|
0.17
|
|
|
0.25
|
Diluted
|
|
|
0.16
|
|
|
0.23
|
Weighted average
number of Class A and Class B ordinary shares
outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
82,258,420
|
|
|
78,217,258
|
Diluted
|
|
|
93,396,601
|
|
|
84,240,621
|
Weighted average
number of ADSs outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
411,292,102
|
|
|
391,086,290
|
Diluted
|
|
|
466,983,005
|
|
|
421,203,105
|
|
|
|
|
|
|
|
SouFun Holdings
Limited
|
Reconciliation of
Non-GAAP EBITDA
|
( in thousands of
U.S. dollars)
|
|
Three months
ended
|
|
September 30,
2014
|
September
30, 2013
|
|
|
|
Non-GAAP
Net
income
|
69,720
|
96,575
|
Add back:
|
|
|
Interest
expense
|
4,060
|
3,632
|
Income tax
expenses
|
11,691
|
22,063
|
Depreciation
expenses
|
2,881
|
2,817
|
Subtract:
|
|
|
Interest
income
|
(10,071)
|
(7,532)
|
Adjusted
EBITDA
|
78,281
|
117,555
|
SOURCE SouFun Holdings Limited