SouFun Announces First Quarter 2013 Results

08 May, 2013, 07:15 ET from SouFun Holdings Limited

BEIJING, May 8, 2013 /PRNewswire/ -- SouFun Holdings Limited (NYSE: SFUN) ("SouFun"), the leading real estate Internet portal and one of the leading home furnishing and improvement websites in China, announced today its unaudited financial results for the first quarter 2013. (Amounts are in US dollars, unless otherwise specified.)

First Quarter 2013 Highlights

  • Revenue in the first quarter of 2013 was $91.0 million, a 55.6% increase from the corresponding period in 2012.
  • Operating income in the first quarter of 2013 was $37.2 million, a 161.9% increase from the corresponding period in 2012. Non-GAAP operating income in the first quarter of 2013 was $39.0 million, a 151.9% increase from the corresponding period in 2012.
  • Net income attributable to SouFun Holdings Limited's shareholders was $28.4 million, or $0.34 per fully diluted share, which was a year-over-year increase of 95.5%. Non-GAAP net income attributable to SouFun Holdings Limited's shareholders was $33.2 million, or $0.40 per fully diluted share, which was a year-over-year increase of 134.3%.

"We had a very strong quarter to start 2013," said Vincent Mo, Executive Chairman of SouFun. "Our focus on expanding existing business and constant innovation has allowed SouFun to deliver solid results quarter after quarter. We will continue to invest in our people, technology, and local city infrastructure. We believe such investments are critical to ensure SouFun's long-term sustainable expansion and will create significant value for our shareholders in the long run."

First Quarter 2013 Results

Revenues

SouFun reported total revenues of $91.0 million for the first quarter of 2013, representing an increase of 55.6% from the corresponding period in 2012, primarily driven by the growth in SouFun membership services and listing services.

Revenue from marketing services was $35.8 million for the first quarter of 2013, an increase of 4.6% from $34.3 million for the corresponding period in 2012, primarily driven by the increase in number of advertisers.

Revenue from e-commerce services was $26.4 million for the first quarter of 2013, a 118.9% increase from $12.0 million for the same period in 2012 due to the increase in property purchases through our SouFun membership service.

Revenue from listing services was $26.8 million for the first quarter of 2013, an increase of 145.4% from $10.9 million for the corresponding period in 2012 primarily due to increased property listings from agency subscribers. The increase in listings was partially driven by the announcement of certain housing-related government policies, which resulted in a significant increase in secondary home market transaction volume.

Revenue from other value-added services was $2.0 million for the first quarter of 2013, an increase of 60.8% from $1.3 million for the corresponding period in 2012, primarily driven by database sales.

Cost of Revenue

Cost of revenue was $20.0 million for the first quarter of 2013, an increase of 21.2% from $16.5 million for the corresponding period in 2012. The increase in cost of revenue was primarily due to the increase in staff costs, business tax, value-added taxes and other surcharges.

Gross margin was 78.0% for the first quarter of 2013, improved from 71.8% for the corresponding period in 2012 as a result of controlled headcount increase as compared to the revenue growth.

Operating Expenses

Operating expenses were $33.8 million for the first quarter of 2013, an increase of 21.7% from $27.8 million for the corresponding period in 2012, primarily due to effective cost control.

Selling expenses were $18.7 million for the first quarter of 2013, an increase of 29.6% from $14.5 million for the corresponding period in 2012, primarily due to increased staff cost and advertising and promotional expenses.

General and administrative expenses were $15.1 million for the first quarter of 2013, an increase of 13.2% from $13.3 million for the corresponding period in 2012, primarily due to increased staff cost and, to a lesser extent, an increase in allowance for doubtful accounts.

Operating income was $37.2 million for the first quarter of 2013, an increase of 161.9% from $14.2 million for the corresponding period in 2012, driven by the revenue growth and effective cost control.

Income tax expense was $11.6 million for the first quarter of 2013, a substantial increase compared to $1.9 million for the corresponding period in 2012. The increase was primarily due to a $5.0 million incremental tax expense driven by profit growth and a $3.1 million accrual of dividend-related withholding tax in the first quarter of 2013, as well as a $1.6 million one-time tax benefit in the first quarter of 2012.

Net income attributable to SouFun Holdings Limited's shareholders was $28.4 million for the first quarter of 2013, an increase of 95.5% from $14.5 million for the corresponding period in 2012. Fully diluted earnings per share were $0.34 for the first quarter of 2013, a 88.9% increase from $0.18 for the corresponding period in 2012.

Non-GAAP EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $40.9 million for the first quarter of 2013, an increase of 134.4% as compared to $17.4 million for the corresponding period in 2012.

As of March 31, 2013, SouFun had cash, cash equivalents, and short-term investments (excluding the available-for-sale security) of $203.9 million, compared to $143.6 million as of December 31, 2012. Cash flow from operating activities was $59.8 million for the first quarter of 2013, a 127.1% increase from $26.3 million for the same period in 2012.

Business Outlook

SouFun raises its total revenue guidance for 2013 from between $516.0 million and $527.0 million to between $527.0 million and $538.0 million, or from a year-over-year increase of between 20.0% and 22.5% to between 22.5% and 25.0%, despite uncertainties in China's property market. This forecast reflects SouFun's current and preliminary view, which is subject to change.

Conference Call Information

SouFun's management team will host a conference call on May 8, 2013 at 8 a.m. U.S. Eastern  Daylight Time (8 p.m. Beijing/Hong Kong time).

The dial-in details for the live conference call are:

International Toll Dial-In Number:

+65 6723 9381

International Toll Free Dial-In Number(s):

Hong Kong

800 930 346

United States

+1 866 519 4004

Local Dial-In Number(s):

Mainland China

400 620 8038 / 800 819 0121

Hong Kong

+852 2475 0994

United States, New York

+1 718 354 1231

Passcode:

SFUN

Conference ID # 49186489

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

A telephone replay of the call will be available after the conclusion of the conference call at 10:00 a.m. U.S. Eastern Daylight Time on May 8 through May 15, 2013. The dial-in details for the telephone replay are:

International:

+61 2 8199 0299

Toll Free:

Mainland China

400 120 0932 / 800 870 0205

Hong Kong

800 963 117

United States

+1 855 452 5696

Local Toll:

Hong Kong

+852 3051 2780

United States, New York

+1 646 254 3697

Conference ID # 49186489        

A live and archived webcast of the conference call will be available on SouFun's website at http://ir.soufun.com.

About SouFun

SouFun operates the leading real estate Internet portal in China in terms of the number of page views and visitors to our websites in 2012. Through SouFun's websites, it provides marketing, e-commerce, listing, and other value-added services for China's fast-growing real estate and home-related sectors. SouFun's Internet portal is highly focused on user experience, and supports SouFun's users in seeking information on 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 320 cities in China. For more information about SouFun, please visit http://ir.soufun.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. Such forward-looking statements include, without limitation, statements regarding the revenue outlook for 2013 and statements regarding SouFun's strategic and operational plans and focus, current and future market positions the impact of government policies and China's real estate and home furnishings market. Statements that are not historical facts, including statements about SouFun's beliefs and expectations, 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, SouFun's limited operating history, current global economic conditions and their potential impact on the Chinese economy, 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, challenges in China's real estate market, the impact of competitive market conditions for our services and 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 our annual report on form 20-F and other documents we have 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 and (3) basic and diluted earnings per ordinary share. 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 a one-time gain on purchase for the three months ended March 31, 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:

Ms. Yiwen Zhang Investor Relations Manager SouFun Holdings Limited Phone: +86-10-5631 8659 Fax: +86-10-5631 8709 E-mail: zhangyiwen@soufun.com

Or

Mr. Hong Zhao Vice President of Finance SouFun Holdings Limited Phone: +86-10-5631-8707 Fax: +86-10-5631 8709 E-mail: hongzhao@soufun.com

SouFun Holdings Limited

Condensed Consolidated Balance Sheets

 ( in thousands of U.S. dollars, except as noted )

ASSETS

March 31,

Dec 31,

2013

2012

Current assets:

(Unaudited)

(Audited)

Cash and cash equivalents

178,331

118,167

Short-term investments

26,987

26,841

Accounts receivable, net

33,344

30,029

Funds receivable

20,279

7,600

Prepayment and other current assets

(including related party balance of nil and US$50 as of December 31, 2012 and March 31, 2013, respectively)

6,837

9,226

Deferred tax assets, current

2,774

2,734

Total current assets 

268,552

194,597

Non-current assets:

Property and equipment, net

219,969

79,564

Restricted cash, non-current

392,452

391,416

Deferred tax assets, non-current

2,517

1,723

Deposit for non-current assets

8,773

8,750

Prepayment for BaoAn acquisition

111,367

Other non-current assets

16,116

13,744

Total non-current assets

639,827

606,564

Total assets

908,379

801,161

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term loans

270,670

270,670

Deferred revenue

89,618

65,871

Accrued expenses and other liabilities

96,004

89,306

Customers' refundable fees

36,852

18,449

Income tax payable

27,428

23,659

Total current liabilities

520,572

467,955

Non-current liabilities:

Long-term loans

80,750

80,750

Deferred tax liabilities, non-current

83,854

64,947

Other non-current liabilities

919

Total non-current liabilities

165,523

145,697

Total Liabilities  

686,095

613,652

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 56,013,735 shares and 56,458,493 shares issued and outstanding as at December 31, 2012 and March 31, 2013, respectively

 

 

 

7,249

 

 

 

7,192

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 December 31, 2012 and March 31, 2013, respectively

 

 

 

3,124

 

 

 

3,124

Additional paid-in capital

74,465

69,637

Accumulated other comprehensive income

25,420

23,974

Retained earnings

111,361

82,952

Total SouFun Holdings Limited shareholders' equity

221,619

186,879

Noncontrolling interests

665

630

Total equity

222,284

187,509

TOTAL LIABILITIES AND  EQUITY

908,379

801,161

 

 

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

March 31,  2013

March 31, 2012

Revenues:

   Marketing services

35,813

34,252

  E-commerce services

26,363

12,045

   Listing services

26,834

10,934

   Other value-added services

2,024

1,259

Total revenues

91,034

58,490

Cost of revenues:

  Cost of services

(20,030)

(16,522)

Total cost of revenues

(20,030)

(16,522)

Gross Profit

71,004

41,968

Operating expenses:

  Selling expenses

(18,732)

(14,458)

  General and administrative expenses

(15,060)

(13,299)

Total operating expenses

(33,792)

(27,757)

Operating Income

37,212

14,211

     Foreign exchange loss

(2)

     Interest income

5,678

4,427

Interest expense

(3,337)

(2,617)

     Government grants

422

437

Other-than-temporary impairment on                available-for-sale security

(14)

Gain on bargain purchase

102

Income before income taxes and     noncontrolling interests

40,077

16,442

Income tax expenses

  Income tax expenses

(11,633)

(1,908)

Net income

28,444

14,534

Net income attributable to noncontrolling interests

35

Net income attributable to SouFun Holdings      Limited's shareholders

28,409

14,534

 

Other comprehensive income, net of tax

Foreign currency translation

1,368

139

Unrealized gain on available-for-sale security

78

Other comprehensive income, net of tax

1,446

139

Comprehensive income

29,890

14,673

 

Comprehensive income attributable to     noncontrolling interests

35

Comprehensive income attributable to SouFun Holdings     Limited's shareholders

29,855

14,673

Basic

0.36

0.19

Diluted

0.34

0.18

Weighted average number of Class A and Class B ordinary shares outstanding:

Basic

77,898,531

76,805,249

Diluted

83,308,983

81,068,135

 

 

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

March 31, 2013

March 31, 2012

GAAP income from operations

37,212

14,211

Share-based compensation

1,763

1,262

Non-GAAP income from operations

38,975

15,473

GAAP net income

28,444

14,534

One-off tax benefit

(1,631)

Withholding tax related to dividends

3,149

Other-than-temporary impairment on available-for-sale security                     

14

Share-based compensation

1,763

1,262

Gain on bargain purchase

(102)

Non-GAAP net income

33,254

14,179

Net Income attributable to SouFun Holdings Limited shareholders                                   

28,409

14,534

One-off tax benefit

(1,631)

Withholding tax related to dividends

3,149

Other-than-temporary impairment on available-for-sale security

14

Share-based compensation expense

1,763

1,262

Gain on bargain purchase

(102)

Non-GAAP net Income attributable to SouFun Holdings Limited shareholders

33,219

14,179

GAAP earnings per share for Class A and Class B ordinary shares:

Basic

0.36

0.19

Diluted

0.34

0.18

Non-GAAP earnings per share for Class A and Class B ordinary shares:

Basic

0.43

0.18

Diluted

0.40

0.17

Weighted average number of Class A and Class B ordinary shares outstanding:

Basic

77,898,531

76,805,249

Diluted

83,308,983

81,068,135

 

Three months ended

March 31, 2013

March 31, 2012

Non-GAAP net income

33,254

14,179

Add back:

Interest expense

3,337

2,617

Income tax expenses

8,484

3,539

Depreciation expenses

1,499

1,537

Subtract:

Interest income 

(5,678)

(4,427)

Non-GAAP EBITDA

40,896

17,445

 

 

SOURCE SouFun Holdings Limited



RELATED LINKS

http://ir.soufun.com