SouFun Announces First Quarter 2013 Results

                 SouFun Announces First Quarter 2013 Results

PR Newswire

BEIJING, May 8, 2013

BEIJING, May 8, 2013 /PRNewswire/ -- SouFun Holdings Limited (NYSE: SFUN)
("SouFun"), the leading real estate Internet portal and one of the leading
home furnishing and improvement websites in China, announced today its
unaudited financial results for the first quarter 2013. (Amounts are in US
dollars, unless otherwise specified.)

First Quarter 2013 Highlights

  oRevenue in the first quarter of 2013 was $91.0 million, a 55.6% increase
    from the corresponding period in 2012.
  oOperating income in the first quarter of 2013 was $37.2 million, a 161.9%
    increase from the corresponding period in 2012. Non-GAAP operating income
    in the first quarter of 2013 was $39.0 million, a 151.9% increase from the
    corresponding period in 2012.
  oNet income attributable to SouFun Holdings Limited's shareholders was
    $28.4 million, or $0.34 per fully diluted share, which was a
    year-over-year increase of 95.5%. Non-GAAP net income attributable to
    SouFun Holdings Limited's shareholders was $33.2 million, or $0.40 per
    fully diluted share, which was a year-over-year increase of 134.3%.

"We had a very strong quarter to start 2013," said Vincent Mo, Executive
Chairman of SouFun. "Our focus on expanding existing business and constant
innovation has allowed SouFun to deliver solid results quarter after quarter.
We will continue to invest in our people, technology, and local city
infrastructure. We believe such investments are critical to ensure SouFun's
long-term sustainable expansion and will create significant value for our
shareholders in the long run."

First Quarter 2013 Results

Revenues

SouFun reported total revenues of $91.0 million for the first quarter of 2013,
representing an increase of 55.6% from the corresponding period in 2012,
primarily driven by the growth in SouFun membership services and listing
services.

Revenue  from marketing services was $35.8 million for the first quarter of
2013, an increase of 4.6% from $34.3 million for the corresponding period in
2012, primarily driven by the increase in number of advertisers.

Revenue  from e-commerce services was $26.4 million for the first quarter of
2013, a 118.9% increase from $12.0 million for the same period in 2012 due to
the increase in property purchases through our SouFun membership service.

Revenue from listing services was $26.8 million for the first quarter of 2013,
an increase of 145.4% from $10.9 million for the corresponding period in 2012
primarily due to increased property listings from agency subscribers. The
increase in listings was partially driven by the announcement of certain
housing-related government policies, which resulted in a significant increase
in secondary home market transaction volume.

Revenue from other value-added services was $2.0 million for the first quarter
of 2013, an increase of 60.8% from $1.3 million for the corresponding period
in 2012, primarily driven by database sales.

Cost of Revenue

Cost of revenue was $20.0 million for the first quarter of 2013, an increase
of 21.2% from $16.5 million for the corresponding period in 2012.The increase
in cost of revenue was primarily due to the increase in staff costs, business
tax, value-added taxes and other surcharges.

Gross margin was 78.0% for the first quarter of 2013, improved from 71.8% for
the corresponding period in 2012 as a result of controlled headcount increase
as compared to the revenue growth.

Operating Expenses

Operating expenses were $33.8 million for the first quarter of 2013, an
increase of 21.7% from $27.8 million for the corresponding period in 2012,
primarily due to effective cost control.

Selling expenses were $18.7 million for the first quarter of 2013, an increase
of 29.6% from $14.5 million for the corresponding period in 2012, primarily
due to increased staff cost and advertising and promotional expenses.

General and administrative expenses were $15.1 million for the first quarter
of 2013, an increase of 13.2% from $13.3 million for the corresponding period
in 2012, primarily due to increased staff cost and, to a lesser extent, an
increase in allowance for doubtful accounts.

Operating income was $37.2 million for the first quarter of 2013, an increase
of 161.9% from $14.2 million for the corresponding period in 2012, driven by
the revenue growth and effective cost control.

Income tax expense was $11.6 million for the first quarter of 2013, a
substantial increase compared to $1.9 million for the corresponding period in
2012. The increase was primarily due to a $5.0 million incremental tax expense
driven by profit growth and a $3.1 million accrual of dividend-related
withholding tax in the first quarter of 2013, as well as a $1.6 million
one-time tax benefit in the first quarter of 2012.

Net income attributable to SouFun Holdings Limited's shareholders was $28.4
million for the first quarter of 2013, an increase of 95.5% from $14.5 million
for the corresponding period in 2012. Fully diluted earnings per share were
$0.34 for the first quarter of 2013, a 88.9% increase from $0.18 for the
corresponding period in 2012.

Non-GAAP EBITDA, defined as non-GAAP net income before income taxes, interest
expenses, interest income, depreciation and amortization, was $40.9 million
for the first quarter of 2013, an increase of 134.4% as compared to $17.4
million for the corresponding period in 2012.

As of March 31, 2013, SouFun had cash, cash equivalents, and short-term
investments (excluding the available-for-sale security) of $203.9 million,
compared to $143.6 million as of December 31, 2012. Cash flow from operating
activities was $59.8 million for the first quarter of 2013, a 127.1% increase
from $26.3 million for the same period in 2012.

Business Outlook

SouFun raises its total revenue guidance for 2013 from between $516.0 million
and $527.0 million to between $527.0 million and $538.0 million, or from a
year-over-year increase of between 20.0% and 22.5% to between 22.5% and 25.0%,
despite uncertainties in China's property market. This forecast reflects
SouFun's current and preliminary view, which is subject to change.

Conference Call Information

SouFun's management team will host a conference call on May 8, 2013 at 8 a.m.
U.S. Eastern Daylight Time (8 p.m. Beijing/Hong Kong time).

The dial-in details for the live conference call are:

International Toll Dial-In Number: +65 6723 9381
International Toll Free Dial-In Number(s):
Hong Kong                          800 930 346
United States                      +1 866 519 4004
Local Dial-In Number(s):
Mainland China                     400 620 8038 / 800 819 0121
Hong Kong                          +852 2475 0994
United States, New York            +1 718 354 1231
Passcode:                          SFUN
Conference ID # 49186489

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

A telephone replay of the call will be available after the conclusion of the
conference call at 10:00 a.m. U.S. Eastern Daylight Time on May 8 through May
15, 2013. The dial-in details for the telephone replay are:

International:                   +61 2 8199 0299
Toll Free:
Mainland China                   400 120 0932 / 800 870 0205
Hong Kong                        800 963 117
United States                    +1 855 452 5696
Local Toll:
Hong Kong                        +852 3051 2780
United States, New York          +1 646 254 3697
Conference ID # 49186489

A live and archived webcast of the conference call will be available on
SouFun's website at http://ir.soufun.com.

About SouFun

SouFun operates the leading real estate Internet portal in China in terms of
the number of page views and visitors to our websites in 2012. Through
SouFun's websites, it provides marketing, e-commerce, listing, and other
value-added services for China's fast-growing real estate and home-related
sectors.SouFun's Internet portal is highly focused on user experience, and
supports SouFun's users in seeking information on the real estate and
home-related sectors in China. SouFun currently maintains about 100 offices
to focus on local market needs and its website and database contains real
estate related content covering more than 320 cities in China. For more
information about SouFun, please visit http://ir.soufun.com.

Safe Harbor Statements

This announcement contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking 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
"will," "expects," "is expected to," "anticipates," "aim," "future,"
"intends," "plans," "believes," "are likely to," "estimates," "may," "should"
and similar expressions. Such forward-looking statements include, without
limitation, statements regarding the revenue outlook for 2013 and statements
regarding SouFun's strategic and operational plans and focus, current and
future market positions the impact of government policies and China's real
estate and home furnishings market. Statements that are not historical facts,
including statements about SouFun'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, SouFun's
limited operating history, current global economic conditions and their
potential impact on the Chinese economy, measures taken or to be taken by the
Chinese government to control real estate growth and prices and other events
which could occur in the future, challenges in China's real estate market, the
impact of competitive market conditions for our services and our ability to
maintain and increase our leadership in China's home related internet sector,
the uncertain regulatory landscape in China, fluctuations in our quarterly
operating results, our continued ability to execute business strategies
including our SouFun membership services and SouFun Online Shop, our ability
to continue to expand in local markets, our reliance on online advertising
sales and listing services for our revenues, any failure to successfully
develop and expand our content, service offerings and features, including the
success of new features to meet evolving market needs, and the technologies
that support them, and, should we in the future make acquisitions, any failure
to successfully integrate acquired businesses.

Further information regarding these and other risks and uncertainties is
included in our annual report on form 20-F and other documents we have filed
with the U.S. Securities and Exchange Commission. SouFun does not assume any
obligation to update any forward-looking statements in this release and
elsewhere, which apply only as of the date of this press release.

About Non-GAAP Financial Measures

To supplement SouFun's consolidated financial results presented in accordance
with United States Generally Accepted Accounting Principles ("GAAP"), SouFun
uses in this press release the following measures defined as non-GAAP
financial measures by the United States Securities and Exchange Commission:
(1) operating income, (2) net income and (3) basic and diluted earnings per
ordinary share. The presentation of the non-GAAP financial information 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 "Reconciliation of GAAP and non-GAAP Results" set forth at the end
of this press release.

SouFun believes that these non-GAAP financial measures provide meaningful
supplemental information to investors regarding its operating performance by
excluding share-based compensation expenses and the related tax effects, as
well as a one-time gain on purchase for the three months ended March 31, 2013,
which (1) may not be indicative of SouFun's recurring core business operating
results or (2) are not expected to result in future cash payments. These
non-GAAP financial measures also facilitate management's internal comparisons
to SouFun'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 has been and will continue to be a significant
recurring expense that will continue to exist in SouFun'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 have more details on the reconciliation
between non-GAAP financial measures and their most directly comparable GAAP
financial measures.

For investor and media inquiries, please contact:

Ms.YiwenZhang
Investor Relations Manager
SouFun Holdings Limited
Phone:+86-10-5631 8659
Fax:+86-10-5631 8709
E-mail:zhangyiwen@soufun.com

Or

Mr. Hong Zhao
Vice President of Finance
SouFun Holdings Limited
Phone: +86-10-5631-8707
Fax: +86-10-5631 8709
E-mail:hongzhao@soufun.com

SouFun Holdings Limited
Condensed Consolidated Balance Sheets
( in thousands of U.S. dollars, except as noted )
ASSETS                                              March 31,     Dec 31,
                                                    2013          2012
Current assets:                                      (Unaudited)   (Audited)
 Cash and cash equivalents                           178,331       118,167
 Short-term investments                              26,987        26,841
 Accounts receivable, net                            33,344        30,029
 Funds receivable                                    20,279        7,600
 Prepayment and other current assets

 (including related party balance of nil and US$50   6,837         9,226
 as of December 31, 2012 and March 31, 2013,
 respectively)
 Deferred tax assets, current                        2,774         2,734
Total current assets                                268,552       194,597
Non-current assets:
 Property and equipment, net                         219,969       79,564
 Restricted cash, non-current                        392,452       391,416
 Deferred tax assets, non-current                    2,517         1,723
 Deposit for non-current assets                      8,773         8,750
 Prepayment for BaoAn acquisition                    —             111,367
 Other non-current assets                            16,116        13,744
Total non-current assets                             639,827       606,564
Total assets                                         908,379       801,161
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Short-term loans                                    270,670       270,670
 Deferred revenue                                    89,618        65,871
 Accrued expenses and other liabilities              96,004        89,306
 Customers' refundable fees                          36,852        18,449
 Income tax payable                                  27,428        23,659
Total current liabilities                            520,572       467,955
Non-current liabilities:
 Long-term loans                                     80,750        80,750
 Deferred tax liabilities, non-current               83,854        64,947
 Other non-current liabilities                       919           —
Total non-current liabilities                        165,523       145,697
Total Liabilities                                  686,095       613,652
Equity:
 Class A ordinary shares, par value Hong Kong                     
 Dollar ("HK$") 1 per share, 600,000,000 shares
 authorized for Class A and Class B in aggregate,                 
 and 56,013,735 shares and 56,458,493 shares
 issued and outstanding as at December 31, 2012                   
 and March 31, 2013, respectively
                                                     7,249         7,192
 Class B ordinary shares, par value HK$1 per                      

 share, 600,000,000 shares authorized for Class A                 
 and Class B in aggregate, and 24,336,650 shares
 and 24,336,650 shares issued and outstanding as                  
 at December 31, 2012 and March 31, 2013,
 respectively                                        3,124         3,124
 Additional paid-in capital                          74,465        69,637
 Accumulated other comprehensive income              25,420        23,974
 Retained earnings                                   111,361       82,952
Total SouFun Holdings Limited shareholders' equity   221,619       186,879
 Noncontrolling interests                            665           630
Total equity                                         222,284       187,509
TOTAL LIABILITIES AND EQUITY                        908,379       801,161





SouFun Holdings Limited
Condensed Consolidated Statements of Comprehensive Income
( in thousands of U.S. dollars, except share data and per share data )
                                                      Three months ended
                                                      March 31,   March 31,
                                                      2013         2012
Revenues:
 Marketing services                                  35,813       34,252
E-commerce services                                  26,363       12,045
 Listing services                                    26,834       10,934
 Other value-added services                          2,024        1,259
Total revenues                                         91,034       58,490
Cost of revenues:
 Cost of services                                     (20,030)     (16,522)
Total cost of revenues                                 (20,030)     (16,522)
Gross Profit                                           71,004       41,968
Operating expenses:
 Selling expenses                                     (18,732)     (14,458)
 General and administrative expenses                  (15,060)     (13,299)
Total operating expenses                               (33,792)     (27,757)
Operating Income                                       37,212       14,211
Foreign exchange loss                             —            (2)
 Interest income                                   5,678        4,427
Interest expense                                       (3,337)      (2,617)
 Government grants                                 422          437
Other-than-temporary impairment on                    —            (14)
 available-for-sale security
Gain on bargain purchase                               102
Income before income taxes and                         40,077       16,442
 noncontrolling interests
Income tax expenses
 Income tax expenses                                  (11,633)     (1,908)
Net income                                             28,444       14,534
Net income attributable to noncontrolling interests    35           —
Net income attributable to SouFun Holdings             28,409       14,534
 Limited's shareholders


Other comprehensive income, net of tax
Foreign currency translation                           1,368        139
Unrealized gain on available-for-sale security         78           —
Other comprehensive income, net of tax                 1,446        139
Comprehensive income                                   29,890       14,673

                                                       35           —
Comprehensive income attributable to
 noncontrolling interests
Comprehensive income attributable to SouFun Holdings   29,855       14,673
 Limited's shareholders
Basic                                                  0.36         0.19
Diluted                                                0.34         0.18
Weighted average number of Class A and
Class B ordinary shares outstanding:
Basic                                                  77,898,531   76,805,249
Diluted                                                83,308,983   81,068,135





SouFun Holdings Limited
Reconciliation of GAAP and Non-GAAP Results
( in thousands of U.S. dollars, except share data and per share data)


                                              Three months ended
                                              March 31, 2013   March 31, 2012
GAAP income from operations                    37,212           14,211
Share-based compensation                       1,763            1,262
Non-GAAP income from operations                38,975           15,473
GAAP net income                                28,444           14,534
One-off tax benefit                            —                (1,631)
Withholding tax related to dividends           3,149            —
Other-than-temporary impairment on
available-for-sale                             —                14
security
Share-based compensation                       1,763            1,262
Gain on bargain purchase                       (102)            —
Non-GAAP net income                            33,254           14,179
Net Income attributable to
SouFun Holdings Limited shareholders           28,409           14,534

One-off tax benefit                            —                (1,631)
Withholding tax related to dividends           3,149            —
Other-than-temporary impairment on             —                14
available-for-sale security
Share-based compensation expense               1,763            1,262
Gain on bargain purchase                       (102)            —
Non-GAAP net Income attributable to            33,219           14,179
SouFun Holdings Limited shareholders
GAAP earnings per share for Class A
and Class B ordinary shares:
Basic                                          0.36             0.19
Diluted                                        0.34             0.18
Non-GAAP earnings per share for
Class A and Class B ordinary shares:
Basic                                          0.43             0.18
Diluted                                        0.40             0.17
Weighted average number of Class A
and Class B ordinary shares outstanding:
Basic                                          77,898,531       76,805,249
Diluted                                        83,308,983       81,068,135
                                               

                                               Three months ended
                                               March 31, 2013   March 31, 2012
Non-GAAP net income                            33,254           14,179
Add back:
Interest expense                               3,337            2,617
Income tax expenses                            8,484            3,539
Depreciation expenses                          1,499            1,537
Subtract:
Interest income                               (5,678)          (4,427)
Non-GAAP EBITDA                                40,896           17,445





SOURCE SouFun Holdings Limited

Website: http://ir.soufun.com
 
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