CRIC Reports Fourth Quarter and Full Year 2010 Results and Announces Share Repurchase Program

Mar 10, 2011, 04:30 ET from China Real Estate Information Corporation

SHANGHAI, March 10, 2011 /PRNewswire-Asia-FirstCall/ -- China Real Estate Information Corporation ("CRIC" or the "Company") (Nasdaq: CRIC), a leading provider of real estate information, consulting and online services in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2010.

Fourth Quarter 2010 Highlights

  • Total revenues for the fourth quarter increased 51% year-over-year to $62.4 million, exceeding the high end of the Company's guidance range of $56 million to $58 million. Revenues from online services increased 82% year-over-year to $25.2 million. Revenues from information and consulting services and other services increased 35% year-over-year to $37.2 million.
  • Non-GAAP(1) income from operations increased 15% year-over-year to $22.0 million.
  • Non-GAAP net income attributable to CRIC shareholders was $17.3 million for the quarter, compared to $17.8 million in the same quarter of 2009.
  • Non-GAAP diluted earnings per American depositary share ("ADS") for the quarter were $0.12.

Full Year 2010 Highlights

  • Total revenues for the full year of 2010 increased 82% year-over-year to $174.2 million, from $95.7 million for the full year of 2009. Revenues for the full year of 2010 included $66.9 million attributable to online services, while full year 2009 revenues included $13.8 million in fourth quarter revenues from online services. Revenues from real estate information and consulting services and other services were $107.3 million, an increase of 31% compared to the full year of 2009.
  • Non-GAAP net income attributable to CRIC shareholders for the full year of 2010 increased 32% year-over-year to $58.4 million, from $44.2 million for the full year of 2009. Non-GAAP net income attributable to CRIC shareholders for the full year of 2010 included $12.6 million from online services while full year 2009 non-GAAP net income attributable to CRIC shareholders included $5.8 million in fourth quarter net income from online services. Non-GAAP net income attributable to CRIC shareholders from information and consulting services and other services was $45.8 million for the full year of 2010, an increase of 19% compared to the full year of 2009.
  • Non-GAAP diluted earnings per ADS for the year were $0.40.

(1) CRIC  uses in this press release the following non-GAAP financial measures: (1) net income attributable to CRIC shareholders (2) net income attributable to CRIC shareholders per diluted ADS and (3) income from operations, each of which excludes share-based compensation expense, amortization of intangible assets resulting from business acquisitions, gain relating to the acquisition of the Company's online real estate services segment and gain from settlement of pre-existing relationship resulting from business acquisition. See "About Non-GAAP Financial Measures" and "Reconciliation of GAAP and Non-GAAP Results" below for more information about the non-GAAP financial measures included in this press release.

"2010 was a volatile year for China's real estate industry, with multiple rounds of government policies designed to slow down the growth in the domestic real estate market," said Mr. Xin Zhou, CRIC's co-chairman and CEO. "In spite of this, CRIC managed to deliver the targeted growth for our online segment and our information and consulting and other services segments. We also made several important strategic moves. First, we expanded our services geographically from 86 cities at the end of 2009 to 138 cities at the end of 2010, most of which are tier two, three and four cities in China. Second, we established ourselves as a real estate service provider for the entire real estate service value chain by expanding beyond our residential services and into tourism and commercial real estate online and information and consulting services. Furthermore, we distinguished ourselves by opening up our platform to strategic partners. Over the next few years, we will be able to leverage both the strength of SINA's media and Weibo platforms and also Baidu's leading search platform. These strategic moves have laid down a strong foundation that will allow CRIC to continue to grow despite the overall volatile real estate market environment."  

Mr. Zhou continued, "Looking into 2011, we expect our information and consulting services and other services will maintain stable growth while our online services will continue to grow at a fast pace that is similar to last year's growth rate. As demonstrated by our strong results in 2010, our information and consulting business is less impacted by the current real estate market weakness. Our online business continues to benefit from the increased market share of our existing business, our entry into new cities, the addition and growth of tourism and commercial real estate channels and home-furnishing channels, and growth from new businesses associated with our partnerships."

"I am also pleased to announce that our Board of Directors has approved a $50 million stock repurchase program," Mr. Zhou added. "The board's decision to buy back CRIC's shares reflects our firm belief that our shares are presently undervalued and represents a sound investment decision at recent trading prices. We are confident in our ability to successfully execute our business strategies and in the growth prospects of our business, and we believe this repurchase program is in the best interest of CRIC and our shareholders."

Financial Results for the Fourth Quarter of 2010

Revenues

Fourth quarter total revenues were $62.4 million in 2010, an increase of 51% from $41.3 million for the same quarter of 2009.

Revenues from online services were $25.2 million, an increase of 82% from $13.8 million for the fourth quarter of 2009.  The increases were mainly due to substantial gains in market share in all major cities after CRIC acquired its online business in October 2009.

Revenues from information and consulting services were $30.3 million, an increase of 38% from $21.9 million for the same quarter of 2009.  The increases were primarily due to an increased number of subscribers to the CRIC database, more demand for the Company's customized real estate reports and growth in project-based consulting services in the fourth quarter of 2010.

Revenues from other services, including offline advertising and promotional events, were $6.9 million for the fourth quarter of 2010, an increase of 24% from $5.6 million for the same quarter of 2009 due to the real estate promotional event provider acquired in the second quarter of 2010.

Cost of Revenues

Fourth quarter cost of revenues was $13.7 million in 2010, an increase of $6.1 million or 81% compared to the fourth quarter of 2009, primarily due to higher editorial cost associated with the expanded coverage of the Company's websites, additional expenses associated with CRIC's launch of the new real estate channels on Baidu and cost associated with the real estate promotional event provider acquired in the second quarter of 2010.

Selling, General and Administrative ("SG&A") Expenses

Fourth quarter SG&A expenses were $34.8 million in 2010, an increase of 48% from $23.5 million for the same quarter of 2009. The increases in SG&A were primarily due to (1) salary and marketing expenses for the Company's online business associated with additional sales and administrative staff and the launch of real estate channels on Baidu, and (2) salary, bonus, travel, administrative and other office expenses associated with the expansion of the real estate information and consulting services.

Income from Operations

Fourth quarter income from operations was $13.9 million in 2010, an increase of 13% from $12.3 million for the same quarter of 2009. Non-GAAP income from operations for the fourth quarter of 2010 was $22.0 million, an increase of 15% from $19.2 million for the same quarter of 2009.

Net Income Attributable to CRIC Shareholders

Net income attributable to CRIC shareholders was $10.0 million for the quarter, as compared to $32.4 million for the same quarter of 2009. Non-GAAP net income attributable to CRIC shareholders was $17.3 million for the quarter, compared to non-GAAP net income attributable to CRIC shareholders of $17.8 million in the same quarter of 2009. CRIC's 2010 net income was negatively impacted by the Company's spending in the Baidu channels.

Financial Results for the Full Year of 2010

Revenues

Total revenues for the full year of 2010 increased 82% year-over-year to $174.2 million from $95.7 million for the full year of 2009. Revenues for the full year of 2010 included $66.9 million attributable to online services, while full year 2009 revenues included $13.8 million in fourth quarter revenues from online services.

Revenues from real estate information and consulting services were $87.6 million, an increase of 29% compared to the full year of 2009. The increase was primarily due to an increased number of subscribers to the CRIC database and more demand for the Company's customized real estate reports in the full year of 2010.

Revenues from other services, including offline advertising and promotional events, were $19.7 million, an increase of 43% from $13.8 million for the full year of 2009 due mostly to the addition of promotional event services starting from the second quarter of 2010.

Cost of Revenues

For the full year of 2010, cost of revenues was $41.0 million, an increase of 220% from $12.8 million for the full year of 2009, mainly due to the addition of the Company's online real estate business starting from the fourth quarter of 2009, the addition of real estate promotional event services starting from the second quarter of 2010, the addition of Baidu real estate channels starting from the third quarter of 2010 and the Company's overall business expansion.

SG&A Expenses

For the full year of 2010, SG&A expenses were $109.1 million, an increase of 127% from $48.0 million for the full year of 2009, mainly due to the addition of the Company's real estate online business starting from the fourth quarter of 2009, the addition of the Company's new real estate promotional event service business starting from the second quarter of 2010, higher salary, commission, bonus and travel expenses associated with CRIC's real estate information and consulting services. G&A expenses associated with being a public company for the full year of 2010 also contributed to the overall increases in SG&A expenses as compared to the full year of 2009.

Income from Operations

For the full year of 2010, income from operations was $24.1 million. Non-GAAP income from operations for the full year of 2010 was $59.2 million, an increase of 26% from $47.0 million for the full year of 2009.

Net Income Attributable to CRIC Shareholders

Net income attributable to CRIC shareholders for the full year of 2010 was $25.9 million compared to $55.6 million in the full year of 2009. Non-GAAP net income attributable to CRIC shareholders was $58.4 million for the full year of 2010, compared to $44.2 million for the full year of 2009, an increase of 32%. Non-GAAP net income attributable to CRIC shareholders for the full year of 2010 included $12.6 million from online services while full year 2009 non-GAAP net income attributable to CRIC shareholders included $5.8 million in fourth quarter net income from online services. Non-GAAP net income attributable to CRIC shareholders from information and consulting services and other services was $45.8 million for the full year of 2010, an increase of 19% compared to the full year of 2009.

Cash Flow

As of December 31, 2010, the Company had a cash balance of $340.7 million.

Fourth quarter net cash inflow from operating activities was $19.8 million, which was mainly attributable to non-GAAP net income of $17.8 million.

Business Outlook

CRIC estimates that its total revenues for the first quarter of 2011 will be in the range of $39 million to $41 million, compared to $27.2 million in the same quarter of 2010. Total revenues estimate includes estimated revenues from real estate information and consulting services and other services of $19 million to $20 million, compared to $18.9 million in the same quarter of 2010, and estimated revenues from real estate online services of $20 million to $21 million, compared to $8.2 million in the first quarter of 2010. The above forecast reflects the Company’s current and preliminary view, which is subject to change.

Share Repurchase Program

CRIC has been authorized, but not obligated, by its board of directors to repurchase up to $50 million worth of its own ADSs within one year upon receiving such authorization. The repurchases will be made from time to time on the open market at prevailing market prices pursuant to a 10b5-1 plan (which allows CRIC to repurchase its ADSs pursuant to the pre-determined terms under the plan at any time, including during periods in which it may be in possession of material non-public information), in negotiated transactions off the market, in block trades or otherwise. The timing and extent of any purchases will depend upon market conditions, the trading price of ADSs and other factors, and subject to the restrictions relating to volume, price and timing in accordance with applicable law. CRIC expects to implement this share repurchase program in a manner consistent with market conditions and the interests of the shareholders. CRIC's board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size accordingly. CRIC plans to fund repurchases made under this program from its available cash balance.

Conference Call Information

CRIC's management will host an earnings conference call on March 10, 2011 at 7 a.m. U.S. Eastern Time (8 p.m. Beijing/Hong Kong time).

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

U.S./International:

+1-718-354-1157

Hong Kong:

+852-3002-1616

Mainland China:

+86-10-5904-4826

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

A live and archived webcast will be available at http://ir.cric.com.

About CRIC

China Real Estate Information Corporation ("CRIC") (NASDAQ: CRIC) is a leading provider of real estate information, consulting and online services with a presence in over 130 cities across China. CRIC, a subsidiary of E-House (China) Holdings Limited (NYSE: EJ), merged with the online real estate business of SINA Corporation (NASDAQ: SINA) upon the completion of CRIC's initial public offering and listing of its ADSs on the NASDAQ Global Select Market in October 2009. Leveraging its proprietary, advanced and comprehensive real estate information database and analysis system, CRIC provides a broad range of real estate-related services to all participants in the real estate value chain, including developers, suppliers, agents, brokers, service providers and individual consumers. CRIC's services include subscription-based information services, customized consulting services and online services through several real estate websites that provide region-specific real estate information and access to online communities. For more information about CRIC, please visit http://www.cric.com.

Safe Harbor: Forward-Looking Statements

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "likely to" or other similar expressions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. Among other things, the Business Outlook section and quotations from management in this press release, as well as CRIC's strategic and operational plans, contain forward-looking statements. CRIC may also make written or oral forward-looking statements in its reports filed or furnished with the U.S. Securities and Exchange Commission, 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 CRIC's beliefs and expectations, are forward-looking statements and are subject to change, and such change may be material and may have a material adverse effect on the Company's financial condition and results of operations for one or more periods. Forward-looking statements 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 in this press release. Potential risks and uncertainties include, but are not limited to, a severe or prolonged downturn in the global economy, CRIC's susceptibility to fluctuations in the real estate market of China, government measures aimed at China's real estate industry, failure of the real estate services industry in China to develop or mature as quickly as expected, diminution of the value of CRIC's brand or image, CRIC's inability to successfully execute its strategy of expanding into new geographical markets in China, CRIC's failure to manage its growth effectively and efficiently, CRIC's failure to successfully execute the business plans for its strategic alliances and other new business initiatives, CRIC's loss of its competitive advantage if it fails to maintain and improve its proprietary CRIC system or to prevent disruptions or failure in the system's performance, CRIC's failure to compete successfully, fluctuations in CRIC's results of operations and cash flows, CRIC's reliance on a concentrated number of real estate developers, natural disasters and outbreaks of health epidemics and other risks outlined in CRIC's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of this press release, and CRIC does not undertake any obligation to update any such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement CRIC's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), CRIC uses the following non-GAAP financial measures: (1) net income attributable to CRIC shareholders (2) net income attributable to CRIC shareholders per diluted ADS and (3) income from operations, each of which excludes expenses relating to share-based compensation and amortization of intangible assets resulting from business acquisitions, gain relating to the acquisition of the Company's online real estate services segment and gain from settlement of pre-existing relationship resulting from business acquisition. 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 "Reconciliation of GAAP and non-GAAP Results" set forth at the end of this press release.

CRIC believes that these non-GAAP financial measures provide meaningful supplemental information regarding its operating performance by excluding expenses relating to share-based compensation and amortization of intangible assets resulting from business acquisitions that may not be indicative of its operating performance. CRIC believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its operating performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to CRIC's historical performance. CRIC computes its non-GAAP financial measures using the same consistent method from quarter to quarter. CRIC believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP financial measures excluding expenses relating to share-based compensation and amortization of intangible assets resulting from business acquisitions is that these expenses charges have been and will continue to be significant recurring expenses in CRIC's business for the foreseeable future. Management compensates for these limitations by providing specific information regarding the GAAP amount excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliation between non-GAAP financial measures and their most comparable GAAP financial measures.

For investor and media inquiries please contact:

In China

Penny Pan

Manager, Investor Relations

China Real Estate Information Corporation

Phone: +86 (21) 6086-8111

E-mail: ir@cric.com

Derek Mitchell

Ogilvy Financial, Beijing

Phone: +86 (10) 8520-6284

E-mail: cric@ogilvy.com

In the U.S.

Jessica Barist Cohen

Ogilvy Financial, New York

Phone: +1 (646) 460-9989

E-mail: cric@ogilvy.com

CHINA REAL ESTATE INFORMATION CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEET

(In thousands of U.S. dollars)

December 31,

December 31,

2009

2010

ASSETS

Current assets

Cash and cash equivalents

311,067

340,720

Unbilled accounts receivable, net

22,739

51,175

Accounts receivable, net

5,691

9,796

Advance payment for properties

8,108

-

Prepaid expenses

1,283

8,253

Other receivables and current assets

5,706

13,979

Amounts due from related parties

2,461

5,080

Total current assets

357,055

429,003

Property and equipment, net

7,423

11,177

Intangible assets, net

201,139

182,622

Goodwill

449,903

450,299

Investment in affiliates

-

4,444

Other non-current assets

4,571

6,378

TOTAL ASSETS

1,020,091

1,083,923

LIABILITES AND EQUITY

Current liabilities

Accounts payable

2,289

3,300

Advance from customers

2,855

6,455

Accrued payroll and welfare expenses

3,873

9,882

Income tax payable

9,270

16,935

Other tax payable

3,085

5,428

Amounts due to related parties

7,301

2,785

Deposit for property for sale

2,781

200

Other current liabilities

4,184

7,531

Total current liabilities

35,638

52,516

Deferred tax liabilities - non-current

42,032

39,969

Total liabilities

77,670

92,485

Equity

Ordinary shares ($0.0002 par value): 250,000,000 shares authorized,  142,922,222 and 143,749,405 shares issued and outstanding, as of  December 31, 2009 and December 31, 2010, respectively

29

29

Additional paid-in capital

863,169

882,429

Subscription receivables

-

(98)

Retained earnings

74,386

97,557

Accumulated other comprehensive income

3,629

8,403

Total CRIC shareholders' equity

941,213

988,320

Non-controlling interests

1,208

3,118

Total equity

942,421

991,438

TOTAL LIABILITIES AND EQUITY

1,020,091

1,083,923

CHINA REAL ESTATE INFORMATION CORPORATION

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,

2009

2010

2009

2010

Revenues

Information and consulting services

21,928

30,341

68,045

87,567

Online services

13,830

25,160

13,830

66,855

Other services

5,563

6,888

13,779

19,732

41,321

62,389

95,654

174,154

Cost of revenues

(7,576)

(13,688)

(12,810)

(41,010)

Selling, general and administrative expenses

(23,522)

(34,758)

(48,049)

(109,089)

Gain from settlement of pre-existing   relationship

2,101

-

2,101

-

Income from operations

12,324

13,943

36,896

24,055

Interest income

147

494

279

1,727

Other income , net

551

142

2,725

3,174

Income before taxes, equity in affiliates

13,022

14,579

39,900

28,956

Income tax expense

(1,632)

(4,171)

(6,307)

(2,791)

Income before equity in affiliates

11,390

10,408

33,593

26,165

Income from equity in affiliates

21,453

(276)

22,016

(276)

Net income

32,843

10,132

55,609

25,889

Less: Net income/(loss) attributable to

  non-controlling interests

442

182

7

(52)

Net income attributable to CRIC   shareholders

32,401

9,950

55,602

25,941

Earnings per share:

Basic

0.25

0.07

0.64

0.18

Diluted

0.24

0.07

0.63

0.18

Shares used in computation:

Basic

131,775,483

143,644,249

86,610,265

143,288,987

Diluted

135,829,100

147,074,939

88,264,301

146,193,046

Notes

Note 1

The conversion of Renminbi ("RMB") amounts into USD amounts is based on the rate of USD1 = RMB6.6227 on December 31, 2010 and USD1 = RMB6.6727 for the three months ended December 31, 2010.

CHINA REAL ESTATE INFORMATION CORPORATION

Reconciliation of GAAP and Non-GAAP Results

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

Three months ended December 31,

Year ended December 31,

2009

2010

2009

2010

(unaudited)

(unaudited)

(unaudited)

(unaudited)

GAAP income from operations1

12,324

13,943

36,896

24,055

    Share-based compensation        expenses2

3,868

2,947

6,848

14,734

    Amortization expenses of        intangible assets resulting from        business acquisitions3

5,117

5,126

5,365

20,458

    Gain from settlement of pre-       existing relationship

(2,101)

-

(2,101)

-

Non-GAAP income from   operations4

19,208

22,016

47,008

59,247

GAAP net income attributable to   CRIC shareholders5

32,401

9,950

55,602

25,941

    Share-based compensation        expenses (net of tax and non-        controlling interests)

3,868

2,947

6,848

14,734

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

5,093

4,445

5,279

17,762

    Gain relating to online real estate        services segment acquisition(net        of tax and non-controlling        interests)

(21,453)

-

(21,453)

-

    Gain from settlement of pre-existing        relationship(net of tax and non-        controlling interests)

(2,101)

-

(2,101)

-

Non-GAAP net income attributable   to CRIC shareholders6

17,808

17,342

44,175

58,437

GAAP net income per ADS - basic

0.25

0.07

0.64

0.18

GAAP net income per ADS - diluted

0.24

0.07

0.63

0.18

Non-GAAP net income per ADS -   basic

0.14

0.12

0.51

0.41

Non-GAAP net income per ADS -   diluted

0.13

0.12

0.50

0.40

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

131,775,483

143,644,249

86,610,265

143,288,987

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

135,829,100

147,074,939

88,264,301

146,193,046

Notes 2:

1: GAAP income from operations included $0.6 million and $14.2 million GAAP losses from operations attributable to online real estate services segment for the fourth quarter and full year of 2010, respectively.

2: Share-based compensation expenses included $2.2 million and $8.7 million attributable to online real estate services segment for the fourth quarter and full year of 2010, respectively.

3: Amortization expenses, recorded in both cost of revenues and SG&A, included $5.0 million and $20.0 million attributable to online real estate services segment for the fourth quarter and full year of 2010, respectively.

4: Non-GAAP income from operations included $6.5 million and $14.4 million attributable to online real estate services segment for the fourth quarter and full year of 2010, respectively.

5: GAAP net income attributable to CRIC shareholders included $1.2 million and $13.5 million net loss attributable to online real estate services segment for the fourth quarter and full year of 2010, respectively.

6: Non-GAAP net income attributable to CRIC shareholders included $5.3 million and $12.6 million attributable to online real estate services segment for the fourth quarter and full year of 2010, respectively.

SOURCE China Real Estate Information Corporation



RELATED LINKS

http://www.cric.com


http://ir.cric.com