Fang Announces First Quarter 2018 Results
First Quarter 2018 Highlights
- Total revenues were
$62.8 million . - Operating loss was
$3.9 million . Non-GAAP operating income was$0.6 million . A description of the adjustments from GAAP to non-GAAP operating income is detailed in the Reconciliation Statement following this press release. - Net loss attributable to Fang's shareholders was
$44.9 million , which was primarily due to the change in fair value of equity securities of a loss of$42.2 million in accordance with new accounting pronouncement. Fully diluted loss per ADS was$0.10 . - Non-GAAP net income attributable to Fang's shareholders was
$1.8 million . Non-GAAP fully diluted income per ADS were$0.00 . A description of the adjustments from GAAP to non-GAAP net loss attributable to Fang's shareholders and fully diluted loss per ADS is detailed in the Reconciliation Statement following this press release. - Adjusted EBITDA was
$7.1 million . A description of the adjustments from GAAP net loss to Adjusted EBITDA is detailed in the Reconciliation Statement following this press release.
"The company is deepening its reform from business lines to full operations including financial management," commented
First Quarter 2018 Results
Revenues
Fang reported total revenues of
Revenue from listing services was
Revenue from marketing services was
Revenue from e-commerce services was
Revenue from Internet financial services was
Revenue from other value-added services was
Cost of Revenue
Cost of revenue was
Operating Expenses
Operating expenses were
Selling expenses were
General and administrative expenses were
Operating Loss
Operating loss was
Change in fair value of equity securities
Change in fair value of equity securities for the first quarter of 2018 was a loss of
Income Tax (benefits) / expenses
Income tax benefits were
Net Loss and EPS
Net loss attributable to Fang's shareholders was
Adjusted EBITDA
Adjusted EBITDA, defined as GAAP net income / (loss) before share-based compensation, investment income, change in fair value of equity securities, income taxes, interest expenses, interest income and depreciation, was
Cash
As of
Business Outlook
Based on current market conditions and current operations, Fang expects its non-GAAP net income to be profitable for the fiscal year ending
About Non-GAAP Financial Measures
To supplement Fang's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Fang uses in this press release the following measures defined as non-GAAP financial measures by the United States Securities and Exchange Commission: (1) non-GAAP operating (loss)/income, (2) non-GAAP net (loss)/income and (3) non-GAAP basic and diluted (loss)/earnings per ordinary share and per ADS (4) adjusted EBITDA. 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.
The Company believes that these non-GAAP measures help identify underlying trends in the Company's business that could otherwise be distorted by the effect of the change in fair value of equity securities, and the expenses and gains that the Company includes in income from operations and net income. The Company believes that these non-GAAP measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making. A limitation of using these non-GAAP financial measures is that share-based compensation, investment income, change in fair value of equity securities, interest income and expenses, income tax expenses, and depreciation expenses have been and will continue to be a significant recurring item that will continue to exist in Fang'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.
New accounting pronouncements
The new revenue recognition standard (ASU No. 2014-09 'Revenue from Contracts with Customers') was released in 2014 and becomes effective for Fang with effect from
In
Conference Call Information
Fang's management team will host a conference call on the same day at 8:00 AM U.S. EST (8:00 PM Beijing/Hong Kong time). The dial-in details for the live conference call are:
International Toll: |
+65 67135090 |
Local Toll: |
|
United States |
+1 845-675-0437 / +1 866-519-4004 |
Hong Kong |
+852 3018-6771 / +852 800-906-601 |
Mainland China |
+86 400-620-8038 / +86 800-819-0121 |
Passcode: |
SFUN |
A telephone replay of the call will be available after the conclusion of the conference call from
International Toll: |
+61 2-8199-0299 |
Toll-Free: |
|
United States |
+1 855-452-5696 / +1 646-254-3697 |
Hong Kong |
+852 800-963-117 / +852 3051-2780 |
Mainland China |
+86 400-602-2065 / +86 800-870-0205 |
Conference ID: |
4658048 |
A live and archived webcast of the conference call will be available on Fang's website at http://ir.fang.com.
About Fang
Fang operates the leading real estate Internet portal in
Safe Harbor Statements
This press release 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, and include, without limitation, statements regarding Fang's future financial performance, revenue guidance, growth and growth rates, market position and continued business transformation. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Fang's control, which may cause its actual results, performance or achievements to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, without limitation, the impact of Fang's transformation back to a technology-driven Internet platform and the impact of current and future government policies affecting China's real estate market. Further information regarding these and other risks, uncertainties or factors is included in Fang's filings with the U.S. Securities and Exchange Commission. Fang 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 law.
For investor and media inquiries, please contact:
Dr. Hua Lei
CFO
Phone: +86-10-5631-8661
Email: leihua@fang.com
Ms. Jessie Yang
Director, Investor Relations
Phone: +86-10-5631-8805
Email: jessieyang@fang.com
Fang Holdings Limited |
||||
Condensed Consolidated Balance Sheets |
||||
(in thousands of U.S. dollars, except share data and per share data) |
||||
ASSETS |
March 31, |
December 31, |
||
2018 |
2017 |
|||
Current assets: |
||||
Cash and cash equivalents |
166,507 |
228,276 |
||
Restricted cash, current |
231,730 |
223,002 |
||
Short-term investments |
53,463 |
55,801 |
||
Accounts receivable, net |
68,266 |
66,884 |
||
Funds receivable |
7,206 |
6,264 |
||
Prepayment and other current assets |
34,947 |
32,704 |
||
Commitment deposits |
2,130 |
5,876 |
||
Loan receivable, current |
144,852 |
129,438 |
||
Amount due from related parties |
561 |
167 |
||
Total current assets |
709,662 |
748,412 |
||
Non-current assets: |
||||
Property and equipment, net |
687,618 |
622,145 |
||
Prepaid land lease payments |
36,893 |
35,728 |
||
Loan receivable, non-current |
13,492 |
14,674 |
||
Deferred tax assets, non-current |
7,719 |
7,602 |
||
Restricted cash, non-current portion |
40,749 |
39,982 |
||
Deposit for non-current assets |
65,629 |
58,722 |
||
Long-term investments |
445,766 |
470,964 |
||
Other non-current assets |
1,125 |
2,026 |
||
Total non-current assets |
1,298,991 |
1,251,843 |
||
Total assets |
2,008,653 |
2,000,255 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
Current liabilities: |
||||
Short-term loans |
279,242 |
236,985 |
||
Deferred revenue |
188,662 |
168,884 |
||
Accrued expenses and other liabilities |
141,943 |
158,799 |
||
Customers' refundable fees |
2,951 |
7,070 |
||
Income tax payable |
7,767 |
4,374 |
||
Convertible senior notes |
5,700 |
5,700 |
||
Total current liabilities |
626,265 |
581,812 |
||
Non-current liabilities: |
||||
Long-term loans |
72,604 |
114,109 |
||
Convertible senior notes |
291,800 |
291,365 |
||
Deferred tax liabilities, non-current |
118,180 |
126,641 |
||
Other non-current liabilities |
155,223 |
146,053 |
||
Total non-current liabilities |
637,807 |
678,168 |
||
Total Liabilities |
1,264,072 |
1,259,980 |
||
Equity: |
||||
Class A ordinary shares, par value Hong Kong Dollar ("HK$") 1 |
9,213
|
9,204
|
||
Class B ordinary shares, par value HK$1 per share, |
3,124
|
3,124
|
||
Treasure stock |
(136,615) |
(136,615) |
||
Additional paid-in capital |
505,980 |
500,666 |
||
Accumulated other comprehensive income |
17,070 |
137,630 |
||
Retained earnings |
345,117 |
225,574 |
||
Total Fang Holdings Limited shareholders' equity |
743,889 |
739,583 |
||
Non controlling interest |
692 |
692 |
||
Total equity |
744,581 |
740,275 |
||
TOTAL LIABILITIES AND EQUITY |
2,008,653 |
2,000,255 |
Condensed Consolidated Statements of Comprehensive Income |
||||
(in thousands of U.S. dollars, except share data and per share data) |
||||
Three months ended |
||||
March 31, |
March 31, |
|||
2018 |
2017 |
|||
Revenues: |
||||
Listing services |
26,738 |
34,043 |
||
Marketing services |
17,326 |
27,335 |
||
E-commerce services |
7,168 |
39,890 |
||
Financial services |
5,053 |
2,247 |
||
Other value-added services and other services |
6,546 |
6,288 |
||
Total revenues |
62,831 |
109,803 |
||
Cost of Revenues: |
||||
Cost of services |
(20,242) |
(60,726) |
||
Total Cost of Revenues |
(20,242) |
(60,726) |
||
Gross Profit |
42,589 |
49,077 |
||
Operating expenses and income: |
||||
Selling expenses |
(15,622) |
(23,411) |
||
General and administrative expenses |
(30,740) |
(31,383) |
||
Other loss |
(140) |
(403) |
||
Operating loss |
(3,913) |
(6,120) |
||
Foreign exchange (loss) / gain |
(3) |
213 |
||
Other-than-temporary impairment on equity securities |
- |
(951) |
||
Interest income |
2,645 |
2,724 |
||
Interest expense |
(5,485) |
(3,841) |
||
Investment income |
102 |
- |
||
Government grants |
215 |
767 |
||
Other non-operating loss |
(370) |
- |
||
Change in fair value of equity securities |
(42,243) |
- |
||
Loss before income taxes and noncontrolling interests |
(49,052) |
(7,208) |
||
Income tax benefit / (expenses) |
||||
Income tax benefit / (expenses) |
4,176 |
(4,809) |
||
Net loss |
(44,876) |
(12,017) |
||
Net income attributable to noncontrolling interests |
- |
- |
||
Net loss attributable to Fang Holdings Limited shareholders |
(44,876) |
(12,017) |
||
Other comprehensive income, net of tax |
||||
Foreign currency Translation |
41,963 |
3,119 |
||
Gain on intra-entity foreign transactions of long-term-investment |
1,262 |
- |
||
Unrealized gain on available-for-sale securities |
- |
513 |
||
Total other comprehensive income, net of tax |
43,225 |
3,632 |
||
Comprehensive loss |
(1,651) |
(8,385) |
||
Earnings per share for Class A and Class B ordinary shares |
||||
Basic |
(0.51) |
(0.14) |
||
Diluted |
(0.51) |
(0.14) |
||
Earnings per ADS |
||||
Basic |
(0.10) |
(0.03) |
||
Diluted |
(0.10) |
(0.03) |
||
Weighted average number of Class A and Class B ordinary shares outstanding: |
||||
Basic |
88,730,798 |
88,364,639 |
||
Diluted |
88,730,798 |
88,364,639 |
||
Weighted average number of ADSs outstanding: |
||||
Basic |
443,653,988 |
441,823,194 |
||
Diluted |
443,653,988 |
441,823,194 |
Fang 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, |
March 31, |
|||
2018 |
2017 |
|||
GAAP loss from operations |
(3,913) |
(6,120) |
||
Share-based compensation expense |
4,499 |
1,539 |
||
Non-GAAP income/(loss) from operations |
586 |
(4,581) |
||
GAAP net loss |
(44,876) |
(12,017) |
||
Share-based compensation expense |
4,499 |
1,539 |
||
Investment income |
(102) |
- |
||
Change in fair value of equity securities |
42,243 |
- |
||
Non-GAAP net income/(loss) |
1,764 |
(10,478) |
||
Net loss attributable to Fang shareholders |
(44,876) |
(12,017) |
||
Share-based compensation expense |
4,499 |
1,539 |
||
Investment income |
(102) |
- |
||
Change in fair value of equity securities |
42,243 |
- |
||
Non-GAAP net Income/(loss) attributable to Fang Holdings |
1,764 |
(10,478) |
||
GAAP earnings per share for Class A and Class B ordinary |
||||
Basic |
(0.51) |
(0.14) |
||
Diluted |
(0.51) |
(0.14) |
||
GAAP earnings per ADS: |
||||
Basic |
(0.10) |
(0.03) |
||
Diluted |
(0.10) |
(0.03) |
||
Non-GAAP earnings per share for Class A and Class B ordinary |
||||
Basic |
0.02 |
(0.12) |
||
Diluted |
0.02 |
(0.12) |
||
Non-GAAP earnings per ADS: |
||||
Basic |
0.00 |
(0.02) |
||
Diluted |
0.00 |
(0.02) |
||
Weighted average number of Class A and Class B ordinary |
||||
Basic |
88,730,798 |
88,364,639 |
||
Diluted |
88,730,798 |
88,364,639 |
||
Weighted average number of ADSs outstanding: |
||||
Basic |
443,653,988 |
441,823,194 |
||
Diluted |
443,653,988 |
441,823,194 |
||
GAAP Net loss |
(44,876) |
(12,017) |
||
Add back: |
||||
Share-based compensation expense |
4,499 |
1,539 |
||
Change in fair value of equity securities |
42,243 |
- |
||
Interest expense |
5,485 |
3,841 |
||
Depreciation expenses |
6,703 |
5,557 |
||
Subtract: |
||||
Investment income |
(102) |
- |
||
Interest income |
(2,645) |
(2,724) |
||
Income tax (benefit) / expenses |
(4,176) |
4,809 |
||
Adjusted EBITDA |
7,131 |
1,005 |
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