SouFun Announces Unaudited Third Quarter 2010 Results
Third quarter operating income up 104.7% year-over-year to US$23.2 million and non-GAAP operating income up 102.5% year-over-year to US$24.8 million.
Third quarter net income attributable to shareholders was US$18.1 million. Non-GAAP net income attributable to shareholders in the third quarter of 2010 up 95.2% year-over-year to US$19.7 million.
BEIJING, Nov 10, 2010 (BUSINESS WIRE) --
SouFun Holdings Limited (NYSE: SFUN) ("SouFun"), the leading real estate and home furnishing Internet portal in China, today announced its unaudited financial results for the third quarter ended September 30, 2010.
Highlights for Third Quarter 2010
- Total revenues in the third quarter of 2010 were US$57.4 million, an increase of 83.4% compared to the third quarter of 2009.
- Operating income in the third quarter of 2010 was US$23.2 million, an increase of 104.7% compared to the third quarter of 2009. Non-GAAP operating income in the third quarter of 2010 was US$24.8 million, an increase of 102.5% compared to the third quarter of 2009.
- Net income attributable to shareholders in the third quarter of 2010 was US$18.1 million, a decrease of 14.4% compared to the third quarter of 2009 due to termination of tax benefits realized in the prior year. Non-GAAP net income attributable to shareholders in the third quarter of 2010 was US$19.7 million, an increase of 95.2% compared to the third quarter of 2009.
"As the leader in the online real estate marketing business, SouFun has kept its strong momentum and maintained its high growth trend in the third quarter of 2010," said Vincent Mo, Executive Chairman of SouFun, "We benefit from SouFun's industry leadership and our resilient business model. SouFun's organic and solid corporate infrastructure has supported and will continue to support its growth consistently in the future."
Financial Results for Third Quarter 2010
Revenues
In the third quarter of 2010, SouFun had total revenues of US$57.4 million, an increase of 83.4% compared to US$31.3 million in the same period in 2009.
Revenue from Marketing Services was US$42.8 million in the third quarter of 2010, an increase of 72.4% compared to US$24.8 million in the same period of 2009.
Revenue from Listing Services was US$10.6 million in the third quarter of 2010, an increase of 129.6% compared to US$4.6 million in the same period of 2009.
Revenue from Other Value-Added Services and Products was US$4.0 million in the third quarter of 2010, an increase of 114.7% compared to US$1.8 million in the same period of 2009.
Cost of Revenue
Cost of revenue was US$15.0 million in the third quarter of 2010, an increase of 87.8% compared to US$8.0 million in the same period of 2009, primarily due to the increased staff cost, business tax and surcharges associated with our revenue growth. Non-GAAP cost of revenue for the third quarter of 2010 was US$12.1 million, an increase of 88.6% compared to US$6.4 million in the same period of 2009.
Operating Expense
Operating expenses for the third quarter of 2010 were US$19.1 million, an increase of 60.2% compared to US$12.0 million in the same period of 2009.
- Selling expenses in the third quarter were US$10.2 million, an increase of 61.2% from US$6.4 million in the same period of 2009, primarily due to increased staff cost and advertising expenses.
- General and administrative expenses in the third quarter of 2010 were US$8.9 million, an increase of 59.0% from US$5.6 million in the same period of 2009, primarily due to increased staff cost and IPO expenses.
Operating Income
Operating income in the third quarter was US$23.2 million, an increase of 104.7% compared to US$11.4 million in the same period of 2009. Non-GAAP operating income for the third quarter of 2010 was US$24.8 million, an increase of 102.5% compared to US$12.3million for the same period in 2009.
Income Tax Expense
Income tax expense in the third quarter of 2010 was US$5.8 million, compared to income tax benefit of US$9.3 million which included US$12.0 million one-off tax benefit in the same period of 2009.
Net Income Attributable to Shareholders
Net income attributable to shareholders in the third quarter of 2010 was US$18.1 million, a decrease of 14.4% from US$21.2 million in the same period of 2009. The 2009 results were increased by a US$12.0 million tax benefit. Non-GAAP net income attributable to shareholders in the third quarter was US$19.7 million, an increase of 95.2% compared to US$10.1 million in the same period of 2009.
Cash Flow
As of September 30, 2010, SouFun had cash, cash equivalents and short-term investments of US$185.0 million, compared to US$120.8 million as of December 31, 2009.
Cash flow from operating activities was US$30.9 million for the third quarter in 2010, compared to US$16.7 million in the same period of 2009.
Business Outlook
SouFun estimates its total revenues for fiscal year of 2010 to be between US$200.0 million and US$205.0 million, representing a 57.4% to 61.4% year-over-year growth.
Conference Call Information
SouFun' management team will host a conference call on November 10, 2010 at 7 a.m. U.S. Eastern Time (8 p.m. Beijing/Hong Kong time).
The dial-in details for the live conference call are:
| US/International: +1 631 5142 526 |
| Hong Kong: +852 2598 7556 |
| Mainland China: 10800 6400 091/ 10800 2640 090 |
| Passcode: SFUN |
Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.
A replay of the conference call may be accessed by phone at the following number after the conclusion of the conference call at 10 a.m. U.S. Eastern Time on November 10, 2010 and until November 16, 2010:
| International: +852 3018 0000 |
| Passcode: 6318229 |
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 and home furnishing and improvement website in China in terms of the number of page views and visitors to its website in 2009. SouFun obtained advertisements from 60.0% of online real estate advertisers among real estate information services websites in China in 2009. SouFun has built a large and active community of users who are attracted by the comprehensive real estate and home furnishing and improvement content available on its portal that forms the foundation of its service offerings. SouFun currently maintains 65 offices to focus on local market needs and its website and database contains real estate-related content coverage of 106 cities in China. For more information about SouFun, please visit http://www.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," "anticipates," "future," "intends," "plans," "believes," "estimates," "may," "should" and similar expressions. Such forward-looking statements include, without limitation, statements regarding the outlook for the fiscal year of 2010 and comments by management in this release and SouFun's strategic and operational plans and future market positions. SouFun may also make forward-looking statements in its periodic reports to 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 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, the current global financial and credit markets crisis and its 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 recur in the future, the uncertain regulatory landscape in China, fluctuations in SouFun's quarterly operating results, its reliance on online advertising sales and listing services for its revenues, any failure to successfully develop and expand its content, service offerings and features, and the technologies that support them, and any failure to successfully integrate acquired businesses.
Further information regarding these and other risks and uncertainties is included in SouFun's prospectus dated September 16, 2010 and its other filings 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 expense, IPO expense, and one-off income tax benefit, 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.
| SouFun Holdings Limited | ||||||||
| Unaudited Condensed Consolidated Balance Sheets | ||||||||
| ( in U.S. dollars in thousands ) | ||||||||
| ASSETS | Sep 30, 2010 | Dec 31, 2009 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents |
134,984 |
92,239 |
||||||
| Short-term investments | 49,992 | 28,558 | ||||||
| Accounts receivable | 21,051 | 13,985 | ||||||
| Prepayment and other current assets | 4,666 | 1,952 | ||||||
| Amounts due from related parties | 7,289 | 7,629 | ||||||
| Deferred tax assets, current | 476 | 471 | ||||||
| Inventories | 5,746 | 4,390 | ||||||
| Total current assets | 224,204 | 149,224 | ||||||
| Property and equipment, net | 7,977 | 4,220 | ||||||
| Deferred tax assets, non current | 611 | 507 | ||||||
| Other non-current assets | 875 | 543 | ||||||
| Total assets | 233,667 | 154,494 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Deferred revenue | 65,570 | 28,795 | ||||||
| Accrued expenses and other liabilities | 31,882 | 37,342 | ||||||
| Dividend payable | 40,166 | 43,906 | ||||||
| Share based compensation liability | - | 11,129 | ||||||
| Income tax payable | 6,411 | 3,134 | ||||||
| Total current liabilities | 144,029 | 124,306 | ||||||
| Deferred tax liability, non-current | 11,096 | 5,687 | ||||||
| Total Liabilities | 155,125 | 129,993 | ||||||
| Shareholders' equity: | ||||||||
| Ordinary shares | 9,743 | 9,489 | ||||||
| Additional paid-in capital | 36,929 | 9,279 | ||||||
| Accumulated other comprehensive income | 8,404 | 5,670 | ||||||
| Accumulated deficits | 23,418 | - | ||||||
| Total SouFun Holdings Limited shareholders' equity | 78,494 | 24,438 | ||||||
| Noncontrolling interest | 48 | 63 | ||||||
| Total shareholders' equity | 78,542 | 24,501 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY | 233,667 | 154,494 | ||||||
| SouFun Holdings Limited | |||||||||
| Unaudited Condensed Consolidated Statements of Operations | |||||||||
| ( in U.S. dollars in thousands, except share data ) | |||||||||
| For the three months ended | |||||||||
| Sep 30, 2010 | Sep 30, 2009 | ||||||||
| Revenues: | |||||||||
| Marketing services |
42,816 |
24,832 | |||||||
| Listing services | 10,627 | 4,629 | |||||||
| Other value-added services and products | 3,968 | 1,848 | |||||||
| Total revenues | 57,411 | 31,309 | |||||||
| Cost of Revenues: | |||||||||
| Cost of services | (12,094 | ) | (6,413 | ) | |||||
| Cost of other value-added services and products | (2,944 | ) | (1,593 | ) | |||||
| Total Cost of Revenues | (15,038 | ) | (8,006 | ) | |||||
| Gross Profit | 42,373 | 23,303 | |||||||
| Operating expenses: | |||||||||
| Selling expenses | (10,243 | ) | (6,355 | ) | |||||
| General and administrative expenses | (8,902 | ) | (5,598 | ) | |||||
| Total Operating Expenses | (19,145 | ) | (11,953 | ) | |||||
| Income from operations | 23,228 | 11,350 | |||||||
| Foreign exchange gain (loss) | 4 | (19 | ) | ||||||
| Interest income | 504 | 265 | |||||||
| Realized gain--trading securities | 59 | 110 | |||||||
| Government grants | 107 | 126 | |||||||
| Income before income tax | 23,902 | 11,832 | |||||||
| Income tax benefits / (expenses) | |||||||||
| Income tax (expense) benefit | (5,796 | ) | 9,325 | ||||||
| Net income | 18,106 | 21,157 | |||||||
| Net loss attributable to non-controlling interests | (4 | ) | (10 | ) | |||||
| Net Income attributable to SouFun Holdings Limited shareholders | 18,110 | 21,167 | |||||||
| Net income per share: | |||||||||
| Basic | 0.24 | 0.29 | |||||||
| Diluted | 0.22 | 0.27 | |||||||
| Net income per ADS: | |||||||||
| Basic | 0.97 | 1.14 | |||||||
| Diluted | 0.90 | 1.09 | |||||||
| Weighted average number of shares outstanding: | |||||||||
| Basic | 74,768,788 | 73,986,129 | |||||||
| Diluted | 80,702,495 | 77,549,406 | |||||||
| SouFun Holdings Limited | ||||||||
| Reconciliation of GAAP and Non-GAAP Results | ||||||||
| ( in U.S. dollars in thousands, except share data ) | ||||||||
| For the three months ended | ||||||||
| Sep 30, 2010 | Sep 30, 2009 | |||||||
| GAAP income from operations |
23,228 |
11,350 | ||||||
| Share-based compensation | 785 | 915 | ||||||
| IPO expense | 819 | - | ||||||
| Non-GAAP income from operations | 24,832 | 12,265 | ||||||
| GAAP net income | 18,106 | 21,157 | ||||||
| One-off tax benefit | - | (11,985 | ) | |||||
| Share-based compensation | 785 | 915 | ||||||
| IPO expense | 819 | - | ||||||
| Non-GAAP net income | 19,710 | 10,087 | ||||||
|
Net Income attributable to SouFun Holdings Limited shareholders |
18,110 | 21,167 | ||||||
| One-off tax benefit | - | (11,985 | ) | |||||
| Share-based compensation expense | 785 | 915 | ||||||
| IPO expense | 819 | - | ||||||
|
Non-GAAP net Income attributable to SouFun Holdings Limited shareholders |
19,714 | 10,097 | ||||||
| GAAP net income per share: | ||||||||
| Basic | 0.24 | 0.29 | ||||||
| Diluted | 0.22 | 0.27 | ||||||
| Non-GAAP net income per share: | ||||||||
| Basic | 0.26 | 0.14 | ||||||
| Diluted | 0.24 | 0.13 | ||||||
| Non-GAAP net income per ADS: | ||||||||
| Basic | 1.05 | 0.55 | ||||||
| Diluted | 0.98 | 0.52 | ||||||
| Weighted average number of shares outstanding: | ||||||||
| Basic | 74,768,788 | 73,986,129 | ||||||
| Diluted | 80,702,495 | 77,549,406 | ||||||
SOURCE: SouFun Holdings Limited
Investors and Media:
SouFun Holdings Limited
Jill Jiao, +86 (10) 5930 6668
Investor Relations Director
ir@soufun.com