E-House Reports Fourth Quarter and Full Year 2014 Results and Declares Cash Dividend

SHANGHAI, March 18, 2015 /PRNewswire-FirstCall/ -- E-House (China) Holdings Limited ("E-House" or the "Company") (NYSE: EJ), a leading real estate services company in China, today announced its unaudited financial results for the fiscal quarter and full year ended December 31, 2014.

Fourth Quarter 2014 Highlights

• Total revenues increased by 22% year-on-year to $312.3 million

• Revenues from real estate online services increased by 36% year-on-year to $171.8 million, including $124.5 million in revenues from e-commerce services, which grew by 61% year-on-year
• Revenues from real estate information and consulting services increased by 30% year-on-year to $31.7 million
• Revenues from primary real estate agency services increased by  6% year-on-year to $95.0 million

• Non-GAAP[1] income from operations was $39.7 million; excluding spending of $11.7 million in new business units (community value-added services and real estate financial services) launched in 2014, non-GAAP income from operations was $51.5 million
• Non-GAAP net income attributable to E-House shareholders was $25.9 million, or $0.14 per diluted American depositary share ("ADS")

Full Year 2014 Financial Highlights

• Total revenues increased by 24% year-on-year to $904.5 million

• Revenues from real estate online services increased by 48% year-on-year to $495.9 million, including $326.7 million in revenues from e-commerce services, which grew by 92% year-on-year
• Revenues from real estate information and consulting services increased by 8% year-on-year to $82.7 million
• Revenues from primary real estate agency services increased by 2% year-on-year to $273.9 million

• Non-GAAP income from operations was $99.1 million; excluding spending of $19.9 million in new business units (community value-added services and real estate financial services) launched in 2014, non-GAAP income from operations was $119.0 million
• Non-GAAP net income attributable to E-House shareholders was $70.9 million, or $0.46 per diluted ADS

Xin Zhou, E-House's co-chairman and CEO, said, "We achieved strong revenue growth in 2014 despite overall weakness in China's real estate market. This was driven primarily by continued high growth of our online services unit Leju, which became a stand-alone public company in April 2014. In addition, our real estate information and consulting services and primary real estate agency services continued to grow as well in 2014, due to solid execution by our team."

Mr. Zhou continued, "While our existing business units continued to deliver solid growth, we launched two new business units in the second half of 2014 to broaden our service scope from serving mainly home buyers to home owners as well, and to help position our company for continued growth well into the future. The two new business units, community value-added services and real estate financial services, have seen very encouraging early results within the first several months of their operations and are reflective of the types of innovative products and services we aim to bring to our customers. Our real estate financial services peer-to-peer platform 'Fang Jin Suo' has introduced a variety of real estate-related financial products since its launch and has attracted over 14,000 individuals, resulting in over $47 million of transaction flows through the platform. Our mobile community services app 'Shi Hui' attracts significant mobile users by offering free products and services, mostly supplied by retailers and service providers, and has already grown its user base to more than 3.3 million, with approximately 390,000 daily active users. Retailers and service providers have found Shi Hui more effective in brand promotion than regular mobile ads due to active user engagement and participation. In addition, a portion of Shi Hui users are directed to the official websites of these retailers and service providers for additional opportunities to win free awards and discounts, driving increased online traffic to these websites. Due to the unique mobile marketing solutions Shi Hui provides, retailers and service providers have increased their activities on Shi Hui by providing nearly RMB4 billion (approximately US$650 million) worth of free offers and discounts. In addition, Shi Hui has also been used as a community social network app as it groups its users by their residential compounds, office buildings or schools. Because of Shi Hui's initial success, we expanded its operations from Shanghai and Beijing to a total of 10 cities as of the end of 2014 and expect to continue expanding into at least 50 cities in 2015. We believe both Shi Hui and Fang Jin Suo complement our existing services and will add new potential growth drivers to the company. Therefore, we plan to invest $200 million to $300 million in these new businesses during the next two years."

Bin Laurence, E-House's CFO, said, "We are very pleased that E-House achieved top-line growth in all of our existing business segments in 2014, despite a difficult real estate market with overall real estate transaction volume reductions. Our margins have been impacted by our spending on new business initiatives; yet, excluding the new business-related expenditures, we achieved profitability in both Leju and E-House's remaining businesses, as well as solid growth in operating income. Based on the initial results that we have seen, we believe the investments in our new businesses will create additional value for our shareholders. Furthermore, we continued to pay attractive dividends in the form of a special dividend which included both cash and shares in Leju in January 2015, and a cash dividend that we are announcing today."

Fourth Quarter 2014 Results

Total revenues were $312.3 million, an increase of 22% from $255.4 million for the same quarter of 2013, primarily driven by the growth of revenues from real estate online services.

Revenues from real estate online services were $171.8 million, an increase of 36% from $126.3 million for the same quarter of 2013, mainly contributed by the growth of revenues from e-commerce services. Revenues from e-commerce services were $124.5 million, an increase of 61% from $77.5 million for the same quarter of 2013, primarily due to a 28% increase in discount coupons redeemed (see "Selected Operating Data" below for more details on the discount coupons sold and redeemed). Revenues from online advertising services were $43.8 million, a slight increase from $43.2 million for the same quarter of 2013. Revenues from listing services were $3.5 million, compared to $5.6 million for the same quarter of 2013, primarily due to the slowdown in secondary home sales.

Revenues from real estate brokerage services were $97.8 million, an increase of 6% from $92.1 million for the same quarter of 2013. Real estate brokerage services include primary real estate agency services and secondary real estate brokerage services. Revenues from primary real estate agency services were $95.0 million, an increase of 6% from $89.2 million for the same quarter of 2013. The increase was caused by the increase of average commission rate, despite the slight decreases in the total gross floor area ("GFA") of new properties sold and the total transaction value of new properties sold compared to the same quarter of 2013. (See "Selected Operating Data" below for more details on the total GFA and transaction value of new properties sold.) Revenues from secondary real estate brokerage services were $2.8 million, which was relatively flat compared to $2.9 million for the same quarter of 2013.

Revenues from real estate information and consulting services were $31.7 million, an increase of 30% compared to $24.4 million for the same quarter of 2013, due to increased revenues in both information services and consulting services.

Revenues from other services were $11.0 million, a decrease of 12% from $12.6 million for the same quarter of 2013. Other services include offline real estate advertising services, promotional events services, real estate fund management services, community value-added services and real estate financial services. No material revenues were generated by the newly launched community value-added services and real estate financial services. The revenue decrease from other services in the fourth quarter was primarily due to the decrease in revenues from offline promotional events services.

Cost of revenues was $96.5 million, an increase of 16% from $83.2 million for the same quarter of 2013, primarily due to increased staff costs from primary real estate agency services, and increased consulting project costs from real estate information and consulting services, in line with the revenue increases.

Selling, general and administrative ("SG&A") expenses were $186.0 million, an increase of 36% from $136.3 million for the same quarter of 2013, primarily due to higher SG&A expenses for real estate online services, as well as $8.0 million in expenses related to community value-added services and $3.7 million in expenses related to real estate financial services, both of which commenced in the third quarter of 2014.

Income from operations was $30.5 million, a decrease of 20% from $38.0 million for the same quarter of 2013. Non-GAAP income from operations was $39.7 million, a decrease of 17% from $48.1 million for the same quarter of 2013. Excluding the expenses related to newly-launched community value-added services and real estate financial services, non-GAAP income from operations was $51.5 million.

Net income was $21.6 million, a decrease of 28% from $29.9 million for the same quarter of 2013. Non-GAAP net income was $31.2 million, a decrease of 14% from $36.5 million for the same quarter of 2013.

Net income attributable to E-House shareholders was $18.6 million, or $0.12 per diluted ADS, a decrease of 41% from $31.8 million, or $0.22 per diluted ADS, for the same quarter of 2013. Non-GAAP net income attributable to E-House shareholders was $25.9 million, or $0.14 per diluted ADS, a decrease of 32% from $38.3 million, or $0.26 per diluted ADS, for the same quarter of 2013.

Full Year 2014 Results

Total revenues were $904.5 million, an increase of 24% from $731.1 million for 2013, primarily driven by the growth of revenues from real estate online services and real estate information and consulting services.

Revenues from real estate online services were $495.9 million, an increase of 48% from $335.4 million for 2013, contributed by the growth of revenues from e-commerce and online advertising services. Revenues from e-commerce services were $326.7 million, an increase of 92% from $170.2 million for 2013, primarily due to a 61% increase in discount coupons redeemed (see "Selected Operating Data" below for more details on the discount coupons sold and redeemed). Revenues from online advertising services were $154.9 million, an increase of 7% from $145.4 million for 2013, due to growth in both the Company's new home and home furnishing channels. Revenues from listing services were $14.3 million, compared to $19.8 million for 2013, primarily due to the slowdown in secondary home sales.

Revenues from real estate brokerage services were $283.4 million, a slight increase from $280.8 million for 2013. Revenues from primary real estate agency services were $273.9 million, an increase of 2% from $269.6 million for 2013. Revenues from secondary real estate brokerage services were $9.5 million, a decrease of 15% from $11.2 million for 2013, due to the Company's decision to close unprofitable physical stores.

Revenues from real estate information and consulting services were $82.7 million, an increase of 8% from $76.7 million for 2013, mainly due to an increase in revenues from real estate information services.

Revenues from other services were $42.5 million, an increase of 11% from $38.2 million for 2013, primarily attributable to carried interest recognized from real estate fund management services of $5.4 million during the third quarter of 2014.

Cost of revenues was $306.1 million, an increase of 12% from $274.0 million for 2013, due to increased staff costs from primary real estate agency services, and increased consulting project costs from real estate information and consulting services, partially offset by the decrease of the fees paid to third parties for services in connection with the Company's online listing business, and the decrease of the amortization expenses of intangible assets.

SG&A expenses were $545.5 million, an increase of 36% from $400.9 million for 2013, primarily due to higher SG&A expenses for real estate online services, as well as $15.8 million in expenses related to community value-added services and $3.9 million in expenses related to real estate financial services, both of which commenced in the third quarter of 2014.

Income from operations was $61.7 million, a slight increase from $61.0 million for 2013. Non-GAAP income from operations was $99.1 million, a decrease of 3% from $102.5 million for 2013. Excluding the expenses related to newly-launched community value-added services and real estate financial services, non-GAAP income from operations was $119.0 million.

Net income was $52.3 million, an increase of 2% from $51.1 million for 2013. Non-GAAP net income was $88.0 million, an increase of 4% from $84.9 million for 2013.

Net income attributable to E-House shareholders was $40.0 million, or $0.26 per diluted ADS, a decrease of 23% from $52.0 million, or $0.38 per diluted ADS, for 2013. Non-GAAP net income attributable to E-House shareholders was $70.9 million, or $0.46 per diluted ADS, a decrease of 17% from $85.4 million, or $0.63 per diluted ADS, for 2013.

Cash Flow

As of December 31, 2014, the Company's cash and cash equivalents balance was $630.6 million.

Fourth quarter 2014 net cash provided by operating activities was $42.2 million, mainly attributable to non-GAAP net income of $31.2 million, as well as increases in accrued payroll and welfare of $39.9 million, an increase in income tax payables and other tax payables of $26.4 million and a decrease in customer deposits of $22.5 million, offset by an increase in accounts receivable of $39.2 million and an increase in restricted cash of $38.6 million. Net cash used in investing activities was $17.3 million, mainly comprised of $15.2 million in capital expenditures, and $5.9 million prepayment for business acquisition, partially offset by the collection of short-term investment of $1.3 million and proceeds from the disposal of property and equipment of $2.3 million. Net cash provided by financing activities was $18.1 million, mainly comprised of $36.0 million cash received from short-term loan, partially offset by $15.5 million in dividends paid to shareholders and $2.2 million paid for the acquisition of the remaining non-controlling interests in the Company's online business.

Declaration of Cash Dividend

E-House announced today that its board of directors had authorized and approved the Company's payment of a cash dividend of $0.15 per ordinary share ($0.15 per ADS). The cash dividend will be payable on or about May 15, 2015 to shareholders of record as of the close of business on April 10, 2015. Dividends to be paid to the Company's ADS holders through the depositary bank will be subject to the terms of the deposit agreement, including the fees and expenses payable thereunder.

Business Outlook

The Company estimates that its fiscal 2015 total revenues will be approximately $1.05 billion to $1.10 billion, which would represent an increase of approximately 16% to 22% from $904.5 million in 2014. This forecast reflects the Company's current and preliminary view, which is subject to change.

Conference Call Information

E-House's management will host an earnings conference call on March 18, 2015 at 8:15 a.m. U.S. Eastern Time (8:15 p.m. Beijing/Hong Kong time).

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

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is "E-House earnings call."

A replay of the conference call may be accessed by phone at the following number until March 25, 2015:

Additionally, a live and archived webcast will be available at http://ir.ehousechina.com.

About E-House

E-House (China) Holdings Limited ("E-House") (NYSE: EJ) is China's leading real estate services company with a nationwide network covering more than 250 cities. E-House offers a wide range of services to the real estate industry, including real estate online services through our 70%-owned subsidiary, Leju Holdings Limited (NYSE: LEJU), primary sales agency, secondary brokerage, information and consulting, offline advertising and promotion, real estate investment management and financial services, and community value-added services. E-House has received numerous awards for its innovative and high-quality services, including "China's Best Company" from the National Association of Real Estate Brokerage and Appraisal Companies and "China Enterprises with the Best Potential" from Forbes. For more information about E-House, please visit http://www.ehousechina.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 "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "may," "intend," "confident," "is currently reviewing," "it is possible," "subject to" and similar statements. Among other things, the Business Outlook section and quotations from management in this press release, as well as E-House's strategic and operational plans, contain forward-looking statements. E-House may also make written or oral forward-looking statements in its reports filed or furnished with the U.S. Securities and Exchange Commission, including Forms 20-F and 6-K, 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 E-House's beliefs and expectations, are forward-looking statements and are subject to change. 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, E-House'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 E-House's brand or image, E-House's inability to successfully execute its strategy of expanding into new geographical markets in China, E-House's failure to manage its growth effectively and efficiently, E-House's failure to successfully execute the business plans for its strategic alliances and other new business initiatives, E-House'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, E-House's failure to compete successfully, fluctuations in E-House's results of operations and cash flows, E-House's reliance on a concentrated number of real estate developers, natural disasters or outbreaks of health epidemics and other risks outlined in E-House'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 E-House does not undertake any obligation to update any such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement E-House's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), E-House uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to E-House shareholders, (4) net income (loss) attributable to E-House shareholders per basic ADS, and (5) net income (loss) attributable to E-House shareholders per diluted ADS, each of which excludes share-based compensation expense and amortization of intangible assets resulting from business acquisitions. 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 "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

E-House believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expense and amortization of intangible assets resulting from business acquisitions, , which may not be indicative of E-House's operating performance. These non-GAAP financial measures also facilitate management's internal comparisons to E-House'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 expense and amortization of intangible assets resulting from business acquisitions that may continue to exist in E-House'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 comparable GAAP financial measures.

For investor and media inquiries please contact:

Ms. Michelle Yuan
Director of Investor Relations
E-House (China) Holdings Limited
Phone: +86 (21) 6133-0754
E-mail: [email protected]

Mr. Derek Mitchell
Ogilvy Financial
In the U.S.: +1 (646) 867-1888
In China: +86 (10) 8520-6139
E-mail: [email protected]

SOURCE E-House (China) Holdings Limited

Related Links

http://www.ehousechina.com

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