eLong's (LONG) total unaudited revenues for the fourth quarter ended December 31, 2004, were US$4.9 million, an increase of 48% from US$3.3 million reported in the same period in 2003 and an increase of 6% from US$4.6 million reported in the previous quarter.
eLong recorded a net loss of CNY10.9 million (US$1.3 million) for the quarter. The US GAAP loss per ADS for the fourth quarter was CNY0.90 (US$0.108). Adjusted loss for the quarter (a non-GAAP measure), which excludes amortization of stock compensation and intangibles, was CNY7.8 million (US$944,000). Adjusted loss per ADS for the quarter (also a non-GAAP measure) was CNY0.62 (US$0.075). Please refer to the attached table for a reconciliation of net loss and loss per ADS under US GAAP to adjusted loss and adjusted loss per ADS.
Total revenues for fiscal 2004 were CNY138.5 million (US$16.7 million), an increase of 86% from CNY74.4 million (US$9.0 million) for fiscal 2003. eLong recorded a net loss of CNY21.0 million (US$ 2.5 million) for fiscal 2004. The US GAAP loss per ADS for fiscal 2004 was CNY2.33 (US$0.282). Adjusted loss for fiscal 2004 (a non-GAAP measure), which excludes amortization of stock compensation and intangibles, was CNY11.0 million (US$1.3 million). Adjusted loss per ADS for fiscal 2004 (a non-GAAP measure) was CNY1.20 (US$0.145). Please refer to the attached table for a reconciliation of net loss and loss per ADS under US GAAP to adjusted loss and adjusted loss per ADS.
Revenue from hotel reservations for the fourth quarter totaled CNY33.3 million (US$4.0 million), an increase of 52% year-over-year and 10% sequentially. The total number of hotel room nights booked through eLong in the fourth quarter was 582,000, compared with 536,000 in the previous quarter and 373,000 in the corresponding period a year ago. Growth in hotel reservation revenues was due primarily to an increase in the number of customers selecting eLong for their travel needs.
Revenue from hotel reservations for fiscal 2004 totaled CNY111.4 million (US$13.5 million), an increase of 85% year-over-year. The total number of hotel room nights booked through eLong in fiscal 2004 was 1.96 million compared with 1.03 million in fiscal 2003.
As of December 31, 2004, eLong's customers were able to book hotel rooms through eLong at discounted rates at more than 2,600 hotels in 220 cities across China.
Revenues from air ticketing during the fourth quarter totaled CNY2.9 million (US$347,000), a 105% increase year-over-year and a 15% decrease sequentially. The lower total air ticketing revenues were the result of lower air ticketing revenues from corporate customers in the fourth quarter as compared with the third quarter.
Revenues from air ticketing during fiscal 2004 totaled CNY10.1 million (US$1.2 million), an increase of 170% year-over-year. eLong sold 250,000 air tickets in fiscal 2004 compared with 73,000 in fiscal 2003.
Gross margins in the fourth quarter remained relatively unchanged from the previous quarter at 85%, and gross margins in fiscal 2004 were 87%.
Operating expenses for the fourth quarter, excluding stock-based compensation and amortization of intangibles, were CNY41.4 million (US$5.0 million), an increase of 29% from the previous quarter. This increase in operating expenses was due to a number of factors, including additional operating expenses attributable to Ray Time, which eLong acquired in November 2004, additional spending in sales and marketing and service development associated with hotel and air business, and additional administrative expenses.
Operating expenses for fiscal 2004, excluding stock-based compensation and amortization of intangibles, were CNY130.7 million (US$15.8 million), an increase of 112%, compared with CNY61.5 million (US$7.4 million) in fiscal 2003. The increase was due to our business expansion as well as somewhat lower than normal operating expenses in the second and third quarters of 2003 as operations were scaled back due to the outbreak of SARS.
During the fourth quarter we had non operating expenses of CNY913,000 (US$110,000) as compared with non operating income of CNY455,000 (US$54,000) in the third quarter of 2004. This change was primarily due to a CNY3.0 million (US$362,000) investment provision made in the fourth quarter with no comparable provision in the third quarter. The fourth quarter investment provision was partly offset by fourth quarter interest income of Rmb2.1 million (US$253,000) earned on our cash deposits resulting in a non operating expense of Rmb913,000 (US$110,000).
Adjusted loss, a non-GAAP measure that excludes amortization of stock compensation and intangibles, in the fourth quarter was CNY7.8 million (US$944,000), compared with adjusted income of CNY1.4 million (US$167,000) in the third quarter. This decrease was primarily due to higher operating expenses which exceeded the gross profit contribution from the additional revenues.
Adjusted loss for fiscal year 2004 totaled CNY11.0 million (US$1.3 million) compared with an adjusted income of CNY3.0 million (US$361,000) in fiscal 2003.
As of December 31, 2004, eLong's cash balance was US$78.0 million, including restricted cash of US$4.3 million. On January 7, 2005, eLong received CNY892.2 million (US$107.8 million) from IAC/InterActiveCorp in connection with the exercise of its warrant of which CNY446.1 million (US$53.9 million) was used by eLong to buy back shares from existing shareholders resulting in a net cash inflow of CNY446.1 million (US$53.9 million).