Home Inns Reports Third Quarter of 2009 Financial Results

Home Inns & Hotels Management Inc. (Nasdaq: HMIN), a leading economy hotel chain in China, today announced its unaudited financial results for the third quarter ended September 30, 2009.

Third Quarter 2009 Financial Highlights

-- Total revenues for the quarter increased 37.9% year-over-year to RMB 727.4 million (US$ 106.6 million), exceeding guidance of RMB 685 million to RMB 705 million.

Net income attributable to shareholders for the quarter was RMB 86.7 million (US$ 12.7 million), including gain on buy-back of convertible bonds of RMB 4.3 million (US$ 0.6 million), and share-based compensation expenses of RMB 7.8 million (US$ 1.1 million). This compares to a net income attributable to shareholders of RMB 29.5 million (US$ 4.3 million) in the third quarter of 2008, which included share based compensation of RMB 6.6 million (US$ 1.0 million) and foreign exchange loss of RMB 2.4 million (US$ 0.3 million).

Income from operations for the quarter was RMB 107.9 million (US$ 15.8 million), compared to income from operations of RMB 41.8 million (US$ 6.2 million) in the same period of 2008. Income from operations excluding share-based compensation expenses (non-GAAP) was RMB 115.6 million (US$ 16.9 million) for the quarter, compared to RMB 48.4 million (US$ 7.1 million) in the same period of 2008, representing an increase of 139% year-over-year.

EBITDA (non-GAAP) for the quarter was RMB 187.5 million (US$ 27.5 million). Excluding gain on buy-back of convertible bonds, foreign exchange loss and share-based compensation expenses, adjusted EBITDA (non-GAAP) for the quarter was RMB 191.0 million (US$ 28.0 million), compared to RMB 102.5 million (US$ 15.1 million) in the same period of 2008, representing an increase of 86.4% year-over-year.

Diluted earnings per ADS for the quarter were RMB 1.98 (US$ 0.29), while adjusted diluted earnings per ADS (Non-GAAP) for the quarter were RMB 2.15 (US$ 0.31).

Diluted earnings per ADS and adjusted diluted earnings per ADS exclude gain on buy-back of convertible bonds. Adjusted diluted earnings per ADS also exclude foreign exchange loss and share-based compensation expenses. Please refer to "Reconciliations of GAAP and Non-GAAP Results" at the end of this press release.

"Home Inns has performed above expectations during the third quarter, as we benefited from both an improving economic situation in China and our implementation of certain initiatives at the beginning of the financial crisis," commented Mr. David Sun, Home Inns Chief Executive Officer. "Due to the strong performance at our hotels as well as our restrained expansion efforts, we exceeded our revenue guidance while simultaneously achieving strengthened margins. We are confident that we will see a continued improvement in our performance during the rest of 2009, and that in 2010 we will be able to successfully execute our strategic business initiatives, including the continued expansion of our company throughout China."1234