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Leju Reports Second Quarter 2017 Results

  (August 31, 2017)

BEIJING, Aug. 31, 2017 /PRNewswire/ -- Leju Holdings Limited ("Leju" or the "Company") (NYSE: LEJU), a leading online-to-offline ("O2O") real estate services provider in China, today announced its unaudited financial results for the second quarter ended June 30, 2017.

Second Quarter 2017 Financial Highlights

  • Total revenues decreased by 41% year-on-year to $92.7 million.
    • Revenues from e-commerce services decreased by 46% year-on-year to $63.7 million.
    • Revenues from online advertising services decreased by 28% year-on-year to $24.8 million.
    • Revenues from listing services decreased by 26% year-on-year to $4.2 million.
  • Loss from operations was $83.0 million, including goodwill impairment charge of $41.2 million. Non-GAAP[1] loss from operations was $37.4 million.
  • Net loss attributable to Leju shareholders was $87.3 million, including goodwill impairment charge of $41.2 million, or $0.64 loss per diluted American depositary share ("ADS"). Non-GAAP net loss attributable to Leju shareholders was $42.3 million, or $0.31 loss per diluted ADS.

First Half 2017 Financial Highlights


  • Total revenues decreased by 41% year-on-year to $161.0 million.
    • Revenues from e-commerce services decreased by 50% year-on-year to $101.8 million.
    • Revenues from online advertising services decreased by 10% year-on-year to $50.6 million.
    • Revenues from listing services decreased by 20% year-on-year to $8.6 million.
  • Loss from operations was $129.2 million, including goodwill impairment charge of $41.2 million. Non-GAAP loss from operations was $79.2 million.
  • Net loss attributable to Leju shareholders was $115.5 million, including goodwill impairment charge of $41.2 million, or $0.85 loss per diluted American depositary share ("ADS"). Non-GAAP net loss attributable to Leju shareholders was $66.5 million, or $0.49 loss per diluted ADS.

"During the second quarter, we continued to face an extremely challenging operating environment," said Mr. Geoffrey He, Leju's Chief Executive Officer. "Restrictive policies on the real estate industry such as price ceilings, required holdings period, and tightened mortgage lending were strictly enforced in this quarter and further expanded from tier 1 and tier 2 cities into some lower tier cities. As a result, demand for marketing activities was sharply reduced in both primary and secondary real estate markets in major cities where we operate, which had a significant and negative impact on our operations and results."

"Despite the policy headwinds, we stayed focused on offering differentiated and comprehensive marketing solutions for our developer clients, who well recognize Leju's value as a result of our continued investment in platform improvement, brand awareness and product innovation. We believe Leju is well positioned to capture the growth opportunity when the market normalizes. In the near term, we will closely monitor market development and regulatory changes and make necessary adjustments to reduce costs and operating losses."

[1] Leju 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 Leju shareholders, (4) net income (loss) attributable to Leju shareholders per basic ADS, and (5) net income (loss) attributable to Leju shareholders per diluted ADS, each of which excludes share-based compensation expense, amortization of intangible assets resulting from business acquisitions and goodwill impairment. See "About Non-GAAP Financial Measures" and "Unaudited Reconciliation of GAAP and Non-GAAP Results" below for more information about the non-GAAP financial measures included in this press release.

Second Quarter 2017 Results

Total revenues were $92.7 million, a decrease of 41% from $158.3 million for the same quarter of 2016 as a result of restrictions placed by local governments.

Revenues from e-commerce services were $63.7 million, a decrease of 46% from $118.2 million for the same quarter of 2016, primarily due to decreases in both the number of discount coupons redeemed and in the average price per discount coupon.

Revenues from online advertising services were $24.8 million, a decrease of 28% from $34.4 million for the same quarter of 2016, primarily due to a decrease in property developers' online advertising demand.

Revenues from listing services were $4.2 million, a decrease of 26% from $5.7 million for the same quarter of 2016, primarily due to a decrease in secondary home sales.

Cost of revenues was $19.2 million, an increase of 31% from $14.6 million for the same quarter of 2016, primarily due to increased cost of advertising resources purchased, partially offset by decreased staffing cost of the editorial department as a result of headcount change.

Selling, general and administrative expenses were $117.9 million, a decrease of 12% from $134.3 million for the same quarter of 2016, primarily due to decreased marketing expenses related to the Company's e-commerce business and decreased commission expenses in line with the decrease of revenues.

Goodwill impairment charge was $41.2 million. Since changes in market environment continued to have a negative impact on the Company's operating conditions and business outlook, an impairment loss of goodwill of $41.2 million was recognized based on the impairment assessment review.

Loss from operations was $83.0 million, compared to income from operations of $10.1 million for the same quarter of 2016. Non-GAAP loss from operations was $37.4 million, compared to non-GAAP income from operations of $16.5 million for the same quarter of 2016.

Net loss was $87.5 million, compared to net income of $8.6 million for the same quarter of 2016. Non-GAAP net loss was $42.5 million, compared to non-GAAP net income of $14.3 million for the same quarter of 2016.

Net loss attributable to Leju shareholders was $87.3 million, or $0.64 loss per diluted ADS, compared to net income attributable to Leju shareholders of $9.5 million, or $0.07 per diluted ADS, for the same quarter of 2016. Non-GAAP net loss attributable to Leju shareholders was $42.3 million, or $0.31 loss per diluted ADS, compared to non-GAAP net income attributable to Leju shareholders of $15.2 million, or $0.11 per diluted ADS, for the same quarter of 2016.

First Half 2017 Results

Total revenues were $161.0 million, a decrease of 41% from $271.3 million for the same period of 2016 as a result of restrictions placed by local governments.

Revenues from e-commerce services were $101.8 million, a decrease of 50% from $204.3 million for the same period of 2016, primarily due to decreases in both the number of discount coupons redeemed and in the average price per discount coupon.

Revenues from online advertising services were $50.6 million, a decrease of 10% from $56.2 million for the same period of 2016, primarily due to a decrease in property developers' online advertising demand.

Revenues from listing services were $8.6 million, a decrease of 20% from $10.8 million for the same period of 2016, primarily due to a decrease in secondary home sales.

Cost of revenues was $33.3 million, an increase of 18% from $28.2 million for the same period of 2016, primarily due to increased cost of advertising resources purchased, partially offset by decreased staffing cost of the editorial department as a result of headcount change.

Selling, general and administrative expenses were $218.5 million, a decrease of 12% from $247.6 million for the same period of 2016, primarily due to decreased marketing expenses related to the Company's e-commerce business and decreased commission expenses in line with the decrease of revenues.

Goodwill impairment charge was $41.2 million. Since changes in market environment continued to have a negative impact on the Company's operating conditions and business outlook, an impairment loss of goodwill of $41.2 million was recognized based on the impairment assessment review.

Loss from operations was $129.2 million, compared to $3.7 million for the same period of 2016. Non-GAAP loss from operations was $79.2 million, compared to non-GAAP income from operations of $9.2 million for the same period of 2016.

Net loss was $116.2 million, compared to $2.4 million for the same period of 2016. Non-GAAP net loss was $67.2 million, compared to non-GAAP net income of $8.9 million for the same period of 2016.

Net loss attributable to Leju shareholders was $115.5 million, or $0.85 loss per diluted ADS, compared to $1.4 million, or $0.01 loss per diluted ADS, for the same period of 2016. Non-GAAP net loss attributable to Leju shareholders was $66.5 million, or $0.49 loss per diluted ADS, compared to non-GAAP net income attributable to Leju shareholders of $9.9 million, or $0.07 per diluted ADS, for the same period of 2016.

Cash Flow

As of June 30, 2017, the Company's cash and cash equivalents balance was $192.5 million.

Second quarter 2017 net cash used in operating activities was $29.5 million, mainly attributable to non-GAAP net loss of $42.5 million, partially offset by an increase in accrued marketing and advertising expenses and other current liabilities of $13.2 million.

Business Outlook

The Company estimates that its total revenues for the third quarter of 2017 will be approximately $85 million to $95 million, which would represent a decrease of approximately 48% to 54% from $183.3 million in the same quarter in 2016. This forecast reflects the 'Company's current and preliminary view, which is subject to change.

Conference Call Information

Leju's management will host an earnings conference call on August 31, 2017 at 7 a.m. U.S. Eastern Time (7 p.m. Beijing/Hong Kong time).

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

U.S./International:

+1-323-794-2094

Hong Kong:

+852-3008-1527

Mainland China: 

+400-120-9101

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

A replay of the conference call may be accessed by phone at the following number until September 7, 2017:

U.S./International:

+1-888-203-1112

Hong Kong:

+800-901-108

Mainland China: 

+400-120-1651

Passcode:

6186995

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

About Leju

Leju Holdings Limited ("Leju") (NYSE: LEJU) is a leading online-to-offline, or O2O, real estate services provider in China, offering real estate e-commerce, online advertising and online listing services. Leju's integrated online platform comprises various mobile applications along with local websites covering more than 370 cities, enhanced by complementary offline services to facilitate residential property transactions. In addition to the Company's own websites, Leju operates the real estate and home furnishing websites of SINA Corporation, and maintains a strategic partnership with Tencent Holdings Limited. For more information about Leju, please visit http://ir.leju.com.

Safe Harbor: Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in 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," "target," "going forward," "outlook" and similar statements. Leju may also make written or oral forward-looking statements in its reports filed or furnished with the U.S. Securities and Exchange Commission, 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 Leju's beliefs and expectations, are forward-looking statements that 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. Such factors include, but are not limited to, fluctuations in China's real estate market; the highly regulated nature of, and government measures affecting, the real estate and internet industries in China; Leju's ability to compete successfully against current and future competitors; its ability to continue to develop and expand its content, service offerings and features, and to develop or incorporate the technologies that support them; its limited operating history and lack of experience as a stand-alone public company, given its carve-out from E-House and prior reliance on E-House for various corporate services; its reliance on SINA and others with which it has developed, or may develop in the future, strategic partnerships; substantial revenue contribution from a limited number of real estate markets; complexities resulting from its ongoing relationships with E-House, due to E-House's principal shareholding interest in Leju; and relevant government policies and regulations relating to the corporate structure, business and industry of Leju. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and the Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Leju's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Leju 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 Leju shareholders, (4) net income (loss) attributable to Leju shareholders per basic ADS, and (5) net income (loss) attributable to Leju shareholders per diluted ADS, each of which excludes share-based compensation expense, amortization of intangible assets resulting from business acquisitions and goodwill impairment. 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.

Leju believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expense, amortization of intangible assets resulting from business acquisitions, and goodwill impairment which may not be indicative of Leju's operating performance. These non-GAAP financial measures also facilitate management's internal comparisons to Leju'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 may continue to exist in Leju'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 provide 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. Annie Huang
Leju Holdings Limited
Phone: +86 (10) 5895-1062
E-mail: ir@leju.com

Philip Lisio 
Foote Group
Phone: +86 135-0116-6560
E-mail: phil@thefootegroup.com

 

 

LEJU HOLDINGS LIMITED

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars)


December 31,


June 30,


2016


2017

ASSETS




Current assets




Cash and cash equivalents

274,338


192,494

Accounts receivable, net

71,390


81,073

Marketable securities

2,181


2,088

Prepaid expenses and other current assets

12,756


14,572

Customer deposits

39,702


32,736

Amounts due from related parties

6,019


3,208

Total current assets

406,386


326,171

Property and equipment, net

7,923


7,615

Intangible assets, net

78,374


77,462

Investment in affiliates

409


285

Goodwill

39,018


-

Deferred tax assets

41,698


42,699

Other non-current assets

2,059


1,994

Total assets

575,867


456,226





LIABILITIES AND EQUITY




Current liabilities




Accounts payable

1,574


2,320

Accrued payroll and welfare expenses

41,728


36,918

Income tax payable

66,148


45,139

Other tax payable

16,678


12,388

Amounts due to related parties

1,581


8,118

Advance from customers and deferred revenue

5,058


6,116

Accrued marketing and advertising expenses

9,355


19,001

Other current liabilities

8,516


8,687

Total current liabilities

150,638


138,687

Deferred tax liabilities

18,869


20,680

Total liabilities

169,507


159,367

Equity




Ordinary shares ($0.001 par value): 1,000,000,000 shares 
   authorized, 135,503,958 and 135,763,962 shares issued and 
   outstanding, as of December 31, 2016 and June 30, 2017, 
   respectively

136


136

Additional paid-in capital

785,019


787,424

Accumulated deficit

(354,365)


(469,864)

Accumulated other comprehensive income

(22,321)


(18,015)

Total Leju equity

408,469


299,681

Non-controlling interests

(2,109)


(2,822)

Total equity

406,360


296,859

TOTAL LIABILITIES AND EQUITY

575,867


456,226


 

 


LEJU HOLDINGS LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except share data and per share data)




Three months ended


Six months ended



June 30,


June 30,



2016


2017


2016


2017

Revenues









E-commerce


118,219


63,719


204,307


101,810

Online advertising services


34,433


24,760


56,214


50,553

Listing services


5,671


4,210


10,790


8,634

Total revenues


158,323


92,689


271,311


160,997

Cost of revenues


(14,639)


(19,163)


(28,236)


(33,293)

Selling, general and administrative expenses


(134,298)


(117,931)


(247,610)


(218,452)

Goodwill impairment charge


-


(41,223)


-


(41,223)

Other operating income


708


2,671


810


2,742

Income (loss) from operations


10,094


(82,957)


(3,725)


(129,229)

Investment income (loss)


3


-


(190)


-

Interest income


330


294


552


577

Other income (expenses), net


516


(435)


501


(307)

Income (loss) before taxes and equity in 
   affiliates


10,943


(83,098)


(2,862)


(128,959)

Income tax benefits (expenses)


(2,223)


(4,368)


581


12,925

Income (loss) before equity in affiliates


8,720


(87,466)


(2,281)


(116,034)

Loss from equity in affiliates


(76)


(56)


(136)


(132)

Net income (loss)


8,644


(87,522)


(2,417)


(116,166)

Less: net loss attributable to non-controlling 
   interests


(884)


(219)


(981)


(690)

Net income (loss) attributable to Leju 
   shareholders


9,528


(87,303)


(1,436)


(115,476)










Earnings (loss) per share:









Basic


0.07


(0.64)


(0.01)


(0.85)

Diluted


0.07


(0.64)


(0.01)


(0.85)

Shares used in computation:









Basic


135,259,389


135,763,962


135,117,867


135,652,738

Diluted


135,366,778


135,763,962


135,117,867


135,652,738










Note 1

The conversion of Renminbi ("RMB") amounts into USD amounts is based on the
rate of USD1 = RMB6.7744 on June 30, 2017 and USD1 = RMB6.8547 for the six
months ended June 30, 2017

 

 


LEJU HOLDINGS LIMITED

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(In thousands of U.S. dollars)



Three months ended


Six months ended


June 30,


June 30,


2016


2017


2016


2017









Net income (loss)

8,644


(87,522)


(2,417)


(116,166)

Other comprehensive income (loss), net of tax of
nil








Foreign currency translation adjustment

(4,575)


3,025


(3,785)


4,268









Comprehensive income (loss)

4,069


(84,497)


(6,202)


(111,898)









Less: Comprehensive loss attributable to non-
     controlling interest

(882)


(251)


(980)


(729)









Comprehensive income (loss) attributable to
Leju shareholders

4,951


(84,246)


(5,222)


(111,169)

 

 

LEJU HOLDINGS LIMITED

Unaudited Reconciliation of GAAP and Non-GAAP Results

(In thousands of U.S. dollars, except share data and per ADS data)



Three months ended


Six months ended


June 30,


June 30,


2016


2017


2016


2017


(unaudited)


(unaudited)


(unaudited)


(unaudited)









GAAP income (loss) from operations

10,094


(82,957)


(3,725)


(129,229)

Share-based compensation expense

3,364


976


6,727


2,398

Amortization of intangible assets resulting from business
     acquisitions

3,083


3,332


6,167


6,363

Goodwill impairment

-


41,223


-


41,223

Non-GAAP income (loss) from operations

16,541


(37,426)


9,169


(79,245)









GAAP net income (loss)

8,644


(87,522)


(2,417)


(116,166)

Share-based compensation expense (net of tax)

3,364


976


6,727


2,398

Amortization of intangible assets resulting from
    
business acquisitions (net of tax)

2,312


2,797


4,625


5,367

Goodwill impairment (net of tax)

-


41,223


-


41,223

Non-GAAP net income (loss)

14,320


(42,526)


8,935


(67,178)









Net income (loss) attributable to Leju Shareholder

9,528


(87,303)


(1,436)


(115,476)

Share-based compensation expense
    
(net of tax and non-controlling interests)

3,356


968


6,711


2,382

Amortization of intangible assets resulting from business
     acquisitions (net of tax and non-controlling interests)

2,312


2,797


4,625


5,367

Goodwill impairment (net of tax and non-controlling
     interests)

-


41,223


-


41,223

Non-GAAP net income (loss) attributable to Leju
     shareholders

15,196


(42,315)


9,900


(66,504)









GAAP net income (loss) per ADS - basic

0.07


(0.64)


(0.01)


(0.85)









GAAP net income (loss) per ADS - diluted

0.07


(0.64)


(0.01)


(0.85)









Non-GAAP net income (loss) per ADS - basic

0.11


(0.31)


0.07


(0.49)









Non-GAAP net income (loss) per ADS - diluted

0.11


(0.31)


0.07


(0.49)









Shares used in calculating basic GAAP/non-GAAP net
     income (loss) attributable to shareholders per ADS

135,259,389


135,763,962


135,117,867


135,652,738









Shares used in calculating diluted GAAP net income (loss)
     attributable to shareholders per ADS

135,366,778


135,763,962


135,117,867


135,652,738









Shares used in calculating diluted non-GAAP net income
     (loss) attributable to shareholders per ADS

135,366,778


135,763,962


135,171,562


135,652,738

 

 

LEJU HOLDINGS LIMITED

SELECTED OPERATING DATA



Three months ended


Six months ended


June 30,


June 30,


2016


2017


2016


2017

Operating data for e-commerce services








Number of discount coupons issued to
     prospective purchasers (number of
     transactions)

76,383


97,282


135,685


140,731

Number of discount coupons redeemed (number
     of transactions)

49,982


32,670


84,225


51,657

 

View original content:http://www.prnewswire.com/news-releases/leju-reports-second-quarter-2017-results-300512145.html

SOURCE Leju Holdings Limited

Copyright 2014 PR Newswire. All Rights Reserved


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