7 Days Group Holdings Limited Announces Unaudited 2013 First Quarter Financial Results

7 Days Group Holdings Limited Announces Unaudited 2013 First Quarter Financial
                                   Results

- First quarter 2013 net revenues rose 17.5% year-over-year to RMB640.5
million, exceeding guidance.

- 82 net hotels added in first quarter to a total of 1,427 hotels in
operation.

- Total transaction value[1], a measure of total room revenue generated from
all hotels, reached RMB1,519.9 million in first quarter 2013, an increase of
32.9% year-over-year.

PR Newswire

GUANGZHOU, China, May 13, 2013

GUANGZHOU, China, May 13, 2013 /PRNewswire/ -- 7 Days Group Holdings Limited
("7 Days Group" or the "Company") (NYSE: SVN), a leading and fast growing
national economy hotel chain based in China, today announced its unaudited
financial results for the first quarter 2013.

First Quarter 2013 Financial Highlights

  oTotal net revenues for the first quarter 2013 increased by 17.5%
    year-over-year to RMB640.5 million (US$103.1 million)  [2].
  oIncome from operations for the first quarter 2013 was RMB13.7 million
    (US$2.2 million), compared to RMB23.3 million in the first quarter 2012.
    Non-GAAP income from operations for the quarter was RMB20.4 million
    (US$3.3 million), compared to RMB32.2 million for the same period in
    2012.
  oEBITDA for the first quarter was RMB106.2 million (US$17.1 million), an
    increase of 0.4% year-over-year from RMB105.8 million for the same period
    in 2012. Adjusted EBITDA for the quarter was RMB112.9 million (US$18.2
    million), a decrease of 1.5% year-over-year. EBITDA margin was 16.6%
    compared to 19.4% in the same period in 2012. Adjusted EBITDA margin was
    17.6%, compared to 21.0% in the prior year period.
  oNet income attributable to the Company's ordinary shareholders for the
    quarter was RMB5.4 million (US$0.9 million), compared to RMB19.0 million
    for the same period in 2012. Non-GAAP net income attributable to the
    Company's ordinary shareholders for the quarter was RMB12.1 million
    (US$2.0 million), representing a year-over-year decrease of 56.4%.
  oBasic and diluted earnings per ADS[3] were RMB0.11 (US$0.02) and RMB0.11
    (US$0.02) respectively. Non-GAAP basic and diluted earnings per ADS were
    RMB0.25 (US$0.04) and RMB0.25 (US$0.04), respectively.
  oNet operating cash inflow was RMB76.6 million (US$12.3 million), compared
    to RMB93.8 million in the same period in 2012.

    Definition of Total transaction value: total room revenue from
[1] leased-and-operated hotels and managed hotels. The metric is highlighted
    as an indicator of the scale and reach of 7 Days' brands.
    The Company's reporting currency is Renminbi ("RMB"). The translation of
    amounts from RMB to United States Dollars is solely for the convenience of
    the reader. RMB amounts included in this press release have been
[2] translated into U.S. dollars at the exchange rate of March 31, 2013 as set
    forth in the H.10 statistical release of the Federal Reserve Board, which
    was US$1.00 = RMB6.2108. No representation is made that RMB amounts could
    have been, or could be, converted into U.S. Dollars at that rate or at any
    other rate on March 31, 2013.
[3] Each ADS represents 3 of the Company's ordinary shares.

First Quarter 2013 Operational Highlights

  oAdded 82 net hotels, comprising 8 net leased-and-operated hotels and 74
    net managed hotels in the first quarter 2013.
  oAs of March 31, 2013, 7 Days Group had 1,427 hotels in operation,
    consisting of 500 leased-and-operated hotels and 927 managed hotels,
    representing a total of 141,091 rooms covering 223 cities.
  oAs of March 31, 2013, there were a total of 223 hotels in the pipeline,
    including 14 leased-and-operated hotels under conversion and 209 managed
    hotels contracted but not yet opened.
  oFor the first quarter 2013, occupancy rates for leased-and-operated
    hotels, managed hotels and all hotels were 75.0%, 75.5% and 75.3%,
    respectively, compared to 79.5%, 76.3% and 77.7%, respectively, in the
    first quarter 2012. The year-over-year decrease in occupancy rates was
    primarily a result of the impact from the macro economic situation.
  oRevPAR[4] for leased-and-operated hotels in the first quarter 2013 was
    RMB124.1, compared to RMB128.8 in the same period in 2012. RevPAR for
    managed hotels for the period was RMB117.1, compared to RMB116.0 for the
    same period in 2012.
  oAs of March 31, 2013, the number of 7 Days Club members was approximately
    56.3 million, a 46% increase from 38.6 million as of March 31, 2012.

[4] RevPAR represents revenue per available room

Recent Business Developments:

Mr. Yuezhou Lin, 7 Days Group's Chief Executive Officer and Director,
commented, "We are pleased to report a strong first quarter with financial
results exceeding our guidance, setting a solid start for year 2013. Our
outlook for the remainder of 2013 is favorable, as we have built a healthy
pipeline and expect to benefit from the increasing economies of scale. We
expect to maintain our fast expansion pace, therefore to solidify our market
leader position in the economy hotel industry."

First Quarter 2013 Unaudited Financial Results

Gross revenues.  Gross revenues for the first quarter 2013 were RMB678.1
million (US$109.2 million), representing a year-over-year increase of 17.4%
from RMB577.6 million in the first quarter 2012.

Gross revenues from leased-and-operated hotels.  Gross revenues from
leased-and-operated hotels for the first quarter 2013 amounted to RMB596.9
million (US$96.1 million), representing a 14.9% increase from RMB519.5 million
in the first quarter 2012.

Gross revenues from managed hotels. Gross revenues from managed hotels for the
first quarter 2013 increased by 39.5% to RMB81.2 million (US$13.1 million)
from RMB58.2 million in the same period in 2012. During the first quarter
2013, the Company opened 74 net managed hotels.

Total net revenues. Total net revenues for the first quarter 2013 totaled
RMB640.5 million (US$103.1 million), representing a year-over-year increase of
17.5% from RMB545.0 million in first quarter 2012, primarily resulting from
the continued growth in the number of hotels in operation.

Hotel operating costs.  Hotel operating costs for the first quarter 2013 were
RMB556.9 million (US$89.7 million), or 86.9% of total net revenues, compared
with 85.6% of total net revenues in the first quarter 2012 and 80.5% of total
net revenues in the fourth quarter 2012.

Sales and marketing expenses. Sales and marketing expenses for the first
quarter 2013 were RMB16.1 million (US$2.6 million), or 2.5% of total net
revenues, compared with 2.3% of total net revenues in the same period of 2012
and 4.6% in the fourth quarter 2012.

General and administrative expenses.  General and administrative expenses for
the first quarter 2013 were RMB53.8 million (US$8.7 million), or 8.4% of total
net revenues, compared to RMB42.8 million, or 7.9% of total net revenues in
the same period of 2012, and RMB52.6 million, or 7.6% of total net revenues in
the fourth quarter 2012. The increase in general and administrative expenses
was primarily due to the expenses associated with the going-private
transaction involving the Company. The going-private related expenses incurred
during the quarter were RMB11.7 million , about 1.83% of total net revenues.

Accordingly, total operating costs and expenses amounted to RMB626.8 million
(US$100.9 million), representing 97.9% of total net revenues, compared to
95.7% of total net revenues in the same period of 2012 and 92.7% in the fourth
quarter 2012.

Income from operations. Income from operations for the first quarter 2013 was
RMB13.7 million (US$2.2 million), compared to RMB23.3 million in the first
quarter 2012 and RMB51.1 million in the fourth quarter 2012. Non-GAAP income
from operations was RMB20.4 million (US$3.3 million), compared to RMB32.2
million for the same period of 2012 and RMB56.3 million in the fourth quarter
2012.

EBITDA.  EBITDA for the first quarter was RMB106.2 million (US$17.1 million),
an increase of 0.4% year-over-year from RMB105.8 million for the same period
in 2012. Adjusted EBITDA for the quarter was RMB112.9 million (US$18.2
million), representing a decrease of 1.5% year-over-year from RMB114.6 million
for the same period in 2012. EBITDA margin was 16.6% compared to 19.4% in the
same period in 2012. Adjusted EBITDA margin was 17.6% compared to 21.0% in the
prior year period.

Interest expense. Interest expense for the first quarter 2013 was RMB4.6
million, (US$0.7 million) compared to RMB6.4 million for the same period of
2012 and RMB2.9 million in the fourth quarter 2012.

Income tax expense.  Income tax expense for the first quarter 2013 was RMB7.0
million (US$1.1 million), compared to RMB7.3 million in the same period of
2012 and RMB13.8 million in the fourth quarter 2012.

Net income  attributable to 7 Days Group Holdings Limited ordinary
shareholders. Net income attributable to 7 Days Group Holdings Limited
ordinary shareholders was RMB5.4 million (US$0.9 million) in the first quarter
2013, compared to RMB19.0 million in the first quarter 2012 and RMB37.9
million in the fourth quarter 2012.

Non-GAAP net income.  Non-GAAP net income was RMB12.1 million (US$2.0
million), compared to Non-GAAP net income of RMB27.8 million for the first
quarter 2012 and Non-GAAP net income of RMB43.1 million in the fourth quarter
2012.

Basic and diluted earnings per ADS.  Basic and diluted earnings per ADS were
RMB0.11 (US$0.02) and RMB0.11 (US$0.02), respectively, for the first quarter
2013, compared to basic and diluted earnings per ADS of RMB0.38 in the first
quarter 2012 and basic and diluted earnings per ADS of RMB0.77 in the fourth
quarter 2012. Non-GAAP basic and diluted earnings per ADS were RMB0.25
(US$0.04) and RMB0.25 (US$0.04), respectively, for the first quarter 2013,
compared to non-GAAP basic and diluted earnings per ADS of RMB0.56 and
RMB0.55, respectively, in the same period of 2012 and basic and diluted
earnings per ADS of RMB0.88 and RMB0.88, respectively, in the fourth
quarter2012.

Cash and pledged bank deposits. As of March 31, 2013, the Company had cash and
pledged bank deposits of RMB379.2 million (US$61.1 million), representing a
quarter-over-quarter decrease of 0.8% from RMB382.3 million as of December 31,
2012 and a year-over-year decrease of 19.2% from RMB469.6 million as of March
31, 2012, respectively.

Operating cash flow. Net operating cash inflow for the first quarter 2013 was
RMB76.6 million (US$12.3 million), representing a decrease of 18.3% from
RMB93.8 million in the first quarter 2012.

Guidance

The Company expects to generate total net revenues in the range of RMB735
million to RMB745 million in the second quarter 2013. These forecasts reflect
the Company's current and preliminary view, which is subject to change.

Change in Directorship

Mr. Jeffrey Perlman, a member of the Company's board of directors, resigned as
a Company director late last week. "On behalf of the Company and its board of
directors, we would like to thank Mr. Perlman for his valuable contributions
and service during the last two years," said Mr. Boquan He, Co-Chairman of the
Company. "We wish Jeff every success in the future."

Conference Call

7 Days Group Holdings Limited senior management will host a conference call at
10:00 pm (Eastern) / 7:00 pm (Pacific) Monday, May 13, 2013, which is 10:00 am
(Beijing) on Tuesday, May 14, 2013 to discuss its first quarter 2013 financial
results and recent business activity. The conference call may be accessed by
calling the following numbers:

China:         800 8190 121
Hong Kong:     852 2475 0994
US Toll Free:  1 866 519 4004
US New York:   1 718 354 1231
International: 65 6723 9381
Passcode:      7 Days

A live webcast of the conference call and replay will be available on the
investor relations page of 7 Days Group's website at http://en.7daysinn.cn/.

A telephone replay will be available shortly after the call. The dial-in
details are as follows:

US:                   1 855 452 5696
International:        61 2 8199 0299
Conference ID number: 57969157

About 7 Days Group Holdings Limited

7 Days Group is a leading and fast growing national economy hotel chain based
in China. It converts and operates limited service economy hotels across major
metropolitan areas in China under its award-winning "7 Days Inn" brand. The
Company strives to offer consistent and high-quality accommodations and
services primarily to the growing population of value conscious business and
leisure travelers who demand affordable, clean, comfortable, convenient and
safe lodging, and to respond to its guests' needs.

Use of Non-GAAP Financial Measures

To supplement 7 Days Group's unaudited financial results presented in
accordance with U.S. GAAP, the Company has used the following non-GAAP
measures defined as non-GAAP financial measures by the Securities and Exchange
Commission (the "SEC") to report its financial results:

  oNon-GAAP income from operations represents income from operations reported
    in accordance with GAAP, excluding share-based compensation expense.
  oNon-GAAP net income represents net income reported in accordance with
    GAAP, excluding share-based compensation expense.
  oNon-GAAP earnings per ADS represents non-GAAP net income divided by the
    number of ADS used in computing basic and diluted earnings per ADS.
  oEBITDA represents net income reported in accordance with GAAP, adjusted
    for the effects of interest income and expense, provision for income
    taxes, depreciation and amortization.
  oAdjusted EBITDA represents EBITDA, excluding share-based compensation
    expense.

The Company believes EBITDA is a useful financial metric to assess its
operating and financial performance before the impact of investing and
financing transactions, if any, and income taxes. In addition, 7 Days Group
believes that EBITDA is widely used by other companies in the lodging industry
and may be used by investors as a measure of its financial performance. Given
the significant investments that 7 Days Group has made in the past in property
and equipment, depreciation and amortization expense comprises a meaningful
portion of its cost structure. 7 Days Group believes that EBITDA will provide
investors with a useful tool for comparability between periods because it
eliminates depreciation and amortization expense attributable to capital
expenditures. The presentation of EBITDA should not be construed as an
indication that the Company's future results will be unaffected by other
charges and gains the Company considers to be outside the ordinary course of
its business. 7 Days Group also calculates Adjusted EBITDA excluding
share-based compensation expense. The Company prepares its financial
statements in accordance with GAAP and, accordingly, expenses its employee
share options. Since share-based compensation expenses are non-cash expenses,
the Company believes excluding them from its calculation of EBITDA allows it
to provide investors with a more useful tool for assessing its operating and
financial performance.

The use of EBITDA and Adjusted EBITDA has certain limitations. Depreciation
and amortization expense for various long-term assets, such as property and
equipment, income tax expense, interest expense and interest income have been
and will be incurred and are not reflected in the presentation of EBITDA. Each
of these items should also be considered in the overall evaluation of its
results. Additionally, EBITDA does not consider capital expenditures and other
investing activities and should not be considered as a measure of the
Company's liquidity. The Company compensates for these limitations by
providing the relevant disclosure of its depreciation and amortization,
interest expense and interest income, income tax expense, capital
expenditures, share-based compensation expense and other relevant items both
in its reconciliations to the GAAP financial measures and in its consolidated
financial statements, all of which should be considered when evaluating the
Company's performance. The terms EBITDA and Adjusted EBITDA are not defined
under GAAP, and EBITDA and Adjusted EBITDA are not measures of net income,
operating income, operating performance or liquidity presented in accordance
with GAAP. When assessing the Company's operating and financial performance,
investors should not consider this data in isolation or as a substitute for
the Company's net income, operating income or any other operating performance
measure that is calculated in accordance with GAAP. In addition, the Company's
EBITDA and Adjusted EBITDA may not be comparable to EBITDA or Adjusted EBITDA
or similarly titled measures utilized by other companies since such other
companies may not calculate EBITDA and Adjusted EBITDA in the same manner as
the Company does.

For reasons same to the use of EBITDA and Adjusted EBITDA described above, the
Company has also reported net income, basic and diluted earnings per ADS and
income (loss) from operations on a non-GAAP basis, excluding share-based
compensation expenses in the relevant period. These non-GAAP operating
measures are useful for understanding and assessing the Company's underlying
business performance and operating trends and the Company expects to report
net income, basic and diluted earnings per ADS and income from operations on a
non-GAAP basis using a consistent method on a quarterly basis going forward.

7 Days Group believes that both management and investors benefit from
referring to these non-GAAP financial measures in assessing 7 Days Group's
financial performance and liquidity and when planning and forecasting future
periods. Readers are cautioned not to view non-GAAP results on a stand-alone
basis or as a substitute for results under GAAP, or as being comparable to
results reported or forecasted by other companies, and should refer to the
reconciliation of GAAP results with non-GAAP results for the periods set forth
in the tables at the end of this release.

Safe Harbor Statement

This press release 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, and as defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar statements
and including, among other things, 7 Days Group's revenue guidance for the
second quarter 2013 and business forecast for 2013 including the expected
number of hotel to be opened (including the breakdown of expected new
leased-and-operated hotels and new managed hotels), Company's business
strategies, its ability to offer consistent and high-quality accommodations
and services at an affordable price, its ability to leverage economies of
scale and its ability to achieve strict cost controls and to deliver continued
growth. These forward-looking statements are not historical facts but instead
represent only the Company's belief regarding future events, many of which, by
their nature, are inherently uncertain and outside of the Company's control.
The Company's actual results and financial condition and other circumstances
may differ, possibly materially, from the anticipated results and financial
condition indicated in these forward-looking statements. In particular, the
Company's operating results for any period are impacted significantly by the
mix of leased-and-operated hotels and managed hotels in its chain, causing the
Company's operating results to fluctuate and making them difficult to predict.

Other factors that could cause forward-looking statements to differ materially
from actual future events or results include risks and uncertainties related
to: uncertainties associated with factors typically affecting the lodging
industry, including changes in economic conditions, adverse weather
conditions, natural disasters or outbreaks of serious contagious diseases in
markets where the Company has a presence; uncertainties regarding the
Company's ability to respond to competitive pressures; uncertainties regarding
the Company's ability to manage its expected growth; uncertainties regarding
the Company's ability to continue its growth and achieve profitability; risks
associated with the Company's limited operating history and historical
operating losses; uncertainties regarding the Company's ability to fund its
working capital needs; uncertainties regarding its ability to successfully and
timely identify, secure or operate additional hotel properties. The financial
information contained in this release should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
2012 Annual Report on Form 20-F filed with the SEC on April 10, 2013, which is
available on the SEC's website at www.sec.gov. For a discussion of other
important factors that could adversely affect the Company's business,
financial condition, results of operations and prospects, see "Risk Factors"
beginning on page 17 of the Company's 2012 Annual Report on Form 20-F. The
Company's results of operations for the first quarter 2013 are not necessarily
indicative of its operating results for any future periods. Any projections in
this release are based on limited information currently available to the
Company, which is subject to change. Although such projections and the factors
influencing them will likely be changed, the Company will not necessarily
update the information. Such information speaks only as of the date of this
release.

Statement Regarding Unaudited Financial Information

The financial information set forth above is unaudited and subject to
adjustments. Adjustments to the financial statements may be identified when
the annual financial statements are prepared and audit work is performed for
the year end audit, which could result in significant differences from this
unaudited financial information.

Contacts:

Investor Contact:
Vivian Chen, Investor Relations Director
7 Days Group Holdings Limited
+86-20-8922-5858
IR@7daysinn.cn

Investor Relations (US):
Mahmoud Siddig, Managing Director
Taylor Rafferty
Tel: +1 (212) 889-4350
7DaysInn@taylor-rafferty.com

Investor Relations (HK):
Candy Cheung, Senior Consultant
Taylor Rafferty
+852 3196 3712
7DaysInn@taylor-rafferty.com



-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --



7 Days Group Holdings Limited
Consolidated balance sheet information
                                      Quarter Ended
                                      31/Mar/12  31/Dec/12  31/Mar/13
                                      RMB' 000   RMB' 000   RMB' 000  US$'000
ASSETS
Current assets:
Cash                                  466,556    378,809    375,321   60,430
Pledged bank deposits                 3,054      3,443      3,897     627
Short-term investment                 60,000     -          -         -
Accounts receivable                   6,758      17,015     13,919    2,241
Prepaid rent                          158,746    171,370    176,589   28,433
Other prepaid expenses and current    56,059     77,608     77,399    12,462
assets
Hotel supplies                        46,826     56,591     46,204    7,439
Amounts due from related parties      71         87         15        2
Deferred tax assets                   19,978     26,222     26,406    4,252
Total current assets                818,048    731,145    719,750   115,886
Property and equipment, net           1,679,664  1,970,763  1,927,978 310,423
Rental deposits                       79,091     90,824     93,618    15,073
Land use right                        23,889     23,426     23,272    3,747
Prepaid rent                          63,268     71,088     68,328    11,001
Intangible assets, net                29,374     26,221     25,170    4,053
Goodwill                              61,041     61,041     61,041    9,828
Other non-current assets              500        -          -         -
Deferred tax assets                   53,287     62,513     63,518    10,227
Total assets                        2,808,162  3,037,021  2,982,675 480,238
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable                      208,758    300,240    230,034   37,038
Bills payable                         10,177     11,475     12,990    2,092
Short-term bank borrowings            342,993    130,015    187,377   30,170
Accrued expenses and other payables   403,048    511,800    471,170   75,863
Amounts due to related parties        1,793      2,601      3,204     516
Income taxes payable                  19,694     25,617     21,858    3,519
Total current liabilities           986,463    981,748    926,633   149,198
Long-term bank borrowings             26,930     121,381    97,329    15,671
Accrued lease payment                 218,184    256,472    263,404   42,411
Unfavorable lease contract liability  7,643      7,136      6,967     1,122
Refundable deposits                   15,250     14,850     15,750    2,536
Deferred revenue                      748        -          -         -
Deferred rebate income                6,350      5,727      6,916     1,114
Borrowings from related parties       1,238      752        -         -
Income taxes payable                  6,644      3,317      3,317     534
Deferred tax liabilities              3,039      7,527      6,977     1,123
Total liabilities                   1,272,489  1,398,910  1,327,293 213,709
Equity:
Ordinary shares                       141,097    141,317    141,610   22,801
Treasury stock                        -          (67,137)   (67,137)  (10,810)
Additional paid-in capital            1,632,426  1,649,880  1,664,124 267,940
Accumulated other comprehensive       (475)      (721)      (941)     (152)
income
Accumulated deficit                   (219,379)  (62,303)   (56,859)  (9,158)
Total 7 Days Group Holdings Limited   1,553,669  1,661,036  1,680,797 270,621
share holders' equity
Non-controlling interests             (17,996)   (22,925)   (25,415)  (4,092)
Total equity                          1,535,673  1,638,111  1,655,382 266,529
Total liabilities and equity          2,808,162  3,037,021  2,982,675 480,238





7 Days Group Holdings Limited

Unaudited Consolidated Statements of Comprehensive Income


                                     Quarter Ended
                                     Mar 31     Dec 31     Mar 31
                                     2012       2012       2013
                                     RMB'000    RMB'000    RMB'000   US$'000
Total Revenues                      577,639    736,385    678,110   109,182
Leased-and-operated hotels          519,459    648,427    596,929   96,111
Managed hotels                      58,180     87,958     81,181    13,071
Less: Business tax and surcharges   (32,612)   (40,355)   (37,570)  (6,049)
Net revenues                        545,027    696,030    640,540   103,133
Operating costs and expenses
Hotel operating costs               (466,480)  (560,637)  (556,912) (89,668)
Rental expenses                      (165,391)  (190,645)  (192,826) (31,047)
Staff cost                           (89,142)   (114,169)  (116,089) (18,691)
Depreciation and amortization        (73,021)   (84,790)   (87,435)  (14,078)
Hotel supplies                       (24,468)   (40,439)   (34,268)  (5,517)
Utilities                            (57,773)   (46,554)   (60,954)  (9,814)
Other                                (56,685)   (84,040)   (65,340)  (10,521)
Sales and marketing expenses        (12,459)   (31,702)   (16,097)  (2,592)
General and administrative          (42,785)   (52,555)   (53,806)  (8,663)
expenses
Total operating costs and expenses  (521,724)  (644,894)  (626,815) (100,923)
Income from operations              23,303     51,136     13,725    2,210
Other income (expenses)
Interest income                     2,109      800        1,099     177
Interest expense                    (6,385)    (2,875)    (4,591)   (739)
Income before income tax            19,027     49,061     10,233    1,648
 Income tax expenses               (7,341)    (13,844)   (7,043)   (1,134)
Net income                          11,686     35,217     3,190     514
Net income attributable to          7,283      2,683      2,254     363
non-controlling interest
Net income attributable to 7 Days
Group                                18,969     37,900     5,444     877
 Holdings Limited ordinary
shareholders
Basic earnings per ordinary share   0.13       0.26       0.04      0.01
Diluted earnings per ordinary share 0.13       0.26       0.04      0.01
Other Comprehensive loss
 Foreign currency transaction       (805)      (1,857)    (220)     (35)
adjustment, net of nil tax
Comprehensive income                10,881     33,360     2,970     479
 Less: Comprehensive income
attributable to                      (7,283)    (2,683)    (2,254)   (363)
 noncontrolling interest
Comprehensive income attributable
to 7 Days                            18,164     36,043     5,224     842
 Group Holdings Limited ordinary
shareholders





7 Days Group Holdings Limited

Reconciliation of GAAP and Non-GAAP Results


EBITDA(non-GAAP)
                                             Quarter Ended
                                             Mar 31   Dec 31   Mar 31
                                             2012     2012     2013
                                             RMB'000  RMB'000  RMB'000 US$'000
Net income attributable to 7 Days Group      18,969   37,900   5,444   877
Holdings Limited ordinary shareholders
Interest income                              (2,109)  (800)    (1,099) (177)
Interest expense                             6,385    2,875    4,591   739
Income tax expenses                          7,341    13,844   7,043   1,134
Depreciation and amortization                75,170   87,429   90,226  14,527
EBITDA (non-GAAP)                            105,756  141,248  106,205 17,100
EBITDA%                                      19.4%    20.3%    16.6%   16.6%
Share-based compensation expenses            8,868    5,187    6,682   1,076
Adjusted EBITDA (non- GAAP) excluding        114,624  146,435  112,887 18,176
share-based compensation expenses
Adjusted EBITDA%                             21.0%    21.0%    17.6%   17.6%





Non-GAAP net income attributable to 7 Days Group Holdings Limited ordinary
shareholders
                                             Quarter Ended
                                             Mar 31   Dec 31   Mar 31
                                             2012     2012     2013
                                             RMB'000  RMB'000  RMB'000 US$'000
Net income attributable to 7 Days Group
Holdings Limited ordinary shareholders       18,969   37,900   5,444   877
(GAAP)
Share-based compensation expenses            8,868    5,187    6,682   1,076
Net income attributable to ordinary
shareholders excluding share-based           27,837   43,087   12,126  1,953
compensation expenses (Non GAAP net income)



Earnings per share
                                       Quarter Ended
                                       Mar 31        Dec 31        Mar 31
                                       2012          2012          2013
                                       RMB           RMB           RMB   USD
Basic earnings per ordinary share      0.13          0.26          0.04  0.01
(GAAP)
Diluted earnings per ordinary share    0.13          0.26          0.04  0.01
(GAAP)
Basic earnings per ordinary
share(Non-GAAP), excluding             0.19          0.29          0.08  0.01
share-based compensation expenses
Diluted earnings per ordinary
share(Non-GAAP), excluding             0.18          0.29          0.08  0.01
share-based compensation expenses
Denominator:
Basic weighted average number of       149,942,510   146,813,397   147,035,958
ordinary shares
Diluted weighted average number of     151,299,954   147,384,945   147,923,520
ordinary shares

                                    Quarter Ended
                                    31-Mar-12 31-Dec-12 31-Mar-13
                                    RMB '000  RMB '000  RMB'000   USD'000
Hotel operating cost
     GAAP Result                    (466,480) (560,637) (556,912) (89,668)
     % of Total net revenue         85.59%    80.55%    86.94%    86.94%
     Share-based Compensation       555       313       400       64
     % of Total net revenue         0.10%     0.04%     0.06%     0.06%
     Non-GAAP Result                (465,925) (560,324) (556,512) (89,604)
     % of Total net revenue         85.49%    80.50%    86.88%    86.88%
Sales and marketing expenses
     GAAP Result                    (12,459)  (31,702)  (16,097)  (2,592)
     % of Total net revenue         2.29%     4.55%     2.51%     2.51%
     Share-based Compensation       586       578       623       100
     % of Total net revenue         0.11%     0.08%     0.10%     0.10%
     Non-GAAP Result                (11,873)  (31,124)  (15,474)  (2,492)
     % of Total net revenue         2.18%     4.47%     2.42%     2.42%
General and administrative expenses
     GAAP Result                    (42,785)  (52,555)  (53,806)  (8,663)
     % of Total net revenue         7.85%     7.55%     8.40%     8.40%
     Share-based Compensation       7,727     4,296     5,659     911
     % of Total net revenue         1.42%     0.62%     0.88%     0.88%
     Non-GAAP Result                (35,058)  (48,259)  (48,147)  (7,752)
     % of Total net revenue         6.43%     6.93%     7.52%     7.52%
Total operating cost and expenses
     GAAP Result                    (521,724) (644,894) (626,815) (100,923)
     % of Total net revenue         95.72%    92.65%    97.86%    97.86%
     Share-based Compensation       8,868     5,187     6,682     1,076
     % of Total net revenue         1.63%     0.75%     1.04%     1.04%
     Non-GAAP Result                (512,856) (639,707) (620,133) (99,847)
     % of Total net revenue         94.10%    91.91%    96.81%    96.81%
Income from operations
     GAAP Result                    23,303    51,136    13,725    2,210
     % of Total net revenue         4.28%     7.35%     2.14%     2.14%
     Share-based Compensation       8,868     5,187     6,682     1,076
     % of Total net revenue         1.63%     0.75%     1.04%     1.04%
     Non-GAAP Result                32,171    56,323    20,407    3,286
     % of Total net revenue         5.90%     8.09%     3.19%     3.19%





7 Days Group Holdings Limited

Operating Data


                                                  As of and for

                                                  the Quarter Ended
                                                  Mar 31  Dec 31  Mar 31
                                                  2012    2012    2013
Hotels in operation                               1,044   1,345   1,427
Leased-and-operated hotels                        417     492     500
Managed hotels                                    627     853     927
Hotels under conversion                           189     223     223
Leased-and-operated hotels                        30      21      14
Managed hotels                                    159     202     209
Total hotel rooms for hotels in operation         104,191 133,497 141,091
Leased-and-operated hotels                        43,800  51,725  52,691
Managed hotels                                    60,391  81,772  88,400
Total hotel rooms for hotels under conversion     18,542  20,368  19,733
Number of cities covered for hotels in operation  162     208     223
Average occupancy rate                            77.7%   78.1%   75.3%
Leased-and-operated hotels                        79.5%   79.2%   75.0%
Managed hotels                                    76.3%   77.4%   75.5%
Average daily rate (in RMB)                       156.4   161.8   159.1
Leased-and-operated hotels                        161.9   168.5   165.5
Managed hotels                                    152.1   157.4   155.2
RevPAR (in RMB)                                   121.5   126.4   119.7
Leased-and-operated hotels                        128.8   133.4   124.1
Managed hotels                                    116.0   121.9   117.1



SOURCE 7 Days Group Holdings Limited

Website: http://www.7daysinn.com
 
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