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Leju Reports Third Quarter 2017 Results and Issues Notice of Annual General Meeting

BEIJING, Nov. 28, 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 third quarter ended September 30, 2017.

Third Quarter 2017 Financial Highlights

  • Total revenues decreased by 48% year-on-year to $95.2 million.
    • Revenues from e-commerce services decreased by 57% year-on-year to $61.8 million.
    • Revenues from online advertising services decreased by 11% year-on-year to $30.0 million.
    • Revenues from listing services decreased by 42% year-on-year to $3.4 million.
  • Loss from operations was $29.3 million. Non-GAAP1 loss from operations was $24.9 million.
  • Net loss attributable to Leju shareholders was $23.1 million, or $0.17 loss per diluted American depositary share ("ADS"). Non-GAAP net loss attributable to Leju shareholders was $19.2 million, or $0.14 loss per diluted ADS.

First Nine Months 2017 Financial Highlights

  • Total revenues decreased by 44% year-on-year to $256.2 million.
    • Revenues from e-commerce services decreased by 53% year-on-year to $163.6 million.
    • Revenues from online advertising services decreased by 10% year-on-year to $80.5 million.
    • Revenues from listing services decreased by 28% year-on-year to $12.0 million.
  • Loss from operations was $158.6 million, including goodwill impairment charge of $41.2 million. Non-GAAP loss from operations was $104.1 million.
  • Net loss attributable to Leju shareholders was $138.6 million, including goodwill impairment charge of $41.2 million, or $1.02 loss per diluted American depositary share ("ADS"). Non-GAAP net loss attributable to Leju shareholders was $85.7 million, or $0.63 loss per diluted ADS.

"In the third quarter, market conditions didn't show significant improvement in major cities where we operate," said Mr. Geoffrey He, Leju's Chief Executive Officer. "Despite reduced demand for marketing activities from developers, we were encouraged to see a sequential increase in our online advertising revenue as our big-data based suite of targeted advertising products gained popularity among our developer clients." 

"During this quarter, we continued to invest in product innovation, content optimization and expanded partnerships to enhance our media influence. We also improved and integrated our platforms to provide more streamlined services for our clients. Meanwhile, in the home furnishing market, we made further progress on our contractor platform, laying a solid foundation for future growth. Looking into the fourth quarter, we will continue our efforts to streamline Leju's cost structure to better adapt to the unfavorable market conditions, which may persist in the near term."

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.

Third Quarter 2017 Results

Total revenues were $95.2 million, a decrease of 48% from $183.3 million for the same quarter of 2016 as a result of restrictions placed by local governments.

Revenues from e-commerce services were $61.8 million, a decrease of 57% from $143.8 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 $30.0 million, a decrease of 11% from $33.6 million for the same quarter of 2016, primarily due to a decrease in property developers' online advertising demand.

Revenues from listing services were $3.4 million, a decrease of 42% from $5.9 million for the same quarter of 2016, primarily due to a decrease in secondary home sales.

Cost of revenues was $21.1 million, an increase of 39% from $15.2 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 $103.5 million, a decrease of 27% from $142.8 million for the same quarter of 2016, primarily due to decreased marketing expenses related to the Company's e-commerce business, decreased commission expenses in line with the decrease of revenues and decreased salary and bonus as a result of headcount change.

Loss from operations was $29.3 million, compared to income from operations of $26.8 million for the same quarter of 2016. Non-GAAP loss from operations was $24.9 million, compared to non-GAAP income from operations of $33.6 million for the same quarter of 2016.

Net loss was $23.4 million, compared to net income of $17.2 million for the same quarter of 2016. Non-GAAP net loss was $19.5 million, compared to non-GAAP net income of $23.2 million for the same quarter of 2016.

Net loss attributable to Leju shareholders was $23.1 million, or $0.17 loss per diluted ADS, compared to net income attributable to Leju shareholders of $17.1 million, or $0.13 per diluted ADS, for the same quarter of 2016. Non-GAAP net loss attributable to Leju shareholders was $19.2 million, or $0.14 loss per diluted ADS, compared to non-GAAP net income attributable to Leju shareholders of $23.1 million, or $0.17 per diluted ADS, for the same quarter of 2016.

First Nine Months 2017 Results

Total revenues were $256.2 million, a decrease of 44% from $454.6 million for the same period of 2016 as a result of restrictions placed by local governments.

Revenues from e-commerce services were $163.6 million, a decrease of 53% from $348.2 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 $80.5 million, a decrease of 10% from $89.8 million for the same period of 2016, primarily due to a decrease in property developers' online advertising demand.

Revenues from listing services were $12.0 million, a decrease of 28% from $16.7 million for the same period of 2016, primarily due to a decrease in secondary home sales.

Cost of revenues was $54.4 million, an increase of 25% from $43.5 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 $322.0 million, a decrease of 18% from $390.4 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 $158.6 million, compared to income from operations of $23.0 million for the same period of 2016. Non-GAAP loss from operations was $104.1 million, compared to non-GAAP income from operations of $42.7 million for the same period of 2016.

Net loss was $139.6 million, compared to net income of $14.8 million for the same period of 2016. Non-GAAP net loss was $86.7 million, compared to non-GAAP net income of $32.1 million for the same period of 2016.

Net loss attributable to Leju shareholders was $138.6 million, or $1.02 loss per diluted ADS, compared to net income attributable to Leju shareholders of $15.7 million, or $0.12 per diluted ADS, for the same period of 2016. Non-GAAP net loss attributable to Leju shareholders was $85.7 million, or $0.63 loss per diluted ADS, compared to non-GAAP net income attributable to Leju shareholders of $33.0 million, or $0.24 per diluted ADS, for the same period of 2016.

Cash Flow

As of September 30, 2017, the Company's cash and cash equivalents balance was $209.0 million.

Third quarter 2017 net cash provided by operating activities was $18.2 million, mainly attributable to an increase in other current liabilities of 30.5 million, and an increase in advances from customers and deferred revenue of $8.6 million, partially offset by non-GAAP net loss of $19.5 million. Net cash used in investing activities was $6.0 million, mainly due to the payment of $5.9 million for the acquisition of a live broadcasting APP and all of its related software copyrights, trademarks and personnel.

Business Outlook

The Company estimates that its total revenues for the fourth quarter of 2017 will be approximately $90 million to $100 million, which would represent a decrease of approximately 5% to 14% from $104.9 million in the same quarter in 2016. This forecast reflects the Company's current and preliminary view, which is subject to change.

Leju to Hold Annual General Meeting on December 22, 2017

Leju announced that it will hold its annual general meeting of shareholders (the "AGM") at Room 1120, 11/F, Yinli Building, No. 383 Guangyan Road, Shanghai, the People's Republic of China on December 22, 2017 at 10:00AM (local time). No proposal will be submitted to shareholders for approval at the AGM. Instead, the AGM will serve as an open forum for shareholders and holders of the Company's ADSs to discuss Company affairs with management.

Holders of record of the Company's ordinary shares at the close of business on December 1, 2017 (Eastern Standard Time) are entitled to receive notice of and attend the annual general meeting or any adjournment or postponement thereof. Holders of the Company's ADSs are welcome to attend the AGM in person.

The notice of the annual general meeting is available on the Company's website at http://ir.leju.com.

Conference Call Information

Leju's management will host an earnings conference call on November 28, 2017 at 7 a.m. U.S. Eastern Time (8 p.m. Beijing/Hong Kong time).

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

U.S./International:

+1-323-794-2093

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 December 5, 2017:

U.S./International:

+1-888-203-1112

Hong Kong:

+ 800-901-108

Mainland China:

+ 400-120-1651

Passcode:

9793448

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,


September 30,




2016


2017

ASSETS









Current assets









Cash and cash equivalents




274,338




208,957

Accounts receivable, net




71,390




77,689

Marketable securities




2,181




2,384

Prepaid expenses and other current assets




12,756




8,862

Customer deposits




39,702




32,528

Amounts due from related parties




6,019




2,812

Total current assets




406,386




333,232

Property and equipment, net




7,923




12,373

Intangible assets, net




78,374




74,054

Investment in affiliates




409




236

Goodwill




39,018




-

Deferred tax assets




41,698




43,584

Other non-current assets




2,059




2,292

Total assets




575,867




465,771












LIABILITIES AND EQUITY











Current liabilities











Accounts payable




1,574




683

Accrued payroll and welfare expenses




41,728




35,130

Income tax payable




66,148




40,340

Other tax payable




16,678




12,227

Amounts due to related parties




1,581




5,342

Advance from customers and deferred revenue




5,058




15,165

Accrued marketing and advertising expenses




9,355




21,143

Other current liabilities




8,516




38,889

Total current liabilities




150,638




168,919

Deferred tax liabilities




18,869




21,080

Total liabilities




169,507




189,999

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 September 30,
  2017, respectively




136




136

Additional paid-in capital




785,019




788,416

Accumulated deficit




(354,365)




(493,012)

Accumulated other comprehensive income




(22,321)




(16,622)

Total Leju equity




408,469




278,918

Non-controlling interests




(2,109)




(3,146)

Total equity




406,360




275,772

TOTAL LIABILITIES AND EQUITY




575,867




465,771













 

LEJU HOLDINGS LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

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




Three months ended


Nine months ended



September 30,


September 30,



2016


2017


2016


2017










Revenues









E-commerce


143,845


61,809


348,152


163,619

Online advertising services


33,555


29,963


89,769


80,516

Listing services


5,902


3,395


16,692


12,029

Total revenues


183,302


95,167


454,613


256,164

Cost of revenues


(15,229)


(21,144)


(43,465)


(54,437)

Selling, general and administrative expenses


(142,769)


(103,531)


(390,379)


(321,983)

Goodwill impairment charge


-


-


-


(41,223)

Other operating income


1,464


159


2,274


2,901

Income (loss) from operations


26,768


(29,349)


23,043


(158,578)

Investment income (loss)


1


-


(189)


-

Interest income


373


411


925


988

Other income (expenses), net


62


(316)


563


(623)

Income (loss) before taxes and equity in
    affiliates


27,204


(29,254)


24,342


(158,213)

Income tax benefits (expenses)


(9,923)


5,893


(9,342)


18,818

Income (loss) before equity in affiliates


17,281


(23,361)


15,000


(139,395)

Loss from equity in affiliates


(80)


(56)


(216)


(188)

Net income (loss)


17,201


(23,417)


14,784


(139,583)

Less: net income (loss) attributable to
    non-controlling interests


102


(294)


(879)


(984)

Net income (loss) attributable to Leju s
    hareholders


17,099


(23,123)


15,663


(138,599)










Earnings (loss) per share:









Basic


0.13


(0.17)


0.12


(1.02)

Diluted


0.13


(0.17)


0.12


(1.02)

Shares used in computation:









Basic


135,278,105


135,763,962


135,171,280


135,689,813

Diluted


135,430,377


135,763,962


135,279,590


135,689,813










Note 1

The conversion of Renminbi ("RMB") amounts into USD amounts is based on the rate
of USD1 = RMB6.6369 on September 30, 2017 and USD1 = RMB6.7836 for the nine
months ended September 30, 2017

 


LEJU HOLDINGS LIMITED

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(In thousands of U.S. dollars)




Three months ended


Nine months ended



September 30,


September 30,



2016


2017


2016


2017










Net income (loss)


17,201


(23,417)


14,784


(139,583)

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









Foreign currency translation adjustment


(1,742)


1,353


(5,527)


5,621










Comprehensive income (loss)


15,459


(22,064)


9,257


(133,962)










Less: Comprehensive income (loss) attributable to
      non-controlling interest


105


(333)


(875)


(1,062)










Comprehensive income (loss) attributable to 
Leju shareholders


15,354


(21,731)


10,132


(132,900)










 

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


Nine months ended



September 30,


September 30,



2016


2017


2016


2017



(unaudited)


(unaudited)


(unaudited)


(unaudited)









GAAP income (loss) from operations


26,768


(29,349)


23,043


(158,578)

Share-based compensation expense


3,700


976


10,427


3,374

Amortization of intangible assets resulting from business
    acquisitions


3,083


3,485


9,250


9,848

Goodwill impairment


-


-


-


41,223

Non-GAAP income (loss) from operations


33,551


(24,888)


42,720


(104,133)










GAAP net income (loss)


17,201


(23,417)


14,784


(139,583)

Share-based compensation expense (net of tax)


3,700


976


10,427


3,374

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


2,312


2,911


6,937


8,278

Goodwill impairment (net of tax)


-


-


-


41,223

Non-GAAP net income (loss)


23,213


(19,530)


32,148


(86,708)










Net income (loss) attributable to Leju Shareholder


17,099


(23,123)


15,663


(138,599)

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


3,691


967


10,402


3,349

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


2,312


2,911


6,937


8,278

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


-


-


-


41,223

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


23,102


(19,245)


33,002


(85,749)










GAAP net income (loss) per ADS - basic/diluted


0.13


(0.17)


0.12


(1.02)










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


0.17


(0.14)


0.24


(0.63)










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


135,278,105


135,763,962


135,171,280


135,689,813










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


135,430,377


135,763,962


135,279,590


135,689,813



















 

LEJU HOLDINGS LIMITED

SELECTED OPERATING DATA








Three months ended


Nine months ended



September 30,


September 30,



2016


2017


2016


2017










Operating data for e-commerce services









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


132,142


58,168


267,827


198,899

Number of discount coupons redeemed
    (number of transactions)


53,602


30,717


137,827


82,374










 

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SOURCE Leju Holdings Limited