Leju Reports Fourth Quarter and Full Year 2015 Results

Mar 15, 2016, 06:30 ET from Leju Holdings Limited

BEIJING, March 15, 2016 /PRNewswire/ -- Leju Holdings Limited ("Leju" or the "Company") (NYSE: LEJU), a leading online-to-offline ("O2O") real estate services provider in China, today announced its unaudited financial results for the fiscal quarter and full year ended December 31, 2015.

Fourth Quarter 2015 Financial Highlights

  • Total revenues increased by 1% year-on-year to $173.4 million
    • Revenues from e-commerce services increased by 4% year-on-year to $129.7 million
    • Revenues from online advertising services decreased by 15% year-on-year to $37.1 million
    • Revenues from listing services increased by 87% year-on-year to $6.6 million
  • Non-GAAP[1] income from operations decreased by 41% year-on-year to $21.5 million
  • Non-GAAP net income attributable to Leju shareholders decreased by 42% year-on-year to $18.1 million, or $0.13 per diluted American depositary share ("ADS")

[1] Leju uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to Leju shareholders, (4) net income (loss) attributable to Leju shareholders per basic ADS, and (5) net income (loss) attributable to Leju shareholders per diluted ADS, each of which excludes share-based compensation expense and amortization of intangible assets resulting from business acquisitions. See "About Non-GAAP Financial Measures" and "Unaudited Reconciliation of GAAP and Non-GAAP Results" below for more information about the non-GAAP financial measures included in this press release.

Full Year 2015 Financial Highlights

  • Total revenues increased by 16% year-on-year to $575.8 million
    • Revenues from e-commerce services increased by 29% year-on-year to $420.6 million
    • Revenues from online advertising services decreased by 13% year-on-year to $134.2 million
    • Revenues from listing services increased by 47% year-on-year to $21.0 million
  • Non-GAAP income from operations decreased by 36% year-on-year to $68.9 million
  • Non-GAAP net income attributable to Leju shareholders decreased by 37% year-on-year to $57.4 million, or $0.42 per diluted ADS

"We faced a continuously changing market and competitive landscape in 2015. Specifically, in the fourth quarter we experienced some unexpected changes to our e-commerce project pipeline," said Mr. Geoffrey He, Leju's chief executive officer. "However, we remained focused on our strategy of providing media, marketing and e-commerce platforms and maintained our market leading position and profitability in 2015. We launched innovative products for various stages of the home purchasing and renovating process to achieve a better marketing impact and improve overall user experience. In 2016 we plan to strengthen our leadership and continue to innovate to solidify the foundation for long term growth across all of our business lines."

Fourth Quarter 2015 Results

Total revenues were $173.4 million, an increase of 1% from $171.8 million for the same quarter of 2014, mainly driven by growth of revenues from e-commerce services and listing services, partially offset by a decrease in revenue from online advertising services.

Revenues from e-commerce services were $129.7 million, an increase of 4% from $124.5 million for the same quarter of 2014, primarily due to an increase in the average price per discount coupon redeemed, partially offset by a decrease in the number of discount coupons redeemed.

Revenues from online advertising services were $37.1 million, a decrease of 15% from $43.8 million for the same quarter of 2014, primarily due to a decrease in property developers' online advertising demand.

Revenues from listing services were $6.6 million, an increase of 87% from $3.5 million for the same quarter of 2014, primarily due to growth in the number of paying agents.

Cost of revenues was $14.5 million, relatively flat compared to $14.3 million for the same quarter of 2014.

Selling, general and administrative expenses were $144.2 million, an increase of 12% from $128.8 million for the same quarter of 2014, primarily due to increased marketing expenses related to the Company's e-commerce business and the increasingly intense market competition.

Income from operations was $15.4 million, a decrease of 47% from $29.1 million for the same quarter of 2014. Non-GAAP income from operations was $21.5 million, a decrease of 41% from $36.8 million for the same quarter of 2014.

Net income was $12.8 million, a decrease of 44% from $22.9 million for the same quarter of 2014. Non-GAAP net income was $18.2 million, a decrease of 41% from $31.0 million for the same quarter of 2014.

Net income attributable to Leju shareholders was $12.8 million, or $0.09 per diluted ADS, a decrease of 45% from $23.2 million, or $0.17 per diluted ADS, for the same quarter of 2014. Non-GAAP net income attributable to Leju shareholders was $18.1 million, or $0.13 per diluted ADS, a decrease of 42% from $31.3 million, or $0.23 per diluted ADS, for the same quarter of 2014.

Full Year 2015 Results

Total revenues were $575.8 million, an increase of 16% from $496.0 million for 2014, mainly driven by growth of revenues from e-commerce and listing services, partially offset by a decrease in revenue from online advertising services.

Revenues from e-commerce services were $420.6 million, an increase of 29% from $326.7 million for 2014, primarily due to an increase in the average price per discount coupon redeemed, partially offset by a decrease in the number of discount coupons redeemed.

Revenues from online advertising services were $134.2 million, a decrease of 13% from $155.0 million for 2014, primarily due to a decrease in property developers' online advertising demand.

Revenues from listing services were $21.0 million, an increase of 47% from $14.3 million for 2014, primarily due to growth in secondary home sales.

Cost of revenues was $60.3 million, an increase of 18% from $51.1 million for 2014, primarily due to increased staff costs of the editorial department as a result of increased headcount and increased amortization expenses of intangible assets consisting of exclusive rights.

Selling, general and administrative expenses were $475.4 million, an increase of 30% from $366.3 million for 2014, primarily due to increased marketing expenses related to the growth of the Company's e-commerce business and the increasingly intense market competition.

Income from operations was $43.6 million, a decrease of 46% from $81.1 million for 2014. Non-GAAP income from operations was $68.9 million, a decrease of 36% from $107.0 million for 2014.

Net income was $34.8 million, a decrease of 48% from $66.7 million for 2014. Non-GAAP net income was $56.9 million, a decrease of 37% from $90.9 million for 2014.

Net income attributable to Leju shareholders was $35.3 million, or $0.26 per diluted ADS, a decrease of 47% from $66.5 million, or $0.50 per diluted ADS, for 2014. Non-GAAP net income attributable to Leju shareholders was $57.4 million, or $0.42 per diluted ADS, a decrease of 37% from $90.7 million, or $0.68 per diluted ADS, for 2014.

Cash Flow

As of December 31, 2015, the Company's cash and cash equivalents balance was $260.3 million.

Fourth quarter 2015 net cash provided by operating activities was $16.9 million, mainly attributable to non-GAAP net income of $18.2 million, a decrease in amounts due from related parties of $42.9 million, an increase in income tax payable and other tax payable of $10.9 million, partially offset by an increase in customer deposits of $55.2 million. Net cash used in investing activities was $0.8 million, mainly comprised of payments of $0.8 million for property, plant and equipment. Net cash used in financing activities was $44.2 million, mainly comprised of payments of $42.5 million to repay loans to related parties, and $1.8 million to acquire non-controlling interests, which were made in 2014.

Business Outlook

The Company estimates that its fiscal 2016 total revenues will be approximately $660 million to $690 million, which would represent an increase of approximately 15% to 20% from $575.8 million in 2015. This forecast reflects the Company's current and preliminary view, which is subject to change.

Conference Call Information

Leju's management will host an earnings conference call on March 15, 2016 at 7 a.m. U.S. Eastern Time (7 p.m. Beijing/Hong Kong time).

Dial-in details for the earnings conference call are as follows:

U.S./International:

+1-855-298-3404

Hong Kong:                 

+852-5808-3202

Mainland China:          

+400-120-0539

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is "Leju earnings call."

A replay of the conference call may be accessed by phone at the following number until March 21, 2016:

U.S./International:

+1-866-846-0868

Hong Kong:                 

+ 800-966-697

Mainland China:          

+ 400-1842-240

Passcode:        

2660920

Additionally, a live and archived webcast will be available at http://ir.leju.com.

About Leju

Leju Holdings Limited ("Leju") (NYSE: LEJU) is a leading online-to-offline, or O2O, real estate services provider in China, offering real estate e-commerce, online advertising and online listing services. Leju's integrated online platform comprises various mobile applications along with local websites covering more than 260 cities, enhanced by complementary offline services to facilitate residential property transactions. In addition to the Company's own websites, Leju operates the real estate and home furnishing websites of SINA Corporation, and maintains a strategic partnership with Tencent Holdings Limited. For more information about Leju, please visit http://ir.leju.com.

Safe Harbor: Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995.  These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Leju may also make written or oral forward-looking statements in its reports filed or furnished with the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Leju's beliefs and expectations, are forward-looking statements that involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements. Such factors include, but are not limited to, fluctuations in China's real estate market; the highly regulated nature of, and government measures affecting, the real estate and internet industries in China; Leju's ability to compete successfully against current and future competitors; its ability to continue to develop and expand its content, service offerings and features, and to develop or incorporate the technologies that support them; its limited operating history and lack of experience as a stand-alone public company, given its recent carve-out from E-House and prior reliance on E-House for various corporate services; its reliance on SINA, Baidu and others with which it has developed, or may develop in the future, strategic partnerships; substantial revenue contribution from a limited number of real estate markets; complexities resulting from its ongoing relationships with E-House, due to E-House's controlling interest in Leju; and relevant government policies and regulations relating to the corporate structure, business and industry of Leju. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and the Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Leju's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Leju uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to Leju shareholders, (4) net income (loss) attributable to Leju shareholders per basic ADS, and (5) net income (loss) attributable to Leju shareholders per diluted ADS, each of which excludes share-based compensation expense and amortization of intangible assets resulting from business acquisitions. The presentation of these non-GAAP financial measures 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 "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

Leju believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expense, and amortization of intangible assets resulting from business acquisitions, which may not be indicative of Leju's operating performance. These non-GAAP financial measures also facilitate management's internal comparisons to Leju'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 expense and amortization of intangible assets resulting from business acquisitions may continue to exist in Leju'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 provide more details on the reconciliation between non-GAAP financial measures and their most comparable GAAP financial measures.

For investor and media inquiries please contact:

Ms. Melody Liu Leju Holdings Limited Phone: +86 (10) 5895-1062 E-mail: ir@leju.com

 

LEJU HOLDINGS LIMITED

UNAUDITED CONSOLIDATED BALANCE SHEET

(In thousands of U.S. dollars)

December 31,

December 31,

2014

2015

ASSETS

Current assets

Cash and cash equivalents 

317,811

260,296

Accounts receivable, net 

119,742

113,991

Deferred tax assets, net 

29,858

31,074

Prepaid expenses and other current assets 

13,355

20,881

Customer deposits 

-

58,833

Amounts due from related parties 

1

9

Total current assets 

480,767

485,084

Property and equipment, net 

7,159

6,801

Intangible assets, net 

105,419

90,737

Investment in affiliates 

273

669

Goodwill 

40,563

39,807

Other non-current assets 

4,085

3,740

Total assets 

638,266

626,838

LIABILITIES AND EQUITY

Current liabilities

Accounts payable 

371

327

Accrued payroll and welfare expenses 

48,007

45,692

Income tax payable 

57,246

66,815

Other tax payable 

27,805

31,930

Amounts due to related parties 

5,289

10,214

Advance from customers and deferred revenue 

5,054

5,703

Accrued marketing and advertising expenses 

19,270

3,915

Consideration payable of acquiring non-controlling interest 

25,646

7,339

Other current liabilities 

8,612

7,672

Total current liabilities 

197,300

179,607

Deferred tax liabilities 

26,042

22,998

Total liabilities 

223,342

202,605

Equity

Ordinary shares ($0.001 par value): 500,000,000 shares   authorized, 134,015,621 and 134,930,870 shares issued and   outstanding, as of December 31, 2014 and December 31,   2015, respectively 

134

135

Additional paid-in capital 

788,247

773,766

Accumulated deficit 

(377,876)

(343,658)

Subscription receivables 

(689)

(9)

Accumulated other comprehensive income 

5,030

(5,522)

Total Leju equity 

414,846

424,712

Non-controlling interests 

78

(479)

Total equity 

414,924

424,233

TOTAL LIABILITIES AND EQUITY 

638,266

626,838

 

LEJU HOLDINGS LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except share data and per share data)

Three months ended

Year ended

December 31,

December 31,

2014

2015

2014

2015

Revenues

E-commerce

124,489

129,701

326,680

420,552

Online advertising services

43,832

37,072

155,050

134,229

Listing services

3,524

6,588

14,293

21,023

Total revenues

171,845

173,361

496,023

575,804

Cost of revenues

(14,339)

(14,483)

(51,130)

(60,314)

Selling, general and administrative expenses

(128,828)

(144,198)

(366,342)

(475,445)

Other operating income

387

675

2,526

3,568

Income from operations

29,065

15,355

81,077

43,613

Investment income

-

272

-

272

Interest income

510

263

1,316

1,166

Other income (expenses), net

(7)

42

36

290

Income before taxes and equity in affiliates

29,568

15,932

82,429

45,341

Income tax expense

(6,586)

(3,120)

(15,546)

(10,307)

Income before equity in affiliates

22,982

12,812

66,883

35,034

Income (loss) from equity in affiliates

(64)

2

(224)

(228)

Net income

22,918

12,814

66,659

34,806

Less: net income (loss) attributable to   non-controlling interests

(307)

50

138

(524)

Net income attributable to Leju shareholders

23,225

12,764

66,521

35,330

Earnings per share:

Basic

0.17

0.09

0.51

0.26

Diluted

0.17

0.09

0.50

0.26

Shares used in computation:

Basic

133,626,542

134,769,504

129,320,666

134,528,971

Diluted

137,505,730

135,702,573

132,502,100

136,223,974

Note 1

The conversion of Renminbi ("RMB") amounts into USD amounts is based on the rate of USD1 = RMB6.4936 on December 31, 2015 and USD1 = RMB6.3007 for the year ended December 31, 2015

 

LEJU HOLDINGS LIMITED

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(In thousands of U.S. dollars)

Three months ended

Year ended

December 31,

December 31,

2014

2015

2014

2015

Net income

22,918

12,814

66,659

34,806

Other comprehensive loss, net of tax of nil

Foreign currency translation adjustment

236

(5,115)

(605)

(10,586)

Comprehensive income

23,154

7,699

66,054

24,220

Less: Comprehensive income (loss) attributable   to non-controlling interest

(282)

33

130

(559)

Comprehensive income attributable to Leju shareholders

23,436

7,666

65,924

24,779

 

LEJU HOLDINGS LIMITED

Unaudited Reconciliation of GAAP and Non-GAAP Results

(In thousands of U.S. dollars, except share data and per ADS data)

Three months ended

Year ended

December 31,

December 31,

2014

2015

2014

2015

(unaudited)

(unaudited)

(unaudited)

(unaudited)

GAAP income from operations 

29,065

15,355

81,077

43,613

Share-based compensation expense

4,429

3,012

11,311

12,585

Amortization of intangible assets resulting from business    acquisitions

3,275

3,157

14,569

12,653

Non-GAAP income from operations

36,769

21,524

106,957

68,851

GAAP net income 

22,918

12,814

66,659

34,806

Share-based compensation expense (net of tax)

4,429

3,012

11,311

12,585

Amortization of intangible assets resulting from 

   business acquisitions (net of tax)

3,644

2,368

12,957

9,490

Non-GAAP net income 

30,991

18,194

90,927

56,881

Net income attributable to Leju Shareholder

23,225

12,764

66,521

35,330

Share-based compensation expense 

4,429

3,003

11,311

12,576

   (net of tax and non-controlling interests)

Amortization of intangible assets resulting from business    acquisitions (net of tax and non-controlling interests)

3,644

2,368

12,842

9,490

Non-GAAP net income attributable to Leju shareholders

31,298

18,135

90,674

57,396

GAAP net income per ADS - basic

0.17

0.09

0.51

0.26

GAAP net income per ADS - diluted

0.17

0.09

0.50

0.26

Non-GAAP net income per ADS - basic

0.23

0.13

0.70

0.43

Non-GAAP net income per ADS - diluted

0.23

0.13

0.68

0.42

Shares used in calculating basic GAAP / non-GAAP net    income attributable to shareholders per ADS

133,626,542

134,769,504

129,320,666

134,528,971

Shares used in calculating diluted GAAP / non-GAAP net    income attributable to shareholders per ADS

137,505,730

135,702,573

132,502,100

136,223,974

 

LEJU HOLDINGS LIMITED

SELECTED OPERATING DATA

Three months ended

Year ended

December 31,

December 31,

2014

2015

2014

2015

Operating data for e-commerce services

Number of discount coupons issued to     prospective purchasers (number of     transactions)

99,688

98,051

323,495

303,946

Number of discount coupons redeemed (number     of transactions)

76,150

61,567

219,557

203,394

SOURCE Leju Holdings Limited