eHi Car Services Announces Third Quarter 2015 Results

SHANGHAI, Nov. 18, 2015 /PRNewswire/ -- eHi Car Services Limited ("eHi" or the "Company") (NYSE: EHIC), a leading car rentals and car services provider in China, today announced its unaudited financial results for the third quarter ended September 30, 2015.

Third Quarter 2015 Highlights

• Net revenues increased by 78.9% year-over-year to RMB393.8 million (US$62.0 million[1]) for the third quarter of 2015 from RMB220.1 million for the third quarter of 2014.

• Non-GAAP adjusted EBITDA[2] increased by 116.4% year-over-year to RMB165.3 million (US$26.0 million) for the third quarter of 2015 from RMB76.4 million for the third quarter of 2014.
• Non-GAAP adjusted EBITDA margin[3] was 42.0% for the third quarter of 2015, compared with 34.7% for the third quarter of 2014.
• Net income for the third quarter of 2015 was RMB6.0 million (US$1.0 million), compared with a net loss of RMB26.9 million for the third quarter of 2014.
• Average available fleet size[4] increased by 73.6% year-over-year to 28,499 vehicles for the third quarter of 2015 from 16,419 vehicles for the third quarter of 2014. As of September 30, 2015, total period-end fleet size[5] was 35,107 vehicles.
• Total fleet RevPAC[6] increased to RMB150 for the third quarter of 2015 from RMB146 for the third quarter of 2014.
• Fleet utilization rate[7] for car rentals was 73.8% for the third quarter of 2015, compared with 70.3% for the third quarter of 2014.

Mr. Ray Zhang, eHi's Chairman and Chief Executive Officer, said, "Our third quarter results were driven by the solid advancement in our car rentals and car services businesses, our established reputation for quality and service, and economies of scale. During the third quarter, we continued to expand our national footprint and fleet size per store, strengthen partnerships with corporations and government agencies, while managing our operations more efficiently. Looking ahead, our strategy will remain focused on fleet expansion, operating efficiency improvement, technology innovation and customer experience enhancement to achieve sustainable long-term growth."

"Today is the one-year anniversary of our listing as a public company on the New York Stock Exchange. We have made significant progress and achieved multiple milestones in the past year. I would like to thank our customers for their loyalty and support, our employees for their dedication and contributions, and our shareholders and partners for their understanding and patience. We look forward to maximizing shareholder value and embracing a bright future by continued successful execution of our growth plan for the years to come," Mr. Zhang concluded.

Mr. Colin Sung, eHi's Chief Financial Officer, said, "We maintained healthy growth momentum across the board in the third quarter with top line increasing by 78.9% year-over-year and achieving bottom line profitability. While we continued to advance the core areas of our business through our growth initiatives, we are also taking prudent steps to improve our cost structure, resulting in the improvement in non-GAAP adjusted EBITDA margin in the third quarter. With our sound balance sheet, sufficient capital and access to additional financing opportunities, we remain confident in our long-term growth prospects."

Third Quarter 2015 Financial Results

Net revenues for the third quarter of 2015 were RMB393.8 million (US$62.0 million), up 78.9% year-over-year, which was attributable to increases in net revenues from both car rentals and car services.

Net revenues from car rentals for the third quarter of 2015 were RMB300.7 million (US$47.3 million), up 93.4% year-over-year, primarily driven by increases in the Company's average available fleet size and RevPAC for car rentals.

Net revenues from car services for the third quarter of 2015 were RMB93.1 million (US$14.6 million), up 44.1% year-over-year, primarily driven by increases in the Company's average available fleet size for car services, as well as increased demand from the Company's corporate and individual clients.

Vehicle operating expenses for the third quarter of 2015 were RMB303.7 million (US$47.8 million), up 66.0% year-over-year, primarily due to increases in depreciation, labor and vehicle insurance costs.  

The Company disposed of 636 used vehicles during the third quarter of 2015 through various sales channels and recorded a gain of RMB1.1 million (US$0.2 million). The gain was recognized as an adjustment to the vehicle-related depreciation expense as part of the Company's vehicle operating expenses. During the third quarter of 2014, the Company disposed of 466 used vehicles and recorded a loss of RMB0.3 million.  

Selling, general and administrative expenses for the third quarter of 2015 were RMB61.2 million (US$9.6 million), up 44.6% year-over-year, primarily due to increases in employee-related costs such as salaries and welfare expenses as a result of increases in the number of employees, and to a lesser extent, due to increases in channel promotion fees.

Profit from operations for the third quarter of 2015 was RMB34.3 million (US$5.4 million), compared with loss from operations of RMB5.0 million for the third quarter of 2014.

Net income for the third quarter of 2015 was RMB6.0 million (US$1.0 million), compared with a net loss of RMB26.9 million for the third quarter of 2014.  

Basic and diluted earnings per ADS for the third quarter of 2015 were RMB0.09 (US$0.01) each, compared with basic and diluted loss per ADS of RMB33.15 each for the third quarter of 2014.

Non-GAAP adjusted EBITDA for the third quarter of 2015 was RMB165.3 million (US$26.0 million), up 116.4% year-over-year, mainly due to the continued increase in average available fleet size.  

Non-GAAP adjusted EBITDA margin for the third quarter of 2015 was 42.0%, compared with 34.7% for the third quarter of 2014.  

As of September 30, 2015, the Company's cash, cash equivalents and restricted cash totaled RMB1.8 billion (US$281.6 million).  

Outlook

The Company estimates that its fiscal year 2015 net revenues will be approximately RMB1.5 billion, which would represent an increase of approximately 76% from RMB851.2 million in 2014. The Company estimates that its total period-end fleet size as of December 31, 2015 will reach approximately 38,000 vehicles, which would represent an increase of approximately 92% from 19,746 vehicles as of December 31, 2014. This forecast reflects the Company's current and preliminary view, which is subject to change.  

Conference Call Information

The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on November 18, 2015 (9:00 PM Beijing/Hong Kong time on November 18, 2015).

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

United States (toll free): 1-888-346-8982
International: 1-412-902-4272
Hong Kong (toll free): 800-905-945
Hong Kong: 852-3018-4992
China: 400-120-1203

Participants should call in at least 5 minutes before the scheduled start time and ask to be connected to the "eHi Car Services call."

Additionally, a live and archived webcast of the conference call will be available on the investor relations section of eHi's website at http://ir.ehi.com.cn.  

A replay of the conference call will be accessible by phone at the following numbers until November 25, 2015:

United States (toll free): 1-877-344-7529
International: 1-412-317-0088
Replay Access Code: 10076132 

About eHi Car Services Limited

eHi Car Services Limited (NYSE: EHIC) is China's No. 1 car services provider and No. 2 car rentals provider in terms of market share by revenues in 2013, according to Frost & Sullivan. The Company's mission is to provide comprehensive mobility solutions as an alternative to car ownership by best utilizing existing resources and sharing economy to create optimal value. eHi distinguishes itself in China's fast-growing car rental and car services market through its complementary business model, customer-centric corporate culture, broad geographic coverage, efficient fleet management, leading brand name, and commitment to technological innovation. eHi is the exclusive strategic partner in China of Enterprise, the largest car rental company in the world, and is the designated and preferred business partner of Ctrip, a leader in the online travel agency industry in China. For more information regarding eHi, please visit http://en.1hai.cn/.

About Non-GAAP Financial Measures

To supplement its unaudited condensed consolidated financial statements which are presented in accordance with U.S. GAAP, the Company uses adjusted EBITDA as a non-GAAP financial measure. Adjusted EBITDA represents net income or loss before depreciation and amortization, share-based compensation, interest expenses, interest income, provision for income taxes, gains from waiver of warrants and gains from sale of cost method investment. The Company's management believes that adjusted EBITDA facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods. For more information on the 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.

Non-GAAP information is not prepared in accordance with GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using adjusted EBITDA is that adjusted EBITDA excludes depreciation and amortization, share-based compensation, interest expenses, interest income and provision for income taxes that have been and will continue to be significant recurring portions of the Company's business for the foreseeable future.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and 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," "confident" and similar statements. eHi may also make written or oral forward-looking statements in its reports filed with or furnished to the SEC, 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. Any statements that are not historical facts, including statements about eHi's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: eHi's goals and strategies; its future business development, financial condition and results of operations; its ability to achieve and sustain profitability; its heavy reliance on its proprietary technology platform; its ability to compete successfully against current and future competitors; its ability to sustain its growth rates and manage its expansion plan; its ability to dispose used vehicles at desirable prices or timing or through appropriate channels; its ability to raise sufficient capital to fund and expand its operations at a reasonable cost; various government policies on automobile control and purchase restrictions in certain Chinese cities; its ability to enhance its brand recognition and maintain a high level of customer satisfaction; its ability to control the losses resulting from customer violation of traffic rules; and its ability to obtain all of the requisite permits, licenses or making all of the requisite filings or registrations or meeting other regulatory requirements for operating car rentals and car services business in China. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this press release is current as of the date of the press release, and eHi does not undertake any obligation to update such information, except as required under applicable law.

For investor and media inquiries, please contact:

eHi Car Services Limited
Tel: +86 (21) 6468-7000 ext. 8742
E-Mail: [email protected] 

The Piacente Group, Inc. 
Mr. Don Markley
Tel: +1-212-481-2050
E-Mail: [email protected]  

SOURCE eHi Car Services Limited