SHANGHAI, China, Nov. 2, 2010 /PRNewswire-Asia/ -- Ctrip.com International, Ltd. , a leading travel service provider for hotel accommodations, airline tickets, packaged tours and corporate travel management in China, today announced its unaudited financial results for the third quarter ended September 30, 2010.
Highlights for the Third Quarter of 2010 -- Net revenues were RMB812 million (US$121 million) for the third quarter of 2010, up 49% year-on-year. In the third quarter, Wing On Travel and ezTravel contributed 11% for the year-on-year growth for net revenues. -- Gross margin was 78% for the third quarter of 2010, compared to 77% in the same period in 2009. -- Income from operations was RMB308 million (US$46 million) for the third quarter of 2010, up 55% year-on-year. Excluding share-based compensation charges (non-GAAP), income from operations was RMB368 million (US$55 million), up 63% year-on-year. -- Operating margin was 38% for the third quarter of 2010, compared to 37% in the same period in 2009. Excluding share-based compensation charges (non-GAAP), operating margin was 45%, compared to 41% in the same period in 2009. -- Net income attributable to Ctrip's shareholders was RMB320 million (US$48 million) in the third quarter of 2010, up 70% year-on-year. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB380 million (US$57 million), up 77% year-on-year. -- Diluted earnings per ADS were RMB2.11 (US$0.31) for the third quarter of 2010. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB2.50 (US$0.37) for the third quarter of 2010. -- Share-based compensation charges were RMB60 million (US$9 million), accounting for 7% of the net revenues, or RMB0.40 (US$0.06) per ADS for the third quarter of 2010.
"The 2010 Shanghai World EXPO has boosted travel industry in China," said Min Fan, President and Chief Executive Officer of Ctrip. "Ctrip team capitalized this opportunity and delivered solid results in the third quarter of 2010. With the growing travel demand, Ctrip will continuously strengthen our supplier relationships, enhance our customer services, and gain market share through our concerted efforts."
Third Quarter 2010 Financial Results
For the third quarter of 2010, Ctrip reported total revenues of RMB863 million (US$129 million), representing a 48% increase from the same period in 2009 and a 16% increase from the previous quarter.
Hotel reservation revenues amounted to RMB350 million (US$52 million) for the third quarter of 2010, representing a 36% increase year-on-year, primarily driven by an increase of 30% in hotel reservation volume, and an increase of 5% commission per room night year-on-year. Hotel reservation revenues increased 11% quarter-on-quarter, primarily driven by the increase in hotel reservation volume.
Air ticket booking revenues for the third quarter of 2010 were RMB315 million (US$47 million), representing a 36% increase year-on-year, primarily driven by a 30% increase in air ticketing sales volume, and a 4% increase in commission per ticket year-on-year. Air ticket booking revenues increased 3% quarter-on-quarter.
Packaged-tour revenues for the third quarter of 2010 were RMB141 million (US$21 million), representing a 161% increase year-on-year and a 110% increase quarter-on-quarter, due to the increase of leisure travel volume and seasonality. Wing On Travel and ezTravel contributed 108% for the year-on-year growth for packaged-tour revenues.
Corporate travel revenues for the third quarter of 2010 were RMB34 million (US$5 million), representing a 37% increase year-on-year and a 1% increase quarter-on-quarter, primarily driven by the increased corporate travel demand from business activities.
For the third quarter of 2010, net revenues were RMB812 million (US$121 million), representing a 49% increase from the same period in 2009 and a 17% increase from the previous quarter. In the third quarter, Wing On Travel and ezTravel contributed 11% for the year-on-year growth for net revenues.
Gross margin was 78% in the third quarter of 2010, compared to 77% in the same period in 2009, and remained consistent with that in the previous quarter.
Product development expenses for the third quarter of 2010 increased by 53% to RMB123 million (US$18 million) from the same period in 2009 and 13% from the previous quarter, primarily due to an increase in product development personnel and share-based compensation charges. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 13% of the net revenues, decreased from 14% in the same period in 2009 and in the previous quarter.
Sales and marketing expenses for the third quarter of 2010 increased by 33% to RMB125 million (US$19 million) from the same period in 2009, primarily due to the increase in sales and marketing related activities and share-based compensation charges. Sales and marketing expenses for the third quarter of 2010 increased by 17% from the previous quarter, primarily due to the increase in sales and marketing related activities. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses accounted for 14% of the net revenues, decreasing from 17% in the same period in 2009 and remained consistent with that in the previous quarter.
General and administrative expenses for the third quarter of 2010 increased by 69% to RMB80 million (US$12 million) from the same period in 2009, primarily due to an increase in administrative personnel and share-based compensation charges. General and administrative expenses for the third quarter of 2010 increased by 13% from the previous quarter, primarily due to an increase in administrative personnel. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 5% of the net revenues, decreasing from 6% in the same period in 2009 and remained consistent with that in the previous quarter.
Income from operations for the third quarter of 2010 was RMB308 million (US$46 million), representing an increase of 55% from the same period in 2009 and an increase of 20% from the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB368 million (US$55 million), representing an increase of 63% from the same period in 2009 and an increase of 17% from the previous quarter.
Operating margin was 38% in the third quarter of 2010, compared to 37% in the same period in 2009, and in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 45%, compared to 41% in the same period in 2009 and remained consistent with that in the previous quarter.
The effective tax rate for the third quarter of 2010 was 17%, increased from 13% in the same period of 2009, primarily due to the normalization of the tax rate in the third quarter of 2010. The effective tax rate for the third quarter of 2010 decreased from 19% in the previous quarter, primarily due to the impact of newly acquired entities.
Net income attributable to Ctrip's shareholders for the third quarter of 2010 was RMB320 million (US$48 million), representing a 70% increase from the same period in 2009, and a 36% increase from the previous quarter. Net income for the third quarter of 2010 benefited from higher government subsidies recorded in other income line. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB380 million (US$57 million), representing an increase of 77% from the same period in 2009, and an increase of 30% from the previous quarter.
Diluted earnings per ADS were RMB2.11 (US$0.31) for the third quarter of 2010. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB2.50 (US$0.37) for the third quarter of 2010.
As of September 30, 2010, the balance of cash, restricted cash and short-term investment was RMB3.1 billion (US$463 million).
Business Outlook
For the fourth quarter of 2010, the Company expects to continue the net revenue growth year-on-year at a rate of approximately 30~35%. This forecast reflects Ctrip's current and preliminary view, which is subject to change.
Conference Call
Ctrip's management team will host a conference call at 9:00PM U.S. Eastern Time on November 2, 2010 (or 9:00AM on November 3, 2010 in the Shanghai/HK time zone) following the announcement.
The conference call will be available on Webcast live and replay at: http://ir.ctrip.com/. The call will be archived for one month at this website.
The dial-in details for the live conference call: U.S. Toll Free Number +1.888.713.4215, International dial-in number +1.617.213.4867, Passcode 69115178. For pre-registration, please click https://cossprereg.btci.com/prereg/key.process?key=PW8XGDRMU.
A telephone replay of the call will be available after the conclusion of the conference call through November 10, 2010. The dial-in details for the replay: U.S. Toll Free Number +1.888.286.8010, International dial-in number +1.617.801.6888, Passcode 30774034.
Safe Harbor Statement
This announcement contains forward-looking statements. These 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 "may," "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," "is/are likely to," "confident" or other similar statements. Among other things, quotations from management and the Business Outlook section in this press release, as well as Ctrip's strategic and operational plans, contain forward-looking statements. Ctrip may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, etc., 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 Ctrip's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, the slow-down of economic growth in China and the global economic downturn, general declines or disruptions in the travel industry, volatility in the trading price of Ctrip's ADSs, Ctrip's reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances, failure to further increase Ctrip's brand recognition to obtain new business partners and consumers, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in China, Hong Kong, Macau or Taiwan, failure to successfully develop Ctrip's corporate travel business, damage to or failure of Ctrip's infrastructure and technology, loss of services of Ctrip's key executives, inflation in China and in other countries, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Ctrip's affiliated Chinese entities and the contractual arrangements among Ctrip, its affiliated Chinese entities and their shareholders, and other risks outlined in Ctrip's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F and other filings. All information provided in this press release and in the attachments is as of the date of the issuance, and Ctrip does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement Ctrip's unaudited consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Ctrip uses non-GAAP financial information related to product development expenses, sales and marketing expenses, general and administrative expenses, income from operations, operating margin, net income, and diluted earnings per ordinary share and per ADS, each of which is adjusted from the most comparable GAAP result to exclude the share-based compensation charges recorded under ASC 718, "Stock Compensation" for 2010 and 2009. Ctrip's management believes the non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.
Non-GAAP information is not prepared in accordance with GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges that have been and will continue to be significant recurring expenses in our business for the foreseeable future.
Reconciliations of Ctrip's non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.
About Ctrip.com International, Ltd.
Ctrip.com International, Ltd. is a leading travel service provider of hotel accommodations, airline tickets, packaged tours, and corporate travel management in China. Ctrip aggregates hotel and flight information to enable business and leisure travelers to make informed and cost-effective bookings. Ctrip also books vacation packages and guided tours. In addition, Ctrip corporate travel management services help corporate clients effectively manage their travel requirements. Since its inception in 1999, Ctrip has experienced substantial growth and become one of the best-known travel brands in China.
For further information, please contact: Investor Relations Ctrip.com International, Ltd. Tel: +86-21-3406-4880 x12258 Email: iremail@ctrip.com Ctrip.com International, Ltd. Consolidated Balance Sheet Information December 31, September 30, September 30, 2009 2010 2010 RMB RMB USD (unaudited) (unaudited) (unaudited) ASSETS Current assets: Cash 1,434,618,382 1,648,035,779 246,324,756 Restricted cash 113,150,289 189,868,719 28,378,853 Short-term investment 180,183,917 1,261,505,559 188,551,761 Accounts receivable, net 420,579,005 681,675,655 101,887,102 Prepayments and other current assets 134,318,164 367,560,106 54,937,614 Deferred tax assets, current 23,446,059 40,677,684 6,079,917 Total current assets 2,306,295,816 4,189,323,502 626,160,003 Long-term deposits 143,195,191 156,389,645 23,374,882 Land use rights 108,922,018 106,980,858 15,989,965 Property, equipment and software 550,506,595 620,476,327 92,739,904 Investment 658,051,285 1,554,815,956 232,391,593 Goodwill 322,936,838 758,231,441 113,329,563 Intangible assets 66,851,954 293,888,070 43,926,174 Total assets 4,156,759,697 7,680,105,799 1,147,912,084 LIABILITIES Current liabilities: Accounts payable 291,045,743 580,225,956 86,723,856 Salary and welfare payable 130,539,660 161,581,733 24,150,920 Taxes payable 142,256,695 146,046,946 21,829,003 Advances from customers 276,792,049 472,594,721 70,636,682 Accrued liability for customer reward program 88,254,996 112,486,338 16,812,845 Other payables and accruals 229,652,319 245,668,088 36,718,944 Total current liabilities 1,158,541,462 1,718,603,782 256,872,250 Deferred tax liabilities, non-current 11,509,937 45,538,026 6,806,371 Total liabilities 1,170,051,399 1,764,141,808 263,678,621 SHAREHOLDERS' EQUITY Share capital 2,801,334 2,925,256 437,225 Additional paid-in capital 1,219,815,250 3,009,984,068 449,889,256 Statutory reserves 72,489,182 72,489,182 10,834,643 Accumulated other comprehensive (loss) / income (77,742,443) 291,004,259 43,495,144 Retained Earnings 1,707,684,596 2,453,480,601 366,711,098 Total Ctrip's shareholders' equity 2,925,047,919 5,829,883,366 871,367,366 Noncontrolling interests 61,660,379 86,080,625 12,866,097 Total shareholders' equity 2,986,708,298 5,915,963,991 884,233,463 Total liabilities and shareholders' equity 4,156,759,697 7,680,105,799 1,147,912,084 Ctrip.com International, Ltd. Consolidated Statement of Operations Information Quarter Quarter Ended Ended September 30, June 30, 2009 2010 RMB RMB (unaudited) (unaudited) Revenues: Hotel reservation 257,895,372 316,150,468 Air-ticketing** 231,993,169 307,233,692 Packaged tour 54,001,698 67,042,613 Corporate travel** 24,776,141 33,659,355 Others 14,733,525 17,559,484 Total revenues 583,399,905 741,645,612 Less: business tax and related surcharges (37,970,770) (46,465,222) Net revenues 545,429,135 695,180,390 Cost of revenues (124,352,706) (151,154,849) Gross profit 421,076,429 544,025,541 Operating expenses: Product development * (80,758,571) (109,293,974) Sales and marketing * (93,931,484) (106,724,067) General and administrative * (47,188,825) (70,629,317) Total operating expenses (221,878,880) (286,647,358) Income from operations 199,197,549 257,378,183 Interest income 4,340,502 8,954,150 Other income 2,625,101 15,980,806 Income before income tax expense and equity in income 206,163,152 282,313,139 Income tax expense (26,809,547) (52,389,816) Equity in income of affiliates 11,573,606 7,222,181 Net income 190,927,211 237,145,504 Less: Net (income) /loss attributable to noncontrolling interests (2,410,490) (1,934,091) Net income attributable to Ctrip's shareholders 188,516,721 235,211,413 Earnings per ordinary share - Basic 5.59 6.58 - Diluted 5.30 6.20 Earnings per ADS - Basic 1.40 1.64 - Diluted 1.32 1.55 Weighted average ordinary shares outstanding - Basic 33,703,516 35,756,826 - Diluted 35,602,373 37,917,285 * Share-based compensation charges included are as follows: Product development 7,021,263 14,981,755 Sales and marketing 3,902,164 8,033,136 General and administrative 16,043,286 35,211,001 Quarter Ended Quarter Ended September 30, September 30, 2010 2010 RMB USD (unaudited) (unaudited) Revenues: Hotel reservation 349,655,584 52,261,503 Air-ticketing** 315,236,102 47,116,972 Packaged tour 140,858,679 21,053,535 Corporate travel** 33,938,560 5,072,649 Others 23,035,896 3,443,075 Total revenues 862,724,821 128,947,734 Less: business tax and related surcharges (50,520,118) (7,551,023) Net revenues 812,204,703 121,396,711 Cost of revenues (176,199,743) (26,335,811) Gross profit 636,004,960 95,060,900 Operating expenses: Product development * (123,199,772) (18,414,135) Sales and marketing * (125,160,008) (18,707,123) General and administrative * (79,623,531) (11,900,984) Total operating expenses (327,983,311) (49,022,242) Income from operations 308,021,649 46,038,658 Interest income 9,767,903 1,459,966 Other income 44,345,553 6,628,137 Income before income tax expense and equity in income 362,135,105 54,126,761 Income tax expense (62,186,716) (9,294,779) Equity in income of affiliates 23,192,105 3,466,423 Net income 323,140,494 48,298,405 Less: Net (income) /loss attributable to noncontrolling interests (3,001,333) (448,596) Net income attributable to Ctrip's shareholders 320,139,161 47,849,809 Earnings per ordinary share - Basic 8.94 1.34 - Diluted 8.42 1.26 Earnings per ADS - Basic 2.23 0.33 - Diluted 2.11 0.31 Weighted average ordinary shares outstanding - Basic 35,815,709 35,815,709 - Diluted 38,005,087 38,005,087 * Share-based compensation charges included are as follows: Product development 16,583,720 2,478,697 Sales and marketing 8,168,446 1,220,902 General and administrative 35,491,501 5,304,761 ** Certain prior year amounts have been reclassified with no effect on net income or retained earnings to conform to the 2010 financial information presentation. Revenues are presented in accordance with the definitions below: Air-ticketing revenues primarily include commissions from air ticket booking and related services, including sales of aviation casualty insurance, and revenue generated from air-ticket delivery services. Corporate travel management revenues primarily include commissions from hotel reservation, air ticket booking and packaged-tour services rendered to corporate clients. Ctrip.com International, Ltd. Reconciliation of GAAP and Non-GAAP Results (In RMB, except % and per share information) Quarter Ended September 30, 2010 -------------------------------- % of GAAP Net Share-based Result Revenue Compensation ------- -------- ------------ Product development (123,199,772) 15% 16,583,720 Sales and marketing (125,160,008) 15% 8,168,446 General and administrative (79,623,531) 10% 35,491,501 ----------- ---------- Total operating expenses (327,983,311) 40% 60,243,667 Income from operations 308,021,649 38% 60,243,667 Net income attributable to Ctrip's shareholders 320,139,161 39% 60,243,667 Diluted earnings per ordinary share (RMB) 8.42 1.59 Diluted earnings per ADS (RMB) 2.11 0.40 Diluted earnings per ADS (USD) 0.31 0.06 Quarter Ended September 30, 2010 -------------------------------- % of % of Net Non-GAAP Net Revenue Result Revenue -------- --------- -------- Product development 2% (106,616,052) 13% Sales and marketing 1% (116,991,562) 14% General and administrative 4% (44,132,030) 5% ----------- Total operating expenses 7% (267,739,644) 33% Income from operations 7% 368,265,316 45% Net income attributable to Ctrip's shareholders 7% 380,382,828 47% Diluted earnings per ordinary share (RMB) 10.01 Diluted earnings per ADS (RMB) 2.50 Diluted earnings per ADS (USD) 0.37 Quarter Ended June 30, 2010 --------------------------- % of GAAP Net Share-based Result Revenue Compensation ------- -------- ------------ Product development (109,293,974) 16% 14,981,755 Sales and marketing (106,724,067) 15% 8,033,136 General and administrative (70,629,317) 10% 35,211,001 ----------- ---------- Total operating expenses (286,647,358) 41% 58,225,892 Income from operations 257,378,183 37% 58,225,892 Net income attributable to Ctrip's shareholders 235,211,413 34% 58,225,892 Diluted earnings per ordinary share (RMB) 6.20 1.54 Diluted earnings per ADS (RMB) 1.55 0.38 Diluted earnings per ADS (USD) 0.23 0.06 Quarter Ended June 30, 2010 --------------------------- % of % of Net Non-GAAP Net Revenue Result Revenue -------- --------- -------- Product development 2% (94,312,219) 14% Sales and marketing 1% (98,690,931) 14% General and administrative 5% (35,418,316) 5% ----------- Total operating expenses 8% (228,421,466) 33% Income from operations 8% 315,604,075 45% Net income attributable to Ctrip's shareholders 8% 293,437,305 42% Diluted earnings per ordinary share (RMB) 7.74 Diluted earnings per ADS (RMB) 1.93 Diluted earnings per ADS (USD) 0.29 Quarter Ended September 30, 2009 -------------------------------- % of GAAP Net Share-based Result Revenue Compensation ------- -------- ------------ Product development (80,758,571) 15% 7,021,263 Sales and marketing (93,931,484) 17% 3,902,164 General and administrative (47,188,825) 9% 16,043,286 ----------- ---------- Total operating expenses (221,878,880) 41% 26,966,713 Income from operations 199,197,549 37% 26,966,713 Net income attributable to Ctrip's shareholders 188,516,721 35% 26,966,713 Diluted earnings per ordinary share (RMB) 5.30 0.76 Diluted earnings per ADS (RMB) 1.32 0.19 Diluted earnings per ADS (USD) 0.19 0.03 Quarter Ended September 30, 2009 -------------------------------- % of % of Net Non-GAAP Net Revenue Result Revenue -------- --------- -------- Product development 1% (73,737,308) 14% Sales and marketing 1% (90,029,320) 17% General and administrative 3% (31,145,539) 6% ----------- Total operating expenses 5% (194,912,167) 36% Income from operations 5% 226,164,262 41% Net income attributable to Ctrip's shareholders 5% 215,483,434 40% Diluted earnings per ordinary share (RMB) 6.05 Diluted earnings per ADS (RMB) 1.51 Diluted earnings per ADS (USD) 0.22 Notes for all the financial schedules presented: Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.6905 on September 30, 2010 published by the Federal Reserve Board. Note 2: Effective on January 21, 2010, Company changed ratio of the American Depositary Shares ("ADSs") to ordinary shares from two (2) ADSs representing one (1) ordinary shares to four (4) ADSs representing one (1) ordinary share. The change is reflected retroactively in the numbers for all the periods presented above.
Ctrip.com International, Ltd.
CONTACT: Investor Relations of Ctrip.com International, Ltd.,
+86-21-3406-4880 x12258, or iremail@ctrip.com
Web Site: http://ir.ctrip.com/
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