BEIJING, November 5, 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 third quarter ended September 30, 2014.
Third 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$1.00 to RMB6.1380 on September 30, 2014 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
Third Quarter 2014 Operating Highlights
James Qin, Chief Executive Officer of Autohome, stated, "We are extremely pleased to deliver a strong set of quarterly results which again proves the strength of both our media and transaction platform value. We exceeded our expectations for the top line and recorded healthy profits and cash flow, making this the fourth consecutive quarter as a public company where we have achieved such strong financial performance."
"Importantly, many of our strategic initiatives are delivering positive results and leading to outstanding business performance overall," continued Mr. Qin. "For instance, we had the fastest growing dealer network in the industry in China and drove significant increases in both volume and ARPU during the third quarter. Also, we were excited to see strong mobile traffic trends this quarter, indicating we are successfully transforming from being a PC oriented business into both a mobile and PC oriented business able to serve our business partners and customers in a number of ways. In addition, our online transaction platform, Autohome Mall, has continued to mature effectively, with our various trials facilitating more than 7,000 transactions involving 205 car models from 57 car brands during the third quarter. Lastly, in the effort to cultivate loyalty we are constantly looking to enhance user engagement features and in September 2014 the number of page views in our "user reviews" section achieved a new milestone in traffic and participation, nearly tripling the results in September last year. The "user reviews" section allows users to provide ratings on different aspects of car models is proving very useful to potential car buyers. We view this as a very meaningful product to help close the transaction loop in our platform."
"In short, we are consistently identifying ways to leverage and further strengthen our market leadership position and are focused on investing for long-term growth. We are confident that this positions us well for continued success and are excited about what the future will bring," concluded Mr. Qin.
Nicholas Chong, Chief Financial Officer, commented, "We believe that our strong results over the last several quarters proved that we are a market leader, delivering what is among the strongest top line growth, healthiest margins, and best cash flow in our industry in China. Our consistent and strong performance is driven by rapidly growing demand for our products and services as well as strong performance across all aspects of our business. It is clear that we are benefiting from our diversified strategies. With a strong business foundation and sufficient cash generated from operating activities, we are well positioned to continue to invest in our growth and meet our near and long-term strategic goals."
Detailed Overview of Financial Results for Third Quarter 2014
Key Financial Results
(In RMB Millions except for per share data) | 3Q 2013 | 3Q 2014 | % Change |
Net Revenues | 331.2 | 545.1 | 64.6% |
Operating Profit | 167.5 | 201.6 | 20.3% |
Net Income | 136.2 | 170.9 | 25.5% |
Adjusted Net Income[2] | 141.5 | 183.9 | 30.0% |
Diluted Earnings Per Share[3] | 1.34 | 1.52 | 13.4% |
Net Cash Provided by Operating Activities | 85.9 | 122.8 | 43.0% |
[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 Third Quarter 2014 Financial Results
Net Revenues
Net revenues for the third quarter of 2014 increased 64.6% to RMB545.1 million ($88.8 million) from RMB331.2 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.
Cost of Revenues
Cost of revenues for the third quarter of 2014 increased 48.6% to RMB96.7 million ($15.7 million) from RMB65.0 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 third quarter of 2014 and 2013, respectively.
Operating Expenses
Operating expenses for the third quarter of 2014 increased 150.2% to RMB246.8 million ($40.2 million) from RMB98.7 million in the corresponding period in 2013. It was due to increases in sales and marketing expenses, product development expenses and general and administrative expenses as the Company has been reinvesting for future growth opportunities. As a percentage of net revenues, operating expenses for the third quarter of 2014 increased to 45.3% from 29.8% in the corresponding period in 2013.
Operating Profit
Operating profit for the third quarter of 2014 increased 20.3% to RMB201.6 million ($32.8 million) from RMB167.5 million in the corresponding period in 2013.
Net Income and EPS
Net income for the third quarter of 2014 increased 25.5% to RMB170.9 million ($27.8 million) from RMB136.2 million in the corresponding period in 2013. Basic and diluted earnings per share and per ADS ("EPS") for the third quarter of 2014 were RMB1.59 ($0.26) and RMB1.52 ($0.25), respectively, compared to basic and diluted EPS in the corresponding period in 2013 of RMB 1.36 and RMB 1.34, 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 third quarter of 2014 increased 30.0% to RMB183.9 million ($30.0 million) from RMB141.5 million in the corresponding period in 2013. Non-GAAP basic and diluted EPS for the third quarter of 2014 were RMB1.71 ($0.28) and RMB1.63 ($0.27), respectively, compared to Non-GAAP basic and diluted EPS in the corresponding period in 2013 of RMB1.42 and RMB1.40, respectively.
Balance Sheet and Cash Flow
As of September 30, 2014, the Company had cash and cash equivalents and term deposits of RMB1,710.1 million ($278.6 million). Net cash provided by operating activities in the third quarter of 2014 was RMB122.8 million ($20.0 million), compared to RMB85.9 million in the corresponding period in 2013.
Recent Developments
Business Outlook
Autohome currently expects to generate net revenues in the range of RMB610 million ($99.4 million) to RMB636 million ($103.6 million) in the fourth quarter of fiscal year 2014, representing a 58.0% to 64.8% 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 Wednesday, November 5, 2014, U.S. Eastern Time (9:00 PM on Wednesday, November 5, 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 3296876.
A replay of the conference call may be accessed by phone at the following numbers until November 12, 2014:
United States: +1-866-846-0868
International: +61-2-9641-7900
Passcode: 3296876
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:
Edith Kwan
Investor Relations
Autohome Inc.
Tel: +86-10-5987-1535
Email: ir@autohome.com.cn
Cara O'Brien
FTI Consulting, Inc.
Tel: +852-3768-4537
Email: cara.obrien@fticonsulting.com
AUTOHOME INC. | |||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||
(Amount in thousands, except per share data) | |||||
For three months ended September 30, | |||||
2013 | 2014 | ||||
RMB | RMB | US$ | |||
(Unaudited) | (Unaudited) | (Unaudited) | |||
Net revenues: | |||||
Advertising services | 241,260 | 385,672 | 62,833 | ||
Dealer subscription services | 89,975 | 159,394 | 25,968 | ||
Total net revenues | 331,235 | 545,066 | 88,801 | ||
Cost of revenues | (65,037) | (96,663) | (15,748) | ||
Gross profit | 266,198 | 448,403 | 73,053 | ||
Operating expenses: | |||||
Sales and marketing expenses | (57,242) | (177,354) | (28,894) | ||
General and administrative expenses | (19,123) | (27,545) | (4,488) | ||
Product development expenses | (22,293) | (41,918) | (6,829) | ||
Operating profit | 167,540 |
201,586 | 32,842 | ||
Interest income | 2,115 | 9,813 | 1,599 | ||
Interest expense | (12) | - | - | ||
Other income | 63 | 955 | 156 | ||
Income before income taxes | 169,706 | 212,354 | 34,597 | ||
Income tax expense | (33,481) | (41,448) | (6,753) | ||
Net income | 136,225 | 170,906 | 27,844 | ||
Earnings per share for ordinary share | |||||
Basic | 1.36 | 1.59 | 0.26 | ||
Diluted | 1.34 | 1.52 | 0.25 | ||
Ordinary shares: | |||||
Basic | 100,000,000 | - | - | ||
Diluted | 101,309,021 | - | - | ||
Class A ordinary shares | |||||
Basic | - | 38,501,316 | 38,501,316 | ||
Diluted | - | 112,740,044 | 112,740,044 | ||
Class B ordinary shares | |||||
Basic | - | 68,788,940 | 68,788,940 | ||
Diluted | - | 68,788,940 | 68,788,940 | ||
Other comprehensive loss, net of tax of nil | |||||
Foreign currency translation adjustments | (16) | (134) | (22) | ||
Comprehensive income | 136,209 | 170,772 | 27,822 |
AUTOHOME INC. | |||||||
RECONCILIATION OF NON-GAAP AND GAAP RESULTS | |||||||
(Amount in thousands, except per share data) | |||||||
For three months ended September 30, | |||||||
2013 | 2014 | ||||||
RMB | RMB | US$ | |||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||
Net income | 136,225 | 170,906 | 27,844 | ||||
Plus: income tax expense | 33,481 | 41,448 | 6,753 | ||||
Plus: depreciation of property and equipment | 6,924 | 9,144 | 1,490 | ||||
Plus: amortization of intangible assets | 1,255 | 1,477 | 241 | ||||
Plus: interest expense | 12 | - | - | ||||
EBITDA | 177,897 | 222,975 | 36,328 | ||||
Plus: share-based compensation expenses | 4,170 | 11,885 | 1,936 | ||||
Adjusted EBITDA | 182,067 | 234,860 | 38,264 | ||||
Net income | 136,225 | 170,906 | 27,844 | ||||
Plus: amortization of acquired intangible assets of Cheerbright, China Topside and Norstar | 1,138 | 1,138 | 185 | ||||
Plus: share-based compensation expenses | 4,170 | 11,885 | 1,936 | ||||
Adjusted Net Income | 141,533 | 183,929 | 29,965 | ||||
Non-GAAP Earnings per share for ordinary share | |||||||
Basic | 1.42 | 1.71 | 0.28 | ||||
Diluted | 1.40 | 1.63 | 0.27 | ||||
Shares used in earnings per share computation: | |||||||
Ordinary shares: | |||||||
Basic | 100,000,000 | - | - | ||||
Diluted | 101,309,021 | - | - | ||||
Class A ordinary shares | |||||||
Basic | - | 38,501,316 | 38,501,316 | ||||
Diluted | 112,740,044 | 112,740,044 | |||||
Class B ordinary shares | |||||||
Basic | - | 68,788,940 | 68,788,940 | ||||
Diluted | - | 68,788,940 | 68,788,940 |
AUTOHOME INC. | |||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||
(Amount in thousands, except as noted) | |||||||||||||||
As of December 31, | As of September 30 | ||||||||||||||
2013 | 2014 | ||||||||||||||
RMB | RMB | US$ | |||||||||||||
(Audited) | (Unaudited) | (Unaudited) | |||||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | 1,138,613 | 798,155 | 130,035 | ||||||||||||
Restricted cash | 245,000 | - | - | ||||||||||||
Term deposits | - | 911,989 | 148,581 | ||||||||||||
Accounts receivable | 465,712 | 610,542 | 99,469 | ||||||||||||
Other current assets | 49,940 | 55,110 | 8,979 | ||||||||||||
Total current assets | 1,899,265 | 2,375,796 | 387,064 | ||||||||||||
Non-current assets: | |||||||||||||||
Property and equipment, net | 57,897 | 63,992 | 10,426 | ||||||||||||
Goodwill and intangible assets, net | 1,549,639 | 1,545,157 | 251,736 | ||||||||||||
Other non-current assets | 6,149 | 16,316 | 2,658 | ||||||||||||
Total non-current assets | 1,613,685 | 1,625,465 | 264,820 | ||||||||||||
Total assets | 3,512,950 | 4,001,261 | 651,884 | ||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Accrued expenses and other payables | 324,094 | 403,879 | 65,800 | ||||||||||||
Deferred revenue | 215,580 | 260,747 | 42,481 | ||||||||||||
Income tax payable | 20,204 | 13,840 | 2,255 | ||||||||||||
Payable for repurchase of common stock | 227,015 | - | - | ||||||||||||
Other current liabilities | 2,925 | - | - | ||||||||||||
Total current liabilities | 789,818 | 678,466 | 110,536 | ||||||||||||
Non-current liabilities: | |||||||||||||||
Other liabilities | 29,041 | 29,041 | 4,731 | ||||||||||||
Deferred tax liabilities | 481,727 | 499,010 | 81,298 | ||||||||||||
Total non-current liabilities | 510,768 | 528,051 | 86,029 | ||||||||||||
Total liabilities | 1,300,586 | 1,206,517 | 196,565 | ||||||||||||
Shareholders' equity: | |||||||||||||||
Total shareholders' equity | 2,212,364 | 2,794,744 | 455,319 | ||||||||||||
Total liabilities and shareholders' equity | 3,512,950 | 4,001,261 | 651,884 |