eLong Reports Fourth Quarter and Full Year 2009 Unaudited Financial Results
BEIJING, March 3 /PRNewswire-Asia/ -- eLong, Inc. (Nasdaq: LONG), a leading online travel service provider in China, today reported unaudited financial results for the fourth quarter and full year ended December 31, 2009.
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Highlights -- Fourth Quarter 2009
-- Total revenues for the fourth quarter increased 18% year-on-year to
RMB106.9 million and net revenues increased 18% year-on-year to
RMB100.9 million.
Total revenues by product were as follows (figures in RMB million):
Q4 % Q4 % Y/Y
2009 Total 2008 Total Growth
Hotel commissions 72.7 68% 67.9 75% 7%
Air ticketing
commissions 27.7 26% 19.3 21% 44%
Other 6.5 6% 3.8 4% 71%
Total revenues 106.9 100% 91.0 100% 18%
-- Operating income in the fourth quarter was RMB2.4 million compared to
operating loss of RMB10.3 million in the prior year period, driven
primarily by increased net revenues and a decrease in sales and
marketing expenses.
-- Net income in the fourth quarter was RMB1.0 million compared to net
loss of RMB8.2 million in the prior year period, driven primarily by an
increase of RMB12.6 million in operating income and a decrease of
RMB3.3 million in income tax expense, partially offset by an increase
of RMB1.8 million in foreign currency exchange losses and a decrease of
RMB5.0 million in interest income.
-- Cash and cash equivalents and short-term investments as of December 31,
2009 were RMB952.9 million (USD139.6 million).
Highlights -- Full Year 2009
-- Total revenues in 2009 increased 9% year-on-year to RMB379.5 million
and net revenues increased 9% year-on-year to RMB357.9 million.
Total revenues by product were as follows (figures in RMB million):
% % Y/Y
2009 Total 2008 Total Growth
Hotel commissions 256.8 68% 253.4 73% 1%
Air ticketing
commissions 96.0 25% 77.2 22% 24%
Other 26.7 7% 17.8 5% 50%
Total revenues 379.5 100% 348.4 100% 9%
-- Operating income in 2009 was RMB11.2 million compared to operating loss
of RMB41.7 million in the prior year, driven primarily by increased net
revenues and a decrease in sales and marketing expenses.
-- Net income in 2009 was RMB19.9 million compared to net loss of RMB76.6
million in the prior year, driven primarily by an increase of RMB52.9
million in operating income and a decrease of RMB60.4 million in
foreign currency exchange losses, partially offset by a decrease of
RMB16.1 million in interest income and an increase of RMB0.8 million in
income tax expense.
"The China State Council has made the travel industry a priority sector of the Chinese economy, which we believe improves the opportunities for eLong. Starting in 2010, we have quickened the pace of our product and service expansion and upgrades," said Guangfu Cui, Chief Executive Officer of eLong. "We launched dynamic packages, so that consumers can book hotel rooms and air tickets together as a package in order to save time and money. We have now contracted more than 10,000 domestic hotels and also offer over 100,000 hotels worldwide by connecting to Expedia, making eLong the largest online distributor in China in terms of hotels offered. And we upgraded our online international air booking technology in order to make booking international tickets on eLong as easy as booking domestic tickets."
"In the fourth quarter, we were able to achieve revenue growth of 18% year-on-year. This allowed us to deliver a profitable quarter and eLong's first profitable full year since 2006," said Mike Doyle, Chief Financial Officer of eLong.
Business Results
Hotel
Hotel commissions increased 7% for the fourth quarter of 2009 compared to the prior year quarter, primarily due to higher volume, which was partially offset by lower commission per room night. Commission per room night decreased 9% year-on-year primarily due to lower average daily rates, including an increase in the proportion of volume from budget hotels, partially offset by an increase in hotel commission rates. Room nights booked through eLong in the fourth quarter increased 18% year-on-year to 1.2 million.
Hotel commissions for full year 2009 increased 1% compared to 2008, primarily due to higher volume, which was partially offset by lower commission per room night. Commission per room night decreased 7% year-on-year primarily due to lower average daily rates, including an increase in the proportion of volume from budget hotels, partially offset by an increase in hotel commission rates. Room nights booked through eLong in 2009 increased 9% year-on-year to 4.3 million.
Air
Air ticketing commissions increased 44% for the fourth quarter of 2009 compared to the prior year quarter, driven by a 26% increase in air segments to 0.6 million and an increase in commission per segment. Commission per segment increased 14%, due to a 4% increase in average ticket price and an increase in air commission rates as compared to the same quarter of the prior year.
Air ticketing commissions for full year 2009 increased 24% compared to 2008, driven by a 23% increase in air segments to 2.2 million and an increase in commission per segment. Commission per segment increased 1%, due to a 2% increase in average ticket price, partially offset by a decrease in air commission rates compared to the prior year.
Profitability
Gross margin in the fourth quarter of 2009 and full year 2009 was 70% which was the same as the fourth quarter and full year 2008.
Operating expenses for the fourth quarter of 2009 and same period in 2008 were as follows (figures in RMB million):
Q4 % Net Q4 % Net Y/Y
2009 Revenues 2008 Revenues Growth
Service development 16.7 17% 12.4 14% 34%
Sales and marketing 38.0 38% 45.1 53% (16%)
General and
administrative 13.3 13% 12.0 14% 11%
Amortization of
intangible assets 0.2 -- 0.2 -- --
Charges related to
property and
equipment and
intangible assets 0.1 -- 0.8 1% (90%)
Total operating
expenses 68.3 68% 70.5 82% (3%)
Operating expenses for full year 2009 and 2008 were as follows (figures in
RMB million):
% Net % Net Y/Y
2009 Revenues 2008 Revenues Growth
Service development 58.1 16% 52.6 16% 11%
Sales and marketing 133.2 37% 163.5 50% (19%)
General and
administrative 47.7 14% 53.7 16% (11%)
Amortization of
intangible assets 0.6 -- 0.8 -- (23%)
Charges related to
property and
equipment and
intangible assets 0.1 -- 1.4 1% (95%)
Total operating
expenses 239.7 67% 272.0 83% (12%)
Total operating expenses decreased 3% for the fourth quarter of 2009 compared to the fourth quarter of 2008. Total operating expenses were 68% of net revenues, a decrease of 14 percentage points compared to the prior year quarter.
Total operating expenses decreased 12% for full year 2009 compared to 2008. Total operating expenses were 67% of net revenues, a decrease of 16 percentage points compared to 2008.
Service development expense consists of expenses related to technology and our product offering, including our websites, platforms, other system development and our supplier relations function. Service development expense increased 34% compared to the prior year quarter mainly driven by an increase in headcount. As a percentage of net revenues, service development increased from 14% a year ago to 17% in the fourth quarter of 2009.
Full year 2009 service development expense increased 11% over full year 2008 service development expense mainly driven by an increase in headcount, partially offset by a decrease in professional fees. Service development as a percentage of net revenues in 2009 was unchanged compared to 2008.
Sales and marketing expenses for the fourth quarter of 2009 decreased 16% over the prior year quarter, mainly driven by decreased marketing promotion expenses, labor costs and sales commissions. Sales and marketing expenses decreased to 38% of net revenues in the fourth quarter of 2009 from 53% in the same quarter of the prior year.
Sales and marketing expenses for full year 2009 decreased 19% over full year 2008, and decreased by 13 percentage points to 37% of net revenues when compared to 2008. The decrease was primarily driven by decreased marketing promotion expenses, labor costs and sales commissions.
General and administrative expenses for the fourth quarter of 2009 increased 11% compared to the prior year quarter, mainly driven by an increase in labor costs. General and administrative expenses decreased to 13% of net revenues in the fourth quarter of 2009 from 14% in the same quarter of the prior year.
General and administrative expenses for full year 2009 decreased 11% over full year 2008, primarily due to a decrease in professional fees and lower bad debt provisions, partially offset by an increase in labor costs. General and administrative expenses as a percentage of net revenues decreased by 2 percentage points to 14% in the full year 2009.
Other income (expenses), which represents interest income, foreign exchange gains/(losses) and other income/expense, was RMB1.2 million in the fourth quarter of 2009 compared to RMB8.0 million in the fourth quarter of 2008.
Other income (expenses) was RMB12.4 million in full year 2009 compared to other expenses of RMB31.9 million in 2008.
Net income for the fourth quarter of 2009 was RMB1.0 million, compared to net loss of RMB8.2 million during the prior year quarter.
Net income for full year 2009 was RMB19.9 million, compared to net loss of RMB76.6 million in 2008.
Net income per ADS and diluted net income per ADS for the fourth quarter of 2009 were RMB0.04, compared to net loss per ADS and diluted net loss per ADS of RMB0.34 in the prior year quarter.
Net income per ADS and diluted net income per ADS for full year 2009 were RMB0.84 and RMB0.80, compared to net loss per ADS and diluted net loss per ADS of RMB3.08 in 2008.
Business Outlook
eLong currently expects net revenues for the first quarter of 2010 to be within the range of RMB 86 million to RMB93 million, equal to an increase of 10% to 20% compared to the first quarter of 2009.
Non-GAAP Financial Measures
To supplement the financial measures calculated in accordance with generally accepted accounting principles in the United States, or GAAP, this press release includes certain non-GAAP financial measures including net income/(loss) per ADS, diluted net income/(loss) per ADS. The Company believes these non-GAAP financial measures are important to help investors understand the Company's current financial performance and future prospects and compare business trends among different reporting periods on a consistent basis. These non-GAAP financial measures should be considered in addition to financial measures presented in accordance with GAAP, but should not be considered as a substitute for, or superior to, financial measures presented in accordance with GAAP.
Safe Harbor Statement
It is currently expected that the Business Outlook will not be updated until the release of eLong's next quarterly earnings announcement; however, eLong reserves the right to update its Business Outlook at any time for any reason.
Statements in this press release concerning eLong's future business, operating results and financial condition are "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, and as defined in the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions as they related to the Company are intended to identify such forward-looking statements, but are not the exclusive means of doing so. These forward-looking statements are based upon management's current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are, by their nature, subject to a number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements as a result of a number of factors. Factors that could affect the Company's actual results and cause actual results to differ materially from those included in any forward-looking statement include, but are not limited to, eLong's operating losses, declines or disruptions in the travel industry, the international financial crisis, slowdown in the PRC economy, an outbreak of bird flu, H1N1 flu, SARS or other disease, eLong's reliance on having good relationships with hotel suppliers and airline ticket suppliers, our reliance on the Travelsky GDS system for our air business, the possibility that eLong will be unable to continue timely compliance with Section 404 or other requirements of the Sarbanes-Oxley Act, the risk that eLong will not be successful in competing against new and existing competitors, risks associated with Expedia, Inc.'s (Nasdaq: EXPE) majority ownership interest in eLong, fluctuations in the value of the Chinese currency, changes in eLong's management team and other key personnel, changes in third-party distribution partner relationships and other risks outlined in eLong's filings with the U.S. Securities and Exchange Commission (or SEC), including eLong's Annual Report on Form 20-F. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of their dates.
Conference Call
eLong will host a conference call to discuss its fourth quarter 2009 unaudited financial results on March 4, 2010 at 8:00 am Beijing time (March 3, 2010, 7:00 pm EST). The management team will be on the call to discuss the quarterly results and to answer questions. The toll-free number for U.S. participants is +1-866-844-9413. The dial-in number for Hong Kong participants is +852-3001-3802. International participants can dial +1-210-795-0512. Pass code: eLong.
A replay of the call will be available for one day between 8:30 pm EST on March 3, 2010 and 8:30 pm EST on March 4, 2010. The toll-free number for U.S. callers is +1-800-839-3119; the dial-in number for Hong Kong is +852-3018-4329, and the dial-in number for international callers is +1-203-369-4602. The pass code for the replay is 9629.
Additionally, an archived web cast of this call will be available on the Investor Relations section of the eLong web site at http://www.elong.net/AboutUs/conference.html for one year.
About eLong, Inc.
eLong, Inc. (NASDAQ: LONG) is a leading online travel company in China. Headquartered in Beijing, eLong has a national presence across China, and uses web-based distribution technologies and a 24-hour call center to provide consumers with accurate travel information and high quality travel booking services. Aiming to deliver value and a worry-free travel booking experience to leisure and business travelers, eLong empowers consumers to make informed decisions by providing convenient online and offline hotel and air ticket booking services as well as easy to use tools such as maps, destination guides, photographs, virtual tours and user reviews. In addition to a selection of more than 10,000 hotels in over 450 cities across China, eLong also offers consumers the ability to make bookings at over 100,000 international hotelsin more than 100 countries worldwide, and can fulfill domestic and international air ticket reservations in over 80 major cities across China.
eLong operates websites including http://www.elong.com , http://www.elong.net , and http://www.xici.net .
For further information, please contact:
eLong, Inc.
Investor Relations
Email: [email protected]
Tel: +86-10-6436-7570
eLong, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AND PER ADS AMOUNTS)
Three Months Ended
Dec. 31, Sep. 30, Dec. 31, Dec. 31,
2008 2009 2009 2009
RMB RMB RMB USD
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Revenues:
Hotel commissions 67,913 68,585 72,748 10,658
Air ticketing commissions 19,316 25,290 27,732 4,063
Other 3,773 9,319 6,458 946
Total revenues 91,002 103,194 106,938 15,667
Business tax and surcharges (5,302) (5,957) (6,032) (884)
Net revenues 85,700 97,237 100,906 14,783
Cost of services (25,473) (29,102) (30,203) (4,425)
Gross profit 60,227 68,135 70,703 10,358
Operating expenses:
Service development (12,401) (15,221) (16,676) (2,443)
Sales and marketing (45,100) (36,095) (38,071) (5,577)
General and administrative (12,032) (10,755) (13,342) (1,955)
Amortization of intangible
assets (197) (157) (182) (27)
Charges related to property and
equipment and intangible assets (753) -- (72) (10)
Total operating expenses (70,483) (62,228) (68,343) (10,012)
Income/(loss) from operations (10,256) 5,907 2,360 346
Other income (expenses):
Interest income 6,201 2,421 1,195 175
Foreign exchange gains/(losses) 1,723 (323) (93) (14)
Other 71 -- 111 16
Total other income (expenses),
net 7,995 2,098 1,213 177
Income/(loss) from operations
before income tax expense (2,261) 8,005 3,573 523
Income tax expense (5,940) (526) (2,608) (382)
Net income/(loss) (8,201) 7,479 965 141
Net income/(loss) per share (0.17) 0.16 0.02 0.003
Diluted net income/(loss) per
share (0.17) 0.15 0.02 0.003
Net income/(loss) per ADS* (0.34) 0.32 0.04 0.006
Diluted net income/(loss) per
ADS* (0.34) 0.30 0.04 0.006
Shares used in computing net
income/(loss) per share 48,076 47,199 47,289 47,289
Shares used in computing diluted
net income/(loss) per share 48,076 49,909 51,045 51,045
Note: 1 ADS = 2 shares
Share-based compensation charges
included in: 523 2,747 3,845 563
Cost of services (79) 214 321 47
Service development 37 909 1,136 166
Sales and marketing (151) 452 523 77
General and administrative 716 1,172 1,865 273
* Non-GAAP financial measures
Year Ended
Dec. 31, Dec. 31, Dec. 31,
2008 2009 2009
RMB RMB USD
(Unaudited) (Unaudited)
Revenues:
Hotel commissions 253,458 256,830 37,626
Air ticketing commissions 77,205 96,036 14,069
Other 17,763 26,666 3,907
Total revenues 348,426 379,532 55,602
Business tax and surcharges (21,113) (21,638) (3,170)
Net revenues 327,313 357,894 52,432
Cost of services (96,996) (106,935) (15,666)
Gross profit 230,317 250,959 36,766
Operating expenses:
Service development (52,584) (58,122) (8,515)
Sales and marketing (163,528) (133,195) (19,513)
General and administrative (53,652) (47,670) (6,984)
Amortization of intangible
assets (849) (653) (96)
Charges related to property and
equipment and intangible assets (1,385) (72) (10)
Total operating expenses (271,998) (239,712) (35,118)
Income/(loss) from operations (41,681) 11,247 1,648
Other income (expenses):
Interest income 29,020 12,880 1,887
Foreign exchange gains/(losses) (61,081) (709) (104)
Other 143 266 39
Total other income (expenses),
net (31,918) 12,437 1,822
Income/(loss) from operations
before income tax expense (73,599) 23,684 3,470
Income tax expense (2,994) (3,781) (554)
Net income/(loss) (76,593) 19,903 2,916
Net income/(loss) per share (1.54) 0.42 0.062
Diluted net income/(loss) per
share (1.54) 0.40 0.059
Net income/(loss) per ADS* (3.08) 0.84 0.124
Diluted net income/(loss) per
ADS* (3.08) 0.80 0.118
Shares used in computing net
income/(loss) per share 49,784 47,182 47,182
Shares used in computing diluted
net income/(loss) per share 49,784 49,973 49,973
Note: 1ADS = 2 shares
Share-based compensation charges
included in: 7,124 11,240 1,647
Cost of services 325 837 123
Service development 2,320 3,131 459
Sales and marketing 972 1,975 289
General and administrative 3,507 5,297 776
* Non-GAAP financial measures
Note 1: The conversions of Renminbi (RMB) into United States dollars
(USD) as at the reporting dates are based on the noon buying rate
of USD1.00=RMB6.8259 on December 31, 2009, USD1.00=RMB6.8262 on
September 30, 2009 and USD1.00=RMB6.8225 on December 31, 2008 in
the City of New York for cable transfers of Renminbi as certified
for customs purposes by the Federal Reserve. No representation is
made that the RMB amounts could have been, or could be, converted
or settled into U.S. dollars at the rates stated herein on the
reporting dates, at any other rates or at all.
eLong, Inc.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
Dec. 31, Dec. 31, Dec. 31,
2008 2009 2009
RMB RMB USD
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents 321,541 639,468 93,683
Short-term investments 635,810 313,467 45,923
Restricted cash -- 60,000 8,790
Accounts receivable, net 42,471 45,353 6,644
Due from related parties 518 321 47
Prepaid expenses 8,840 7,871 1,153
Other current assets 14,820 10,961 1,606
Total current assets 1,024,000 1,077,441 157,846
Property and equipment, net 52,484 44,005 6,447
Goodwill 30,000 31,950 4,681
Intangible assets, net 943 750 110
Other non-current assets 30,538 29,804 4,366
Total assets 1,137,965 1,183,950 173,450
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 34,146 41,905 6,139
Income taxes payable 1,152 2,908 426
Due to related parties 8,120 1,099 161
Accrued expenses and other
current liabilities 81,889 92,694 13,580
Total current liabilities 125,307 138,606 20,306
Other long-term liabilities 477 1,186 174
Deferred income taxes -- 658 96
Total liabilities 125,784 140,450 20,576
Shareholders' equity
Ordinary shares 4,221 4,242 622
Treasury Stock (103,393) (103,393) (15,147)
Additional paid-in capital 1,315,590 1,326,985 194,404
Accumulated deficit (204,237) (184,334) (27,005)
Total shareholders' equity 1,012,181 1,043,500 152,874
Total liabilities and
shareholders' equity 1,137,965 1,183,950 173,450
SOURCE eLong, Inc.
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