BEIJING, May 6, 2014 /PRNewswire/ -- Autohome Inc. (NYSE: ATHM) ("Autohome" or the "Company"), the leading online destination for automobile consumers in China, today announced its unaudited financial results for the first quarter ended March 31, 2014.
First Quarter 2014 Financial Highlights[1]
[1] The reporting currency of the Company is Renminbi ("RMB"). For the convenience of the reader, certain amounts throughout the release are presented in US dollars ("$"). Unless otherwise noted, all conversions from RMB to US$ are translated at the noon buying rate of US$1.00 to RMB6.2164 on March 31, 2014 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
First Quarter 2014 Operating Highlights
Recent Developments
James Qin, Chief Executive Officer, stated, "We are pleased with our strong first quarter results which were in line with our initial expectations. We continued to drive high double digit increases in both net revenues and net income, reflecting our ability to consistently leverage and benefit from our market position as the leading online destination for automobile consumers in China."
"Importantly, during the quarter we made solid additional progress with our stated growth strategies to expand our advertising offerings to capture increased share of wallet from automakers, further extend and monetize our dealer network, expand our offerings on our mobile and services platforms to enhance the user experience, and build out our offering in the aftermarket and used car sectors. We are particularly encouraged to record strong growth in dealer subscribers and in advertising revenues from both automakers and dealers. We continue to gain market share in online advertising spending as our customers continue to benefit from our unrivalled access to potential car buyers and proven strength in generating sales leads."
"Our continued strength in terms of traffic demonstrates how our strong professionally-generated content and, in particular, our valuable user-generated content are driving improved user engagement. Furthermore, we are encouraged that our efforts to expand our dealership platform, and our proven capability in generating leads and conversions, are translating into growth in our automaker and dealer customer base. The success of our recently concluded April 15 online promotion event, as well as our November 11 promotion last year, highlights the transaction value that we bring to our customers."
"Given a positive start to the year, our continued progress in realizing our growth strategies, and auto and online advertising industry trends that are in our favor, we are optimistic about the remainder of the year and our ability to continue to drive positive results."
Nicholas Chong, Chief Financial Officer, commented, "Our financial results for the first quarter highlight three very important areas of operating and financial strength in Autohome's business. We are able to drive rapid revenue growth via a diversified revenue mix, deliver strong profitability thanks to robust top line growth and an efficient cost base, and consistently generate significant cash flows to maintain a healthy cash balance and fund our important growth strategies. Due to this broad-based strength, we have a durable foundation in place and this will support us as we work to grow our market share and continue to build the business."
Detailed Overview of Financial Results for First Quarter 2014
Key Financial Results
(In RMB Millions except for per share data) | 1Q2013 | 1Q2014 | % Change |
Net Revenues | 204.4 | 342.0 | 67.3% |
Operating Profit | 92.0 | 148.3 | 61.2% |
Net Income | 75.0 | 121.9 | 62.5% |
Adjusted Net Income[2] | 83.0 | 136.9 | 65.0% |
Diluted Earnings Per Share[3] | 0.74 | 1.08 | 45.9% |
Net Cash Provided by Operating Activities | 128.9 | 250.7 | 94.5% |
[2] Adjusted net income is defined as net income excluding share-based compensation expenses and amortization expenses of intangible assets related to acquisitions. For more information on these non-GAAP financial measures, please see the section captioned "Use of Non-GAAP Financial Measures" and the tables captioned "Reconciliations of Non-GAAP and GAAP Results" set forth at the end of this release. |
[3] Each ordinary share equals one ADS. |
Unaudited First Quarter 2014 Financial Results
Net Revenues
Net revenues for the first quarter of 2014 increased 67.3% to RMB342.0 million ($55.0 million) from RMB204.4 million in the corresponding period in 2013. The increase was due to increases in both the Company's advertising services revenues and dealer subscription services revenues.
The increase in revenues from automaker advertisers was attributable to an increase in average revenues per automaker advertiser as automakers continued to allocate more advertising budgets to Autohome's online advertising channels. The increase in dealer advertising services revenues was mainly due to an increase in the volume of advertising purchased by dealer advertisers as a result of the Company's expansion into new geographical markets and deeper penetration into existing markets, together with an increase in the rates for the Company's dealer advertising services.
Cost of Revenues
Cost of revenues for the first quarter of 2014 increased 64.6% to RMB68.4 million ($11.0 million) from RMB41.6 million in the corresponding period in 2013, primarily due to increases in value-added taxes and surcharges, content related costs, bandwidth and IDC costs and depreciation. The cost of revenues included share-based compensation expense of RMB1.7 million ($0.3 million) and RMB1.6 million for the first quarter of 2014 and 2013, respectively.
Operating Expenses
Operating expenses for the first quarter of 2014 increased 76.9% to RMB125.3 million ($20.2 million) from RMB70.8 million in the corresponding period in 2013, mainly due to increases in sales and marketing expenses, general and administrative expenses and product development expenses. As a percentage of net revenues, operating expenses for the first quarter of 2014 increased to 36.6% from 34.7% in the corresponding period in 2013.
Operating Profit
Operating profit for the first quarter of 2014 increased 61.2% to RMB148.3 million ($23.9 million) from RMB92.0 million in the corresponding period in 2013.
Net Income and EPS
Net income for the first quarter of 2014 increased 62.5% to RMB121.9 million ($19.6 million) from RMB75.0 million in the corresponding period in 2013. Basic and diluted earnings per share and per ADS ("EPS") for the first quarter of 2014 were RMB1.16 ($0.19) and RMB1.08 ($0.17), respectively, compared to basic and diluted EPS in the corresponding period in 2013 of RMB0.75 and RMB0.74, respectively.
Adjusted Net Income and Non-GAAP EPS
Adjusted net income, defined as net income excluding share-based compensation expenses and amortization expenses of intangible assets related to acquisitions, for the first quarter of 2014 increased 65.0% to RMB136.9 million ($22.0 million) from RMB83.0 million in the corresponding period in 2013. Non-GAAP basic and diluted EPS for the first quarter of 2014 were RMB1.30 ($0.21) and RMB1.22 ($0.20), respectively, compared to Non-GAAP basic and diluted EPS in the corresponding period in 2013 of RMB0.83 and RMB0.82, respectively.
Balance Sheet and Cash Flow
As of March 31, 2014, the Company had cash and cash equivalents and short term investments of RMB 1,403.3 million ($225.7 million). Net cash provided by operating activities in the first quarter of 2014 was RMB250.7 million ($40.3 million), compared to RMB128.9 million in the corresponding period in 2013.
Business Outlook
Autohome currently expects to generate net revenues in the range of RMB472.0 million ($75.9 million) to RMB493.0 million ($79.3 million) in the second quarter of fiscal year 2014, representing a 60.0% to 67.1% year-over-year increase.
These forecasts reflect the Company's current and preliminary view on the market and operating conditions, which are subject to change.
Conference Call Information
The Company will hold an earnings conference call at 8:00 AM on Tuesday, May 6, 2014, U.S. Eastern Time (8:00 PM on Tuesday, May 6, 2014, Beijing/Hong Kong Time).
Dial-in details for the earnings conference call are as follows:
United States: | +1-855-298-3404 |
Hong Kong: | +852-5808-3202 |
China Domestic: | 400-120-0539 |
United Kingdom: | 0800-015-9725 |
International: | +1-631-514-2526 |
Please dial in ten minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is 6776632.
A replay of the conference call may be accessed by phone at the following numbers until May 13, 2014:
United States: | +1-866-846-0868 |
International: | +61-2-9641-7900 |
Passcode: | 6776632 |
Additionally, a live and archived webcast of the conference call will be available at http://ir.autohome.com.cn.
About Autohome Inc.
Autohome Inc. (NYSE: ATHM) is the leading online destination for automobile consumers in China. Through its two websites, autohome.com.cn and che168.com, the Company provides comprehensive, independent and interactive content to automobile buyers and owners. Autohome.com.cn ranked first among China's automotive websites and automotive channels of internet portals in terms of average daily unique visitors, average daily time spent per user and average daily page views in 2013, according to iResearch, a third-party research firm. The Company's ability to reach a large and engaged user base of automobile consumers has made Autohome the preferred platform for automakers and dealers to conduct their advertising campaigns. Automakers typically utilize its online advertising services for brand promotion, new model releases and sales promotions. Its dealer subscription services allow dealers to market their inventory and services through Autohome's websites, extending the reach of their physical showrooms to potentially millions of internet users in China. For further information, please visit www.autohome.com.cn.
Safe Harbor Statement
This press release contains statements that may constitute "forward-looking" statements pursuant to 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" and similar statements. Among other things, Autohome's business outlook, Autohome's strategic and operational plans and quotations from management in this announcement contain forward-looking statements. Autohome may also make written or oral forward-looking statements in its periodic reports to the Securities and Exchange Commission ("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. Statements that are not historical facts, including statements about Autohome's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Autohome's goals and strategies; Autohome's future business development, results of operations and financial condition; the expected growth of the online automobile advertising market in China; Autohome's ability to attract and retain users and advertisers and further enhance its brand recognition; Autohome's expectations regarding demand for and market acceptance of its products and services; competition in the online automobile advertising industry; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Autohome's filings with the SEC. All information provided in this press release is as of the date of this press release, and Autohome does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
Use of Non-GAAP Financial Measures
To supplement net income presented in accordance with U.S. GAAP, we use Adjusted Net Income, Non-GAAP basic and diluted EPS and Adjusted EBITDA as non-GAAP financial measures. We define Adjusted Net Income as net income excluding share-based compensation expenses and amortization expenses of intangible assets related to acquisitions. We define Non-GAAP basic and diluted EPS as Adjusted Net Income divided by the basic and diluted weighted average number of ordinary shares. We define Adjusted EBITDA as net income before income tax expense, depreciation expenses of property and equipment and amortization expenses of intangible assets and interest expense, excluding share-based compensation expenses. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance, in addition to net income prepared in accordance with U.S. GAAP. We believe these non-GAAP financial measures are important to help investors understand our operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess our core operating results, as they exclude certain expenses that are not expected to result in cash payments. The use of the above non-GAAP financial measures has certain limitations. Share-based compensation expenses have been and will continue to be incurred in the future and are not reflected in the presentation of the non-GAAP financial measures, but should be considered in the overall evaluation of our results. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliation of non-GAAP and GAAP Results" set forth at the end of this press release.
For investor and media inquiries, please contact:
Xu Wei
Investor Relations
Autohome Inc.
Tel: +86-10-5985-7017
Email: ir@autohome.com.cn
Cara O'Brien
FTI Consulting, Inc.
Tel: +852-3768-4537
Email: cara.obrien@fticonsulting.com
Martin Reidy
FTI Consulting, Inc.
Tel: +86-10-8591-1060
Email: martin.reidy@fticonsulting.com
AUTOHOME INC. | |||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||
(Amount in thousands, except per share data) | |||||
For three months ended March 31, | |||||
2013 | 2014 | ||||
RMB | RMB | US$ | |||
(Unaudited) | (Unaudited) | (Unaudited) | |||
Net revenues: | |||||
Advertising services | 148,803 | 225,920 | 36,343 | ||
Dealer subscription services | 55,553 | 116,067 | 18,671 | ||
Total net revenues | 204,356 | 341,987 | 55,014 | ||
Cost of revenues | (41,557) | (68,416) | (11,006) | ||
Gross profit | 162,799 | 273,571 | 44,008 | ||
Operating expenses: | |||||
Sales and marketing expenses | (37,014) | (66,405) | (10,682) | ||
General and administrative expenses | (17,919) | (29,528) | (4,750) | ||
Product development expenses | (15,881) | (29,353) | (4,722) | ||
Operating profit | 91,985 | 148,285 | 23,854 | ||
Interest income | 2,703 | 5,624 | 905 | ||
Other expenses | (3) | (53) | (9) | ||
Income before income taxes | 94,685 | 153,856 | 24,750 | ||
Income tax expense | (19,674) | (31,941) | (5,138) | ||
Net income | 75,011 | 121,915 | 19,612 | ||
Earnings per share for ordinary share | |||||
Basic | 0.75 | 1.16 | 0.19 | ||
Diluted | 0.74 | 1.08 | 0.17 | ||
Shares used in earnings per share computation: | |||||
Ordinary shares: | |||||
Basic | 100,000,000 | - | - | ||
Diluted | 100,693,204 | - | - | ||
Class A ordinary shares | |||||
Basic | - | 36,347,496 | 36,347,496 | ||
Diluted | - | 112,445,199 | 112,445,199 | ||
Class B ordinary shares | |||||
Basic | - | 68,788,940 | 68,788,940 | ||
Diluted | - | 68,788,940 | 68,788,940 | ||
Other comprehensive income, net of tax of nil | |||||
Foreign currency translation adjustments | 124 | 6,303 | 1,014 | ||
Comprehensive income | 75,135 | 128,218 | 20,626 |
| |||||
RECONCILIATION OF NON-GAAP AND GAAP RESULTS | |||||
(Amount in thousands, except per share data) | |||||
For three months ended March 31, | |||||
2013 | 2014 | ||||
RMB | RMB | US$ | |||
(Unaudited) | (Unaudited) | (Unaudited) | |||
Net income | 75,011 | 121,915 | 19,612 | ||
Plus: income tax expense | 19,674 | 31,941 | 5,138 | ||
Plus: depreciation of property and equipment | 5,263 | 7,868 | 1,266 | ||
Plus: amortization of intangible assets | 1,707 | 1,584 | 255 | ||
EBITDA | 101,655 | 163,308 | 26,271 | ||
Plus: share-based compensation | 6,372 | 13,842 | 2,227 | ||
Adjusted EBITDA | 108,027 | 177,150 | 28,498 | ||
Net income | 75,011 | 121,915 | 19,612 | ||
Plus: amortization of acquired intangible assets of Cheerbright, | 1,591 | 1,138 | 183 | ||
Plus: share-based compensation expenses | 6,372 | 13,842 | 2,227 | ||
Adjusted Net Income | 82,974 | 136,895 | 22,022 | ||
Non-GAAP Earnings per share for ordinary share | |||||
Basic | 0.83 | 1.30 | 0.21 | ||
Diluted | 0.82 | 1.22 | 0.20 | ||
Shares used in earnings per share computation: | |||||
Ordinary shares: | |||||
Basic | 100,000,000 | - | - | ||
Diluted | 100,693,204 | - | - | ||
Class A ordinary shares | |||||
Basic | - | 36,347,496 | 36,347,496 | ||
Diluted | - | 112,445,199 | 112,445,199 | ||
Class B ordinary shares | |||||
Basic | - | 68,788,940 | 68,788,940 | ||
Diluted | - | 68,788,940 | 68,788,940 |
| ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(Amount in thousands, except as noted) | ||||||
As of December 31, | As of March 31, | |||||
2013 | 2014 | |||||
RMB | RMB | US$ | ||||
(Audited) | (Unaudited) | (Unaudited) | ||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | 1,138,613 | 1,353,355 | 217,707 | |||
Restricted cash | 245,000 | - | - | |||
Short-term investment | - | 49,990 | 8,042 | |||
Accounts receivable | 465,712 | 380,457 | 61,202 | |||
Other current assets | 49,940 | 71,133 | 11,443 | |||
Total current assets | 1,899,265 | 1,854,935 | 298,394 | |||
Non-current assets: | ||||||
Property and equipment, net | 57,897 | 57,265 | 9,212 | |||
Goodwill and Intangible assets, net | 1,549,639 | 1,548,149 | 249,042 | |||
Other non-current assets | 6,149 | 13,429 | 2,160 | |||
Total non-current assets | 1,613,685 | 1,618,843 | 260,414 | |||
Total assets | 3,512,950 | 3,473,778 | 558,808 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accrued expenses and other payables | 324,094 | 271,602 | 43,691 | |||
Deferred revenue | 215,580 | 293,428 | 47,202 | |||
Income tax payable | 20,204 | 39,639 | 6,377 | |||
Payable for repurchase of common stock | 227,015 | - | - | |||
Other current liabilities | 2,925 | 150 | 24 | |||
Total current liabilities | 789,818 | 604,819 | 97,294 | |||
Non-current liabilities: | ||||||
Other liabilities | 29,041 | 29,041 | 4,672 | |||
Deferred tax liabilities | 481,727 | 485,494 | 78,099 | |||
Total non-current liabilities | 510,768 | 514,535 | 82,771 | |||
Total liabilities | 1,300,586 | 1,119,354 | 180,065 | |||
Shareholders' equity: | ||||||
Total shareholders' equity | 2,212,364 | 2,354,424 | 378,743 | |||
Total liabilities and shareholders' equity | 3,512,950 | 3,473,778 | 558,808 |