BEIJING, Nov. 23 /PRNewswire-Asia-FirstCall/ -- eLong, Inc. (Nasdaq: LONG), a leading online travel service provider in China, today reported unaudited financial results for the third quarter ended September 30, 2009.

    (Logo: http://www.newscom.com/cgi-bin/prnh/20041118/ELONGLOGO )

    Highlights

    -- Total revenues increased 15% year-on-year to RMB103.2 million and net
       revenues increased 16% year-on-year to RMB97.2 million.

       Total revenues by product were as follows (figures in RMB million):

                                         %                    %        Y/Y
                          Q3 2009      Total   Q3 2008      Total     Growth
    Hotel commissions        68.6       66%      65.2        73%        5%
    Air ticketing
     commissions             25.3       25%      19.9        22%       27%
    Other                     9.3        9%       4.9         5%       90%
    Total revenues          103.2      100%      90.0       100%       15%


    -- Operating income in the third quarter was RMB5.9 million compared to
       operating loss of RMB19.9 million in the prior year period, driven
       primarily by decrease in sales and marketing expenses and increase in
       gross profit.
    -- Net income in the third quarter was RMB7.5 million compared to net loss
       of RMB15.5 million in the prior year period, driven primarily by an
       increase of RMB25.8 million in operating income and a decrease of
       RMB4.7 million in foreign currency exchange losses, partially offset by
       a decrease of RMB3.9 million in interest income and an increase of
       RMB3.5 million in income tax expense.
    -- Cash and cash equivalents and short-term investments as of September 30,
       2009 were RMB924.2 million (USD135.4 million).

"The summer travel season turned out to be a strong one for eLong. We were pleased with the customer response to our first ever virtual coupon campaign, and are looking forward to providing many more money-saving and worry-free travel booking opportunities to our customers," said Guangfu Cui, Chief Executive Officer of eLong.

"In the third quarter, we were able to add improved revenue growth to our continued execution on cost cutting and efficiency initiatives delivering another quarter of positive operating income," said Mike Doyle, Chief Financial Officer of eLong.

    Business Results

Hotel

Hotel commissions increased 5% for the third quarter of 2009 compared to the prior year quarter, primarily due to higher volume, which was partially offset by lower commission per room night. Commission per room night decreased 7% year-on-year primarily due to lower average daily rates, primarily due to an increase in the proportion of volume from budget hotels, partially offset by an increase in hotel commission rates. Room nights booked through eLong in the third quarter increased 13% year-on-year to 1,183,000.

Air

Air ticketing commissions increased 27% for the third quarter of 2009 compared to the prior year quarter, driven by a 24% increase in air segments to 604,000 and an increase in commission per segment. Commission per segment increased 2%, due to a 13% increase in average ticket price, partially offset by a decrease in air commission rates compared to the prior year quarter.

Profitability

Gross margin in the third quarter of 2009 was 70% compared to 71% in the prior year quarter, primarily due to the higher growth of lower margin air revenue relative to hotel revenue.

    Operating expenses for the third quarter of 2009 and same period in 2008
     were as follows (figures in RMB million):

                                       % Net               % Net      Y/Y
                             Q3 2009  Revenues  Q3 2008   Revenues   Growth
    Service development        15.2       16%     14.2       17%        7%
    Sales and marketing        36.1       37%     50.7       60%      (29%)
    General and
     administrative            10.7       11%     13.8       16%      (22%)
    Amortization of
     intangible assets          0.2        --      0.2        --        --
    Charges related to
     property and
    equipment and
     intangible assets           --        --      0.5        1%     (100%)
    Total operating
     expenses                  62.2       64%     79.4       94%      (22%)

Total operating expenses decreased 22% for the third quarter of 2009 compared to the third quarter of 2008. Total operating expenses were 64% of net revenues, a decrease of 30 percentage points compared to the prior year quarter.

Service development expense consists of expenses related to technology and our product offering, including our websites, platforms, other system development and our supplier relations function. Service development expense increased 7% compared to the prior year quarter mainly driven by an increase in labor costs. As a percentage of net revenues, service development decreased from 17% a year ago to 16% in the third quarter of 2009.

Sales and marketing expense for the third quarter of 2009 decreased 29% over the prior year quarter, mainly driven by decreased marketing promotion expenses and labor costs. Sales and marketing expenses decreased to 37% of net revenues in the third quarter 2009 from 60% in the same quarter of the prior year.

General and administrative expenses for the third quarter of 2009 decreased 22% compared to the prior year quarter, mainly driven by decreases in labor costs and professional fees. General and administrative expenses decreased to 11% of net revenues in the third quarter of 2009 from 16% in the same quarter of the prior year.

Other income (expenses), which represents interest income, foreign exchange gains/losses and other income/expense, was RMB2.1 million in the third quarter of 2009 compared to RMB1.4 million in the third quarter of 2008.

Net income for the third quarter of 2009 was RMB7.5 million, compared to net loss of RMB15.5 million during the prior year quarter.

Net income per ADS and diluted net income per ADS for the third quarter of 2009 were RMB0.32 and RMB0.30, compared to net loss per ADS and diluted loss per ADS of RMB0.62 in the prior year quarter.

Business Outlook

eLong currently expects net revenues for the fourth quarter of 2009 to be within the range of RMB90 million to RMB99 million, equal to an increase of 5% to 15% compared to the fourth quarter of 2008.

Non-GAAP Financial Measures

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 net income/(loss) per ADS, diluted net income/(loss) per ADS. 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 operating losses, 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 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 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 Annual Report on Form 20-F. 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 third quarter 2009 unaudited financial results on November 24, 2009 at 8:00 am Beijing time (November 23, 2009, 7:00 pm EST). 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.

A replay of the call will be available for one day between 8:30 pm EST on November 23, 2009 and 8:30 pm EST on November 24, 2009. The toll-free number for U.S. callers is +1-800-477-4854; the dial-in number for Hong Kong is +852-2802-5151, and the dial-in number for international callers is +1-203- 369-4575. The pass code for the replay is 718800.

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) is a leading online travel company in China. Headquartered in Beijing, eLong has a national presence across China, and uses web-based distribution technologies and a 24-hour call center to provide consumers with accurate travel information and high quality travel booking services. Aiming to deliver value and a worry-free travel booking experience to leisure and business travelers, eLong empowers consumers to make informed decisions by providing convenient online and offline hotel and air ticket booking services as well as easy to use tools such as maps, destination guides, photographs, virtual tours and user reviews. In addition to a selection of more than 9,300 hotels in China, eLong also offers consumers the ability to make bookings at over 100,000 international hotels in more than 100 countries worldwide, and can fulfill domestic and international air ticket reservations in over 80 major cities across China.

eLong operates websites including http://www.elong.com , http://www.elong.net , http://www.lohoo.com and http://www.xici.net .

    For further information, please contact:

     eLong, Inc.
     Investor Relations
     Phone: +86-10-6436-7570
     Email: ir@corp.elong.com




    eLong, Inc.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (IN THOUSANDS EXCEPT PER SHARE AND PER ADS AMOUNTS)

                                              Three Months Ended
                                 Sep. 30,    Jun. 30,    Sep. 30,    Sep. 30,
                                   2008        2009        2009        2009
                                    RMB         RMB         RMB         USD
                               (Unaudited) (Unaudited) (Unaudited) (Unaudited)
    Revenues:
      Hotel commissions           65,152      59,276      68,585      10,047
      Air ticketing commissions   19,929      21,764      25,290       3,705
      Other                        4,909       5,886       9,319       1,365
    Total revenues                89,990      86,926     103,194      15,117

      Business tax and
       surcharges                 (5,887)     (4,982)     (5,957)       (873)
    Net revenues                  84,103      81,944      97,237      14,244

      Cost of services           (24,628)    (23,666)    (29,102)     (4,263)
    Gross profit                  59,475      58,278      68,135       9,981

    Operating
     expenses:
      Service development        (14,155)    (13,195)    (15,221)     (2,230)
      Sales and marketing        (50,654)    (27,422)    (36,095)     (5,288)
      General and
       administrative            (13,849)    (11,147)    (10,755)     (1,575)
      Amortization of
       intangible assets            (217)       (157)       (157)        (23)
      Charges related to
       property and equipment
       and intangible assets        (510)         --          --          --
    Total operating
     expenses                    (79,385)    (51,921)    (62,228)     (9,116)

    Income/(loss) from
     operations                  (19,910)      6,357       5,907         865
    Other income
     (expenses):
      Interest income              6,344       3,883       2,421         355
      Foreign exchange loss       (4,996)       (438)       (323)        (47)
      Other                           54          13          --          --
    Total other income
     (expenses), net               1,402       3,458       2,098         308

    Income/(loss) from
     operations before
     income tax expense          (18,508)      9,815       8,005       1,173
      Income tax benefit
       (expense)                   2,963        (357)       (526)        (77)
    Net income/(loss)            (15,545)      9,458       7,479       1,096

    Net income/(loss)
     per share                     (0.31)       0.20        0.16       0.023
    Diluted net income/
     (loss) per share              (0.31)       0.19        0.15       0.022

    Net income/(loss)
     per ADS*                      (0.62)       0.40        0.32       0.046
    Diluted net income/
     (loss) per ADS*               (0.62)       0.38        0.30       0.044

    Shares used in computing
     net income/(loss)
     per share                    49,610      47,158      47,199      47,199
    Shares used in computing
     diluted net income/(loss)
     per share                    49,610      50,077      49,909      49,909

    Note: 1 ADS = 2 shares

    Share-based compensation
     charges included in:          2,428       2,249       2,747         402
    Cost of services                 179         162         214          31
    Service development              684         418         909         133
    Sales and marketing              338         296         452          66
    General and administrative     1,227       1,373       1,172         172


                                                Nine Months Ended
                                       Sep. 30,     Sep. 30,     Sep. 30,
                                         2008         2009         2009
                                          RMB          RMB          USD
                                      (Unaudited)  (Unaudited)  (Unaudited)
    Revenues:
      Hotel commissions                185,544       184,082       26,967
      Air ticketing commissions         57,890        68,302       10,006
      Other                             13,989        20,209        2,960
    Total revenues                     257,423       272,593       39,933

      Business tax and surcharges      (15,810)      (15,607)      (2,286)
    Net revenues                       241,613       256,986       37,647

      Cost of services                 (71,523)      (76,731)     (11,241)
    Gross profit                       170,090       180,255       26,406

    Operating expenses:
      Service development              (40,183)      (41,445)      (6,071)
      Sales and marketing             (118,429)      (95,124)     (13,935)
      General and administrative       (41,620)      (34,328)      (5,030)
      Amortization of intangible
       assets                             (652)         (471)         (69)
      Charges related to property
       and equipment and
       intangible assets                  (632)           --           --
    Total operating expenses          (201,516)     (171,368)     (25,105)

    Income/(loss) from operations      (31,426)        8,887        1,301
    Other income (expenses):
      Interest income                   22,820        11,686        1,712
      Foreign exchange loss            (62,804)         (617)         (90)
      Other                                 72           155           23
    Total other income
     (expenses), net                   (39,912)       11,224        1,645

    Income/(loss) from operations
     before income tax expense         (71,338)       20,111        2,946
      Income tax benefit(expense)        2,945        (1,173)        (172)
    Net income/(loss)                  (68,393)       18,938        2,774

    Net income/(loss) per share          (1.36)         0.40        0.059
    Diluted net income/(loss)
     per share                           (1.36)         0.38        0.056

    Net income/(loss) per ADS*           (2.72)         0.80        0.118
    Diluted net income/(loss)
     per ADS*                            (2.72)         0.76        0.112

    Shares used in computing net
     income/(loss) per share            50,358        47,146       47,146
    Shares used in computing
     diluted net income/(loss)
     per share                          50,358        49,706       49,706

    Note: 1 ADS = 2 shares

    Share-based compensation
     charges included in:                6,600         7,395        1,084
    Cost of services                       403           516           76
    Service development                  2,283         1,995          292
    Sales and marketing                  1,123         1,452          213
    General and administrative           2,791         3,432          503


    * Non-GAAP financial measures

    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=RMB6.8262 on September 30, 2009, USD1.00=RMB6.8302 on June
            30, 2009 and USD1.00=RMB6.7899 on September 30, 2008 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 U.S. dollars at the rates stated herein on the
            reporting dates, at any other rates or at all.



    eLong, Inc.
    CONSOLIDATED BALANCE SHEETS
    (IN THOUSANDS)
                                         Dec. 31,      Sep. 30,     Sep. 30,
                                           2008          2009         2009
                                            RMB           RMB          USD
                                                     (Unaudited)   (Unaudited)
    ASSETS
    Current assets:
      Cash and cash equivalents           321,541       610,697       89,464
      Short-term investments              635,810       313,503       45,926
      Restricted cash                          --        60,000        8,790
      Accounts receivable, net             42,471        48,191        7,060
      Due from related parties                518         1,442          211
      Prepaid expenses                      8,840        11,349        1,663
      Other current assets                 14,820        13,138        1,924
        Total current assets            1,024,000     1,058,320      155,038
    Property and equipment, net            52,484        45,569        6,676
    Goodwill                               30,000        35,370        5,182
    Intangible assets, net                    943         1,372          201
    Other non-current assets               30,538        29,922        4,382
        Total assets                    1,137,965     1,170,553      171,479

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                     34,146        36,438        5,338
      Income taxes payable                  1,152           408           60
      Due to related parties                8,120         3,153          462
      Accrued expenses and other
       current liabilities                 81,889        88,974       13,033
        Total current liabilities         125,307       128,973       18,893
    Other long-term liabilities               477         3,109          456
        Total liabilities                 125,784       132,082       19,349

    Shareholders' equity
      Ordinary shares                       4,221         4,234          620
      Treasury stock                     (103,393)     (103,393)     (15,146)
      Additional paid-in capital        1,315,590     1,322,929      193,801
      Accumulated deficit                (204,237)     (185,299)     (27,145)
        Total shareholders' equity      1,012,181     1,038,471      152,130
        Total liabilities and
         shareholders' equity           1,137,965     1,170,553      171,479

SOURCE eLong, Inc.

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RELATED LINKS
http://www.elong.com
http://www.elong.net
http://www.lohoo.com
http://www.xici.net
http://www.elong.net/AboutUs/conference.html