PRESS RELEASES

< Go back
21Vianet Group, Inc. Reports Unaudited Fourth Quarter and Full Year 2019 Financial Results
Mar 04,2020

BEIJING, March 04, 2020 (GLOBE NEWSWIRE) -- 21Vianet Group, Inc. (Nasdaq: VNET) ("21Vianet" or the "Company"), a leading carrier- and cloud-neutral Internet data center services provider in China, today announced its unaudited financial results for the fourth quarter ended December 31, 2019. The Company will hold a conference call at 8:00 P.M. on Wednesday, March 4, 2020, U.S. Eastern Time to discuss the financial results. Dial-in details are provided at the end of this release.

Fourth Quarter 2019 Financial Highlights

  • Net revenues increased by 16.2% to RMB1.05 billion (US$150.6 million) from RMB901.9 million in the same period of 2018.
     
  • Adjusted cash gross profit increased by 4.1% to RMB425.9 million (US$61.2 million) from RMB409.2 million in the same period of 2018. Adjusted cash gross margin was 40.6%, compared to 45.4% in the same period of 2018.
     
  • Adjusted EBITDA (non-GAAP) increased by 3.3% to RMB263.8 million (US$37.9 million) from RMB255.3 million in the same period of 2018. Adjusted EBITDA margin was 25.2%, compared to 28.3% in the same period of 2018.
     
  • Net cash generated from operating activities was RMB444.8 million (US$63.9 million), compared to RMB237.0 million in the same period of 2018.

Full Year 2019 Financial Highlights

  • Net revenues increased by 11.4% to RMB3.79 billion (US$544.3 million) from RMB3.40 billion in the full year of 2018.
     
  • Adjusted cash gross profit increased by 8.0% to RMB1.63 billion (US$234.6 million) from RMB1.51 billion in the full year of 2018. Adjusted cash gross margin was 43.1%, compared to 44.5% in the full year of 2018.
     
  • Adjusted EBITDA increased by 14.5% to RMB1.05 billion (US$150.9 million) from RMB917.7 million in the full year of 2018. Adjusted EBITDA margin expanded to 27.7% from 27.0% in the full year of 2018.
     
  • Net cash generated from operating activities was RMB707.4 million (US$101.6 million), compared to RMB705.0 million in the full year of 2018.

Fourth Quarter 2019 Operational Highlights

  • Hosting MRR1 per cabinet increased to RMB8,822 in the fourth quarter of 2019, compared to RMB8,457 in the same period of 2018 and RMB8,711 in the third quarter of 2019.
     
  • Total cabinets under management increased to 36,291 as of December 31, 2019, compared to 32,116 as of September 30, 2019, and 30,654 as of December 31, 2018. As of December 31, 2019, the Company had 32,047 cabinets in its self-built data centers and 4,244 cabinets in its partnered data centers.
     
  • Utilization rate in the fourth quarter of 2019 fell slightly to 65.6% from 66.2% in the third quarter of 2019, mainly due to the delivery of a large number of additional cabinets in the fourth quarter of 2019. 

Mr. Alvin Wang, Chief Executive Officer and President of the Company, stated, “2019 was a productive year for 21Vianet as we met both our capacity expansion and financial targets. Notably, during the quarter, we signed a memorandum of understanding with an industry-leading wholesale customer, marking a significant milestone for the company and illustrating the attractiveness of our IDC services for large-scale clients. Moreover, during the quarter, we continued to see strong demand from our retail customers for both scalable space and turn-key hybrid IT solutions. As such, we remain optimistic about future opportunities in China’s IDC industry and confident in our ability to seize them, owing to our established competitive advantages in the field. Going forward, we will remain focused on securing additional pipeline resources in key markets, upgrading our technology on a continual basis, and ensuring the reliability of our operations to provide customers with premium IDC services.”

Ms. Sharon Liu, Chief Financial Officer of the Company, commented, “With both our revenues and adjusted EBITDA meeting our previous guidance expectations, we delivered a solid quarterly financial performance to conclude 2019. In particular, we are pleased to have obtained additional capital as part of our three-year growth plan to fund those initiatives which will enable us to reach our development goals going forward. Looking into 2020, we will maintain our focus on expanding our cabinet capacity, ramping up our financial growth, and optimizing our operational efficiency. In addition, we will also continue to implement a prudent financial policy while closely monitoring the development of the COVID-19 epidemic.”

Fourth Quarter 2019 Financial Results

REVENUES: Net revenues in the fourth quarter of 2019 increased by 16.2% to RMB1.05 billion (US$150.6 million) from RMB901.9 million in the fourth quarter of 2018, representing an increase of 6.8% from RMB981.0 million in the third quarter of 2019. The year-over-year increase was primarily attributable to the growing demand for data centers in the domestic market, driven by the ongoing expansion of corporate digitization across China.

GROSS PROFIT: Gross profit in the fourth quarter of 2019 was RMB247.9 million (US$35.6 million), compared to RMB246.3 million in the same period of 2018 and RMB222.6 million in the third quarter of 2019. Gross margin in the fourth quarter of 2019 was 23.6%, compared to 27.3% in the same period of 2018 and 22.7% in the third quarter of 2019. The year-over-year decrease in gross margin was mainly due to the delivery of additional pipeline capacity.

ADJUSTED CASH GROSS PROFIT, which excludes depreciation, amortization, and share-based compensation expenses, increased by 4.1% to RMB425.9 million (US$61.2 million) in the fourth quarter of 2019 from RMB409.2 million in the fourth quarter of 2018, representing an increase of 7.3% from RMB396.7 million in the third quarter of 2019. Adjusted cash gross margin in the fourth quarter of 2019 was 40.6%, compared to 45.4% in the same period of 2018 and 40.4% in the third quarter of 2019.

OPERATING EXPENSES: Total operating expenses in the fourth quarter of 2019 was RMB244.4 million (US$35.1 million), compared to RMB181.4 million in the fourth quarter of 2018 and RMB157.1 million in the third quarter of 2019. As a percentage of net revenues, total operating expenses increased to 23.3% in the fourth quarter of 2019 from 20.1% in the fourth quarter of 2018 and 16.0% in the third quarter of 2019.

Sales and marketing expenses in the fourth quarter of 2019 increased by 28.4% to RMB63.2 million (US$9.1 million) from RMB49.2 million in the fourth quarter of 2018, representing an increase of 20.6% from RMB52.4 million in the third quarter of 2019. The increase of sales and marketing expenses was mainly attributable to the Company’s business expansion efforts and the related increase in sales commissions to staff.

Research and development expenses in the fourth quarter of 2019 were RMB24.9 million (US$3.6 million), compared to RMB23.6 million in the same period of 2018 and RMB22.5 million in the third quarter of 2019. 

General and administrative expenses in the fourth quarter of 2019 were RMB110.0 million (US$15.8 million), compared to RMB131.0 million in the same period of 2018 and RMB82.2 million in the third quarter of 2019. The year-over-year decrease was mainly attributable to the Company’s continuous efforts in maximizing its operating efficiency.

ADJUSTED OPERATING EXPENSES, which exclude share-based compensation expenses, changes in the fair value of contingent purchase consideration payables, and impairment of receivables from equity investees, increased by 6.8% to RMB184.2 million (US$26.5 million) in the fourth quarter of 2019 from RMB172.4 million in the fourth quarter of 2018, representing an increase of 26.0% from RMB146.2 million in the third quarter of 2019. As a percentage of net revenues, adjusted operating expenses reduced to 17.6% in the fourth quarter of 2019 from 19.1% in the fourth quarter of 2018 and increased from 14.9% in the third quarter of 2019.

ADJUSTED EBITDA: Adjusted EBITDA in the fourth quarter of 2019 increased by 3.3% to RMB263.8 million (US$37.9 million) from RMB255.3 million in the same period of 2018, representing a decrease of 3.2% from RMB272.5 million in the third quarter of 2019. Adjusted EBITDA in the fourth quarter of 2019 excluded share-based compensation expenses of RMB8.6 million (US$1.2 million). Adjusted EBITDA margin was 25.2% in the fourth quarter of 2019, compared to 28.3% in the same period of 2018 and 27.8% in the third quarter of 2019.

NET PROFIT/LOSS: Net loss attributable to ordinary shareholders in the fourth quarter of 2019 was RMB16.4 million (US$2.4 million), compared to a net loss of RMB114.1 million in the fourth quarter of 2018 and a net loss of RMB69.5 million in the third quarter of 2019. Net loss attributable to ordinary shareholders in the fourth quarter of 2019 included a foreign exchange gain of RMB22.5 million (US$3.2 million), compared to RMB2.5 million in the same period of 2018 and a foreign exchange loss of RMB40.2 million in the third quarter of 2019, and an interest expense of RMB88.4 million (US$12.7 million), compared to RMB72.4 million in the same period of 2018 and RMB96.9 million in the third quarter of 2019.

PROFIT/LOSS PER SHARE: Basic and diluted loss per share were RMB0.02 (US$0.3 cent) in the fourth quarter of 2019, which represents the equivalent of RMB0.12 (US$1.8 cent) per American Depositary Share ("ADS"). Each ADS represents six ordinary shares. Diluted loss per share is calculated using net loss attributable to ordinary shareholders divided by the weighted average number of diluted shares outstanding.

As of December 31, 2019, the Company's cash and cash equivalents, restricted cash, and short-term investments were RMB2.72 billion (US$390.9 million).

Net cash generated from operating activities in the fourth quarter of 2019 was RMB444.8 million (US$63.9 million), compared to RMB237.0 million in the same period of 2018 and RMB103.0 million in the third quarter of 2019.

Full Year 2019 Financial Results

REVENUES: Net revenues in the full year of 2019 increased by 11.4% to RMB3.79 billion (US$544.3 million) from RMB3.40 billion in the full year of 2018. The increase was primarily due to the same factors that led to the quarterly increase.

GROSS PROFIT: Gross profit in the full year of 2019 was RMB939.4 million (US$134.9 million), compared to RMB944.9 million in the full year of 2018. Gross margin was 24.8% in the full year of 2019, compared to 27.8% in the full year of 2018.

ADJUSTED CASH GROSS PROFIT, which excludes depreciation, amortization, and share-based compensation expenses, increased by 8.0% to RMB1.63 billion (US$234.6 million) in the full year of 2019 from RMB1.51 billion in the full year of 2018. Adjusted cash gross margin in the full year of 2019 was 43.1%, compared to 44.5% in the full year of 2018.

OPERATING EXPENSES: Total operating expenses in the full year of 2019 increased by 7.0% to RMB757.2 million (US$108.8 million) from RMB707.4 million in the full year of 2018. As a percentage of net revenues, total operating expenses decreased to 20.0% in the full year of 2019 from 20.8% in the full year of 2018. The decrease of operating expenses as a percentage of net revenues was primarily due to the successful implementation of the Company’s efficiency enhancement initiatives.

Sales and marketing expenses in the full year of 2019 were RMB206.3 million (US$29.6 million), compared to RMB172.2 million in the full year of 2018.

Research and development expenses in the full year of 2019 were RMB88.8 million (US$12.8 million), compared to RMB92.1 million in the full year of 2018.

General and administrative expenses in the full year of 2019 were RMB415.3 million (US$59.7 million), compared to RMB462.6 million in the full year of 2018.

ADJUSTED OPERATING EXPENSES, which exclude share-based compensation expenses, changes in the fair value of contingent purchase consideration payables, and impairment of receivables from equity investees, decreased by 0.2% to RMB663.0 million (US$95.2 million) in the full year of 2019 from RMB664.4 million in the full year of 2018. As a percentage of net revenues, adjusted operating expenses decreased to 17.5% in the full year of 2019 from 19.5% in the full year of 2018.

ADJUSTED EBITDA: Adjusted EBITDA in the full year of 2019 increased by 14.5% to RMB1.05 billion (US$150.9 million) from RMB917.7 million in the full year of 2018. Adjusted EBITDA in the full year of 2019 excluded share-based compensation expenses of RMB43.9 million (US$6.3 million). Adjusted EBITDA margin expanded to 27.7% in the full year of 2019 from 27.0% in the full year of 2018.

NET PROFIT/LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS: Net loss attributable to ordinary shareholders for 2019 was RMB182.3 million (US$26.2 million), compared to a net loss of RMB205.1 million in the full year of 2018. Net loss in the full year of 2019 included a foreign exchange loss of RMB28.0 million (US$4.0 million), compared to RMB81.1 million in the full year of 2018.

PROFIT/LOSS PER SHARE: Basic and diluted loss per share were RMB0.27 (US$0.04) for the full year of 2019, which represents the equivalent of RMB1.62 (US$0.24) per ADS. Diluted loss per share is calculated using net loss attributable to ordinary shareholders divided by the weighted average number of diluted shares outstanding.

Net cash generated from operating activities was RMB707.4 million (US$101.6 million) in the full year of 2019 compared to RMB705.0 million in the full year of 2018.

Recent Development

In February 2020, the Company announced that it had entered into convertible note purchase agreements with a group of investors led by Goldman Sachs Asia Strategic Pte. Ltd. for a total of US$200 million in convertible notes. These agreements are subject to the satisfaction of customary closing conditions. All convertible notes will mature in five years from the date of issuance.  

Financial Outlook

For the first quarter of 2020, the Company expects net revenues to be in the range of RMB1,070 million to RMB1,090 million. Adjusted EBITDA is expected to be in the range of RMB245 million to RMB265 million.

For the full year of 2020, the Company expects net revenues to be in the range of RMB4,600 million to RMB4,800 million. Adjusted EBITDA is expected to be in the range of RMB1,250 million to RMB1,350 million. The midpoints of the Company’s updated estimates imply an increase of 24% year over year both in net revenues and adjusted EBITDA.

The forecast reflects the Company’s current and preliminary view on the market and its operational conditions, which do not factor in any of the potential future impacts caused by the COVID-19 epidemic and are subject to change.

Conference Call

The Company will hold a conference call at 8:00 P.M. on Wednesday, March 4, 2020, U.S. Eastern Time, or 9:00 A.M. on Thursday, March 5, 2020, Beijing Time, to discuss the financial results.

Participants may access the call by dialing the following numbers:

United States Toll Free: +1-866-519-4004
International: +65-6713-5090
China Domestic: 400-620-8038
Hong Kong: +852-3018-6771
Conference ID: 2267403

The replay will be accessible through March 12, 2020, by dialing the following numbers:

United States Toll Free: +1-855-452-5696
International: +61-2-8199-0299
Conference ID: 2267403

A live and archived webcast of the conference call will be available through the Company's investor relation website at http://ir.21vianet.com.

Non-GAAP Disclosure

In evaluating its business, 21Vianet considers and uses the following non-GAAP measures defined as non-GAAP financial measures by the SEC as a supplemental measure to review and assess its operating performance: adjusted cash gross profit, adjusted cash gross margin, adjusted operating expenses, adjusted EBITDA, adjusted EBITDA margin, 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 U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of this press release.

The non-GAAP financial measures are provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the Company's current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S. GAAP results. In addition, the Company's calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.9618 to US$1.00, the noon buying rate in effect on December 31, 2019, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

Statement Regarding Unaudited Condensed Financial Information

The unaudited financial information set forth above is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company's year-end audit, which could result in significant differences from this preliminary unaudited condensed financial information.

About 21Vianet

21Vianet Group, Inc. is a leading carrier- and cloud-neutral Internet data center services provider in China. 21Vianet provides hosting and related services, including IDC services, cloud services, and business VPN services to improve the reliability, security and speed of its customers' Internet infrastructure. Customers may locate their servers and equipment in 21Vianet's data centers and connect to China's Internet backbone. 21Vianet operates in more than 30 cities throughout China, servicing a diversified and loyal base of nearly 5,000 hosting and related enterprise customers that span numerous industries ranging from Internet companies to government entities and blue-chip enterprises to small- to mid-sized enterprises.

Safe Harbor Statement

This announcement contains forward-looking statements. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, quotations from management in this announcement as well as 21Vianet's strategic and operational plans contain forward-looking statements. 21Vianet may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports 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 21Vianet's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: 21Vianet's goals and strategies; 21Vianet's expansion plans; the expected growth of the data center services market; expectations regarding demand for, and market acceptance of, 21Vianet's services; 21Vianet's expectations regarding keeping and strengthening its relationships with customers; 21Vianet's plans to invest in research and development to enhance its solution and service offerings; and general economic and business conditions in the regions where 21Vianet provides solutions and services. Further information regarding these and other risks is included in 21Vianet's reports filed with, or furnished to, the Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and 21Vianet undertakes no duty to update such information, except as required under applicable law.

Investor Relations Contacts:

21Vianet Group, Inc.
Rene Jiang
+86 10 8456 2121
IR@21Vianet.com

Julia Jiang
+86 10 8456 2121
IR@21Vianet.com

ICR, Inc.
Xinran Rao
+1 (646) 405-4922
IR@21Vianet.com

__________________________

1Hosting MRR: Refers to Monthly Recurring Revenues for the hosting business.

 
 
21VIANET GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))
  As of As of
December 31, 2018 December 31, 2019
  RMB RMB US$
  (Audited) (Unaudited) (Unaudited)
Assets        
Current assets:      
Cash and cash equivalents 2,358,556   1,808,483   259,772  
Restricted cash 265,214   478,873   68,786  
Accounts and notes receivable, net 524,305   657,158   94,395  
Short-term investments 245,014   363,856   52,265  
Prepaid expenses and other current assets 1,159,574   1,618,149   232,433  
Amounts due from related parties 125,446   301,665   43,331  
Total current assets 4,678,109   5,228,184   750,982  
       
       
Non-current assets:      
Property and equipment, net 4,031,242   5,443,565   781,919  
Intangible assets, net 355,313   410,595   58,978  
Land use rights, net 147,493   233,154   33,490  
Operating lease right-of-use assets, net -   1,221,616   175,474  
Goodwill 989,530   989,530   142,137  
Long-term investments 544,323   169,653   24,369  
Amounts due from related parties 34,424   20,654   2,967  
Restricted cash 37,251   69,821   10,029  
Deferred tax assets 159,441   209,366   30,074  
Other non-current assets 173,591   277,568   39,870  
Total non-current assets 6,472,608   9,045,522   1,299,307  
Total assets 11,150,717   14,273,706   2,050,289  
             
             
       
Liabilities and Shareholders' Equity      
Current liabilities:      
Short-term bank borrowings 50,000   234,500   33,684  
Accounts and notes payable 389,508   296,261   42,555  
Accrued expenses and other payables 659,320   975,935   140,183  
Deferred revenue 57,754   57,625   8,277  
Advances from customers 670,037   1,068,692   153,508  
Income taxes payable 13,111   48,032   6,899  
Amounts due to related parties 52,328   163,247   23,449  
Current portion of long-term bank borrowings 75,284   32,500   4,668  
Current portion of capital lease obligations 219,695   227,115   32,623  
Current portion of deferred government grant 4,173   2,595   373  
Bonds payable-current -   911,147   130,878  
Operating lease liabilities - current -   451,372   64,835  
Total current liabilities 2,191,210   4,469,021   641,932  
             
             
       
Non-current liabilities:      
Long-term borrowings 112,000   79,500   11,419  
Amounts due to related parties 504,478   526,952   75,692  
Unrecognized tax benefits 6,677   2,443   351  
Deferred tax liabilities 157,720   202,572   29,098  
Non-current portion of capital lease obligations 765,993   896,927   128,836  
Non-current portion of deferred government grant 11,619   5,906   848  
Bonds payable 2,037,836   2,060,708   296,002  
Operating lease liabilities - non current -   798,049   114,633  
Total non-current liabilities 3,596,323   4,573,057   656,879  
             
       
Shareholders' equity      
Treasury stock (337,683 ) (349,523 ) (50,206 )
Ordinary shares 46   46   7  
Additional paid-in capital 9,141,494   9,202,567   1,321,866  
Accumulated other comprehensive gain 85,979   77,904   11,190  
Statutory reserves 42,403   60,469   8,687  
Accumulated deficit (3,838,032 ) (4,038,390 ) (580,078 )
Total 21Vianet Group, Inc. shareholders’ equity 5,094,207   4,953,073   711,466  
Noncontrolling interest 268,977   278,555   40,012  
Total shareholders' equity 5,363,184   5,231,628   751,478  
Total liabilities and shareholders' equity 11,150,717   14,273,706   2,050,289  
             
       

 

 
21VIANET GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for number of shares and per share data)
               
  Three months ended Twelve months ended
  December 31, 2018 September 30, 2019 December 31, 2019 December 31, 2018 December 31, 2019
  RMB RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited)
Net revenues 901,887   980,969   1,048,119   150,553   3,401,037   3,788,967   544,251  
Cost of revenues (655,546 ) (758,414 ) (800,248 ) (114,948 ) (2,456,166 ) (2,849,518 ) (409,308 )
Gross profit 246,341   222,555   247,871   35,605   944,871   939,449   134,943  
               
Operating expenses              
Other operating income 5,027   -   6,862   986   5,027   6,862   986  
Sales and marketing (49,210 ) (52,399 ) (63,188 ) (9,076 ) (172,176 ) (206,309 ) (29,634 )
Research and development (23,583 ) (22,518 ) (24,920 ) (3,580 ) (92,109 ) (88,792 ) (12,754 )
General and administrative (130,963 ) (82,156 ) (109,984 ) (15,798 ) (462,637 ) (415,277 ) (59,651 )
(Allowance) reversal for doubtful debt (1,241 ) (6 ) (1,072 ) (154 ) 598   (1,557 ) (224 )
Impairment of receivables from equity investees -   -   (52,142 ) (7,490 ) -   (52,142 ) (7,490 )
Changes in the fair value of contingent purchase consideration payables 18,528   -   -   -   13,905   -   -  
Total operating expenses (181,442 ) (157,079 ) (244,444 ) (35,112 ) (707,392 ) (757,215 ) (108,767 )
                             
               
Operating profit 64,899   65,476   3,427   493   237,479   182,234   26,176  
Interest income 14,214   15,379   14,988   2,153   45,186   54,607   7,844  
Interest expense (72,430 ) (96,936 ) (88,375 ) (12,694 ) (236,066 ) (345,955 ) (49,693 )
Gain on deconsolidation of subsidiaries -   -   -   -   4,843   -   -  
Other income 7,050   2,187   22,160   3,183   58,033   36,380   5,226  
Other expense (1,875 ) (127 ) (1,270 ) (182 ) (4,103 ) (5,632 ) (809 )
Foreign exchange gain (loss) 2,488   (40,192 ) 22,512   3,234   (81,055 ) (27,995 ) (4,021 )
Loss on debt extinguishment -   (969 ) (122 ) (18 ) -   (18,895 ) (2,714 )
Gain (loss) before income taxes and loss from equity method investments 14,346   (55,182 ) (26,680 ) (3,831 ) 24,317   (125,256 ) (17,991 )
Income tax benefits (expenses) 46,350   (10,039 ) 24,686   3,546   (24,411 ) (5,437 ) (781 )
Loss from equity method investments (158,738 ) (1,078 ) (20,260 ) (2,910 ) (186,642 ) (50,553 ) (7,261 )
Net loss (98,042 ) (66,299 ) (22,254 ) (3,195 ) (186,736 ) (181,246 ) (26,033 )
Net (profit) loss attributable to noncontrolling interest (16,020 ) (3,157 ) 5,838   839   (18,329 ) (1,046 ) (150 )
Net loss attributable to ordinary shareholders (114,062 ) (69,456 ) (16,416 ) (2,356 ) (205,065 ) (182,292 ) (26,183 )
                             
               
Loss per share              
Basic (0.17 ) (0.10 ) (0.02 ) (0.00 ) (0.30 ) (0.27 ) (0.04 )
Diluted (0.17 ) (0.10 ) (0.02 ) (0.00 ) (0.30 ) (0.27 ) (0.04 )
Shares used in loss per share computation              
Basic* 676,361,072   679,135,837   670,523,195   670,523,195   674,732,130   668,833,756   668,833,756  
Diluted* 676,361,072   679,135,837   670,523,195   670,523,195   674,732,130   668,833,756   668,833,756  
               
Loss per ADS (6 ordinary shares equal to 1 ADS)              
Basic (1.02 ) (0.60 ) (0.12 ) (0.02 ) (1.80 ) (1.62 ) (0.24 )
Diluted (1.02 ) (0.60 ) (0.12 ) (0.02 ) (1.80 ) (1.62 ) (0.24 )
               
* Shares used in (loss) profit per share/ADS computation were computed under weighted average method.        
               

 

 
21VIANET GROUP, INC.
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))
                         
  Three months ended Twelve months ended
  December 31, 2018 September 30, 2019 December 31, 2019 December 31, 2018 December 31, 2019
  RMB   RMB   RMB   US$   RMB   RMB   US$  
Gross profit 246,341   222,555   247,871   35,605   944,871   939,449   134,943  
Plus: depreciation and amortization 161,201   173,712   177,529   25,500   565,101   691,764   99,366  
Plus: share-based compensation expenses 1,672   464   487   70   2,668   1,884   271  
Adjusted cash gross profit 409,214   396,731   425,887   61,175   1,512,640   1,633,097   234,580  
Adjusted cash gross margin 45.4%   40.4%   40.6%   40.6%   44.5%   43.1%   43.1%  
                             
Operating expenses (181,442 ) (157,079 ) (244,444 ) (35,112 ) (707,392 ) (757,215 ) (108,767 )
Plus: share-based compensation expenses 27,528   10,833   8,102   1,164   56,870   42,032   6,038  
Plus: changes in the fair value of contingent purchase consideration payables (18,528)   -   -   -   (13,905)   -   -  
Plus: impairment of receivables from equity investees -   -   52,142   7,490   -   52,142   7,490  
Adjusted operating expenses (172,442 ) (146,246 ) (184,200 ) (26,458 ) (664,427 ) (663,041 ) (95,239 )
                             
Operating profit 64,899   65,476   3,427   493   237,479   182,234   26,176  
Plus: depreciation and amortization 179,759   195,729   199,642   28,677   634,606   772,205   110,920  
Plus: share-based compensation expenses 29,200   11,297   8,589   1,234   59,538   43,916   6,309  
Plus: changes in the fair value of contingent purchase consideration payables (18,528 ) -   -   -   (13,905 ) -   -  
Plus: impairment of receivables from equity investees -   -   52,142   7,490   -   52,142   7,490  
Adjusted EBITDA 255,330   272,502   263,800   37,894   917,718   1,050,497   150,895  
Adjusted EBITDA margin 28.3%   27.8%   25.2%   25.2%   27.0%   27.7%   27.7%  
                             

 

 
21VIANET GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))
                   
  Three months ended
  December 31, 2018   September 30, 2019   December 31, 2019     
  RMB   RMB   RMB   US$    
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)    
CASH FLOWS FROM OPERATING ACTIVITIES                  
Net loss (98,042 ) (66,299 ) (22,254 ) (3,195 )  
Adjustments to reconcile net loss to net cash generated from operating activities:                  
Depreciation and amortization 179,759   195,729   199,642   28,677    
Stock-based compensation expenses 29,200   11,297   8,589   1,234    
Others 95,122   33,913   11,992   1,723    
Changes in operating assets and liabilities                  
Accounts and notes receivable 44,566   (133,929 ) 126,542   18,177    
Prepaid expenses and other current assets (117,604 ) (84,332 ) 2,499   359    
Accounts and notes payable (31,734 ) (60,121 ) (36,190 ) (5,198 )  
Accrued expenses and other payables 96,432   105,076   (23,517 ) (3,378 )  
Deferred revenue 5,135   16,138   (3,391 ) (487 )  
Advances from customers 79,968   103,772   72,628   10,432    
Others (45,802 ) (18,259 ) 108,285   15,554    
Net cash generated from operating activities 237,000   102,985   444,825   63,898    
                   
CASH FLOWS FROM INVESTING ACTIVITIES                  
Purchases of property and equipment (129,910 ) (448,614 ) (458,230 ) (65,821 )  
Purchases of intangible assets (8,199 ) (8,278 ) (6,919 ) (994 )  
Payments for investments (101,796 ) (320,660 ) (136,840 ) (19,656 )  
Proceeds from other investing activities 97,917   162,811   51,283   7,366    
Net cash used in investing activities (141,988 ) (614,741 ) (550,706 ) (79,105 )  
                   
CASH FLOWS FROM FINANCING ACTIVITIES                  
Proceeds from short-term bank borrowings -   200,000   4,500   646    
Repayment of long-term bank borrowings (42,690 ) (44,331 ) (13,000 ) (1,867 )  
Repayment of short-term bank borrowings (19,999 ) -   -   -    
Payments for capital lease (104,420 ) (83,274 ) (91,487 ) (13,141 )  
Repurchase of 2020 Notes -   (126,553 ) -   -    
Payment of Issuance cost of 2021 Notes -   (183 ) -   -    
(Payments for) proceeds from other financing activities (17,324 ) 88   21,892   3,142    
Net cash used in financing activities (184,433 ) (54,253 ) (78,095 ) (11,220 )  
                   
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 14,507   68,718   (46,956 ) (6,745 )  
Net decrease in cash, cash equivalents and restricted cash (74,914 ) (497,291 ) (230,932 ) (33,172 )  
Cash, cash equivalents and restricted cash at beginning of period 2,735,935   3,085,400   2,588,109   371,759    
Cash, cash equivalents and restricted cash at end of period 2,661,021   2,588,109   2,357,177   338,587    
                   

 

Source: 21Vianet Group, Inc.