February 27, 2012

21Vianet Group, Inc. Reports Fourth Quarter and Full Year 2011 Financial Results

2012-02-27 16:01:00.0

4Q11 Net Revenues Up 61.3% YOY to RMB318.3 Million

4Q11 Adjusted EBITDA Up 73.0% YOY to RMB65.1 Million

4Q11 Adjusted Net Profit Up 52.5% YOY to RMB46.3 Million

 Live Conference Call to be Held at 8:00 AM U.S. Eastern Time, February 28, 2012

BEIJING, Feb. 27, 2012 (GLOBE NEWSWIRE) -- 21Vianet Group, Inc. (Nasdaq:VNET) ("21Vianet" or the "Company"), the largest carrier-neutral Internet data center services provider in China, today announced its unaudited financial results for the fourth quarter of 2011. The Company will hold a conference call at 8:00 a.m. Eastern Time on February 28, 2012. Dial-in details are provided at the end of the release.

Fourth Quarter 2011 Financial Highlights

  • Net revenues increased by 61.3% to RMB318.3 million (US$50.6 million) from RMB197.3 million in the comparative period in 2010.
  • Adjusted EBITDA1 increased by 73.0% to RMB65.1 million (US$10.3 million) from RMB37.6 million in the comparative period in 2010.
  • Adjusted EBITDA margin2 increased to 20.5% from 19.1% in the comparative period in 2010.
  • Adjusted net profit3 increased by 52.5% to RMB46.3 million (US$7.4 million) from RMB30.4 million in the comparative period in 2010.

Full Year 2011 Financial Highlights

  • Net revenues increased by 94.4% to RMB1.0 billion (US$162.2 million) from RMB525.2 million in 2010.
  • Adjusted EBITDA increased by 149.9% to RMB209.0 million (US$33.2 million) from RMB83.7 million in 2010.
  • Adjusted EBITDA margin increased to 20.5% from 15.9% in 2010.
  • Adjusted net profit increased by 185.9% to RMB170.0 million (US$27.0 million) from RMB59.5 million in 2010.

Mr. Josh Chen, Founder, Chairman and Chief Executive Officer of the Company, stated, "We are excited to announce that for the full year 2011, and for the first time in our company's history, our annual net revenues exceeded the RMB1 billion milestone. Our success in the fourth quarter and full year of 2011 was led by solid financial and operational results across the board. This growth was driven by surging demand for both hosting and managed network services. With our diverse base of over 1,500 customers, demand for our services continued to grow, which was characterized by an increase in demand from customers conducting online video, online gaming and e-Commerce businesses.

"We remain committed to further expanding our services and capacity as well as streamlining our business operations. During the quarter, we enhanced our revenue growth capabilities by further increasing our hosting capacity as well as network service capacity with the acquisition of Guangzhou Gehua Network Technology and Development Co., Ltd. ("Gehua").  Going forward, through leveraging our core Internet infrastructure platform, we are confident to remain a leading Internet infrastructure services provider throughout China."

Mr. Shang Hsiao, President and Chief Financial Officer of the Company, commented, "Not only did our revenue growth exceed our expectations, but we were also able to expand our adjusted EBITDA margins by 4.6% year over year. Going into 2012, we are well-positioned to benefit from the significant growth in Internet usage on multiple devices in China as well as from increasing demand for reliable interconnectivity services from our core content customers."

Fourth Quarter 2011 Financial Results

REVENUES: Net revenues for the fourth quarter of 2011 increased by 61.3% to RMB318.3 million (US$50.6 million) from RMB197.3 million in the comparative period in 2010. Net revenue increased by 21.6% sequentially from the third quarter of 2011.

Net revenues from hosting and related services increased by 57.2% to RMB175.2 million (US$27.8 million) in the fourth quarter of 2011 from RMB111.5 million in the comparative period in 2010, primarily due to an increase in the total number of cabinets under management in both our self-built and partnered data centers, which was attributable to growing customer demand.

Net revenues from managed network services increased by 66.6% to RMB143.0 million (US$22.7 million) in the fourth quarter of 2011 from RMB85.8 million in the comparative period in 2010, primarily driven by an increase in network capacity demand for data transmission services. Net revenues from managed network services included the effects of acquiring Gehua, which generated RMB21.5 million (US$3.4 million) in net revenues during the fourth quarter of 2011.

GROSS PROFIT: For the fourth quarter of 2011, gross profit increased by 82.6% to RMB88.1 million (US$14.0 million) from RMB48.2 million in the comparative period in 2010. Gross margin for the fourth quarter of 2011 increased to 27.7% from 24.4% in the comparative period in 2010.

Adjusted gross profit, which excludes share-based compensation expenses of RMB0.6 million (US$0.1 million) and amortization of intangible assets derived from acquisitions of RMB7.3 million, increased by 70.9% to RMB96.0 million (US$15.3 million) from RMB56.2 million in the comparative period in 2010. 

Adjusted gross margin increased to 30.2%, compared to 28.5% in the comparative period in 2010. The increase in adjusted gross margin was primarily due to the continued revenue mix shift towards a higher percentage of self-built data centers, which carry slightly higher gross margins relative to partnered data centers.

OPERATING EXPENSES: Total operating expenses were RMB79.9 (US$12.7 million) compared with RMB246.8 million in the comparative period in 2010.

Sales and marketing expenses increased to RMB25.5 million (US$4.0 million) from RMB16.4 million in the comparative period in 2010. Adjusted sales and marketing expenses, which excludes share-based compensation expenses of RMB1.5 million (US$0.2 million) in the fourth quarter of 2011 and RMB1.4 million in the comparative period in 2010, increased to RMB24.0 million (US$3.8 million) from RMB15.0 million in the comparative period in 2010 primarily due to the expansion of the Company's sales and service support team.

General and administrative expenses decreased to RMB24.4 million (US$3.9 million) from RMB217.0 million in the comparative period in 2010. Adjusted general and administrative expenses, which exclude share-based compensation expenses of RMB7.7 million (US$1.2 million) in the fourth quarter of 2011 and RMB211.5 million in the comparative period in 2010, increased to RMB16.7 million (US$2.7 million) from RMB5.5 million primarily due to headcount increases, office rental and other expansion related expenses.

Research and development expenses increased to RMB10.0 million (US$1.6 million) from RMB5.8 million in the comparative period in 2010. Adjusted research and development expenses, which exclude share-based compensation expenses of RMB0.7 million (US$0.1 million) in the fourth quarter of 2011 and RMB0.6 million in the comparative period in 2010, increased to RMB9.3 million (US$1.5 million) from RMB5.2 million, which reflected the Company's efforts to further strengthen its research and development capabilities and expand and improve its service offerings.

Change in the fair value of contingent purchase consideration payable was RMB20.0 million (US$3.2 million) during the fourth quarter of 2011. This expense was primarily due to an increase in the present value of estimated cash and share considerations as of December 31, 2011 associated with the Company's acquisitions of the Managed Network Entities and Gehua.

Adjusted operating expenses, which excludes share-based compensation expenses and the changes in the fair value of contingent purchase consideration payable, increased to RMB50.0 million (US$7.9 million) from RMB25.8 million in the comparative period in 2010. As a percentage of net revenue, adjusted operating expenses was 15.7%, compared with 13.1% in the comparative period in 2010. 

ADJUSTED EBITDA: Adjusted EBITDA for the fourth quarter of 2011 increased by 73.0% to RMB65.1 million (US$10.3 million) from RMB37.6 million in the comparative period in 2010. Adjusted EBITDA margin for the quarter increased to 20.5% from 19.1% in the comparative period in 2010. Adjusted EBITDA in the fourth quarter of 2011 excludes share-based compensation expenses of RMB10.5 million (US$1.7 million) and changes in the fair value of contingent purchase consideration payable of RMB20.0 million (US$3.2 million).

NET PROFIT/LOSS: Net profit for the fourth quarter of 2011 was RMB11.5 million (US$1.8 million) compared to a net loss of RMB198.8 million in the comparative period in 2010.

Adjusted net profit for the fourth quarter of 2011 increased by 52.5% to RMB46.3 million (US$7.4 million) from RMB30.4 million in the comparative period in 2010. Adjusted net profit in the fourth quarter of 2011 excludes the share-based compensation expenses of RMB10.5 million, amortization of intangible assets derived from acquisitions of RMB7.3 million, changes in the fair value of contingent purchase consideration payable and related deferred tax impact of RMB17.0 million in the aggregate. Adjusted net margin was 14.6%, compared with 15.4% in the comparative period in 2010.

EARNING/LOSS PER SHARE: Diluted earnings per ordinary share for the fourth quarter of 2011 were RMB0.01, which represents the equivalent of RMB0.06 (US$0.01) per American Depositary Share ("ADS"). Each ADS represents six ordinary shares. Adjusted diluted earnings per share for the fourth quarter of 2011 were RMB0.12, which represents the equivalent of RMB0.72 (US$0.12) per ADS4. Adjusted earnings per share are calculated using adjusted net profit as discussed above to divide the weighted average shares number. 

As of December 31, 2011, the Company had a total of 335.6 million basic ordinary shares outstanding or the equivalents of 55.9 million ADSs outstanding.

Adjusted earnings per share is calculated using adjusted net profit, which excludes share-based compensation expenses, amortization of intangible assets derived from acquisitions, change in the fair value of contingent purchase consideration payable and related deferred tax impact, reversal of unrecognized tax benefit and outside tax basis difference as discussed above to divide the weighted average shares number. 

BALANCE SHEET: As of December 31, 2011, the Company's cash and cash equivalents and short term investment were RMB1.3 billion (US$207.3 million), compared to RMB83.3 million as of December 31, 2010. 

Fourth Quarter 2011 Operational Highlights

  • Monthly Recurring Revenues ("MRR") per cabinet increased to RMB9,700 from RMB9,400 in the third quarter of 2011.
  • Total cabinets under management increased to 7,816 as of December 31, 2011 from 7,335 as of September 30, 2011, with 4,055 cabinets in the Company's self-built data centers and 3,761 cabinets in its partnered data centers.
  • Utilization rate was stable at 80.7% in the fourth quarter 2011 compared to 81.5% in the third quarter of 2011.
  • Churn rate was 0.85% in the fourth quarter of 2011, compared to 0.80% in the third quarter of 2011. Top 20 customers' churn rate remained at 0%.
  • The largest customer represented 4.1% of total net revenues.

Full Year 2011 Financial Performance

For the full year of 2011, net revenue increased by 94.4% to RMB1.0 billion (US$162.2 million) from RMB525.2 million in 2010. Adjusted EBITDA for the full year increased by 149.9% to RMB209.0 million (US$33.2 million) from RMB83.7 million in 2010. Adjusted EBITDA margin increased to 20.5% from 15.9% in 2010. Adjusted EBITDA for the full year excludes share-based compensation expenses of RMB42.0 million (US$6.7 million) and changes in the fair value of contingent purchase consideration payable of RMB63.2 million (US$10.0 million). Adjusted net profit for the full year increased by 185.9% to RMB170.0 million (US$27.0 million) from RMB59.5 million in 2010. Adjusted net profit for the full year excludes share-based compensation expenses of RMB42.0 million (US$6.7 million), amortization of intangible assets derived from acquisitions of RMB28.4 million (US$4.5 million), and changes in the fair value of contingent purchase consideration payable and related deferred tax impact of RMB53.7 million (US$8.5 million).

Financial Outlook

For the first quarter of 2012, the Company expects net revenues to be in the range of RMB340 million to RMB345 million. Adjusted EBITDA is expected to be in the range of RMB68.5 million to RMB70.5 million. These forecasts reflect the Company's current and preliminary view, which is subject to change.

Conference Call

The Company will hold a conference call on Tuesday, February 28, 2012 at 8:00 a.m. Eastern Time to discuss the financial results. Listeners may access the call by dialing the following numbers:

United States:  +1-646-254-3515
International Toll Free:          +1-855-500-8701
China Domestic:  400-1200654
Hong Kong:  +852-3051-2745
Conference ID:  # 48256412

The replay will be accessible through March 6, 2012 by dialing the following numbers:     

United States:  +1-718-354-1232
International Toll Free:         +1-866-214-5335
Conference ID:  # 48256412

A webcast of the conference call will be available through the Company's investor relations 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 supplemental measure to review and assess its operating performance: adjusted gross profit, adjusted gross margin, adjusted operating expenses, adjusted net profit, adjusted net margin, adjusted EBITDA, adjusted EBITDA margin, adjusted basic earnings per share, adjusted diluted earnings per share, adjusted basic earnings per ADS and adjusted diluted earnings per ADS. 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 press release contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars, in this press release, were made at a rate of RMB6.2939 to US$1.00, the noon buying rate in effect on December 30, 2011 in the City of New York for cable transfers in Renminbi per US dollar as certified for customs purposes by the Federal Reserve Bank of New York.

About 21Vianet

21Vianet Group, Inc. is the largest carrier-neutral Internet data center services provider in China. 21Vianet provides hosting and related services, managed network services and cloud computing infrastructure services, improving the reliability, security and speed of its customers' Internet connections through 21Vianet's Internet infrastructure. Customers may locate their servers and networking equipment in 21Vianet's data centers and connect to China's Internet backbone through 21Vianet's extensive fiber optic network. In addition, 21Vianet's proprietary smart routing technology, BroadEx, enables customers' data to be delivered across the Internet in a faster and more reliable manner. 21Vianet operates in 33 cities throughout China, servicing a diversified and loyal base of more than 1,500 customers that span many 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, the outlook for the first quarter of 2012 and 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. 21Vianet does not undertake any obligation to update any forward-looking statement, except as required under applicable law. 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.

1 Adjusted EBITDA is non-GAAP financial measure, which is defined as EBITDA excluding share-based compensation expenses and changes in the fair value of contingent purchase consideration payable.

2 Adjusted EBITDA margin is non-GAAP financial measure, which is defined as adjusted EBITDA as a percentage of total net revenues.

3 Adjusted net profit/loss is non-GAAP financial measure, which is defined as net profit/loss from continuing operations excluding share-based compensation expenses, amortization of intangible assets derived from acquisitions, changes in the fair value of contingent purchase consideration payable and related deferred tax impact, and reversal of unrecognized tax benefits and outside tax basis difference.

4 Due to the Company's IPO on April 21, 2011, the diluted shares used in adjusted earnings per share computation represented the weighted average number of the Company's ordinary shares.

21VIANET GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Amount in thousands of Renminbi ("RMB") and US dollars ("US$"))
       
       
  As of
December 31, 2010
 As of
December 31, 2011
  RMB RMB US$
  (Audited) (Unaudited) (Unaudited)
Assets      
Current assets:      
Cash and cash equivalents  83,256  410,389  65,204
Restricted cash  4,441  4,578  727
Accounts receivable, net  76,373  147,624  23,455
Short term investment  --   894,540  142,128
Prepaid expenses and other current assets  14,369  48,924  7,773
Deferred tax assets  2,055  4,872  774
Amount due from related parties  13,463  50,114  7,962
Total current assets  193,957  1,561,041  248,023
Non-current assets:      
Property and equipment, net  197,015  453,883  72,115
Intangible assets, net  157,086  159,439  25,332
Deferred tax assets  7,358  12,773  2,029
Goodwill  170,171  217,436  34,547
Investment  --   8,200  1,303
Total non-current assets  531,630  851,731  135,326
Total assets  725,587  2,412,772  383,349
Liabilities and Shareholders' (Deficit) Equity      
Current liabilities:      
Short term bank borrowings  35,000  100,000  15,888
Accounts payable  49,792  105,080  16,696
Notes payable  4,441  4,578  727
Accrued expenses and other payables  30,962  111,197  17,666
Advances from customers  17,316  23,238  3,692
Income tax payable  3,545  5,634  895
Amounts due to related parties  53,679  96,618  15,351
Current portion of capital lease obligations  15,824  26,012  4,133
Total current liabilities  210,559  472,357  75,048
Non-current liabilities:      
Amounts due to related parties  126,331  124,493  19,780
Non-current portion of capital lease obligations  58,190  73,896  11,741
Unrecognized tax benefits  5,575  26,801  4,258
Deferred tax liabilities  37,949  39,682  6,305
Deferred government grant  5,400  5,819  925
Total non-current liabilities  233,445  270,691  43,009
Commitments and contingencies      
Mezzanine equity  991,110  --   -- 
Shareholders' (deficit) equity      
Treasury stock  --   (168,018)  (26,695)
Ordinary shares   7  23  4
Additional paid-in capital  512,225  3,277,658  520,767
Accumulated other comprehensive income (loss)  1,474  (54,779)  (8,704)
Statutory reserves  14,143  15,837  2,516
Accumulated deficit  (1,357,747)  (1,418,167)  (225,324)
Total 21Vianet Group, Inc. shareholders' (deficit) equity  (829,898)  1,652,554  262,564
Non-controlling interest  120,371  17,170  2,728
Total shareholders' (deficit) equity  (709,527)  1,669,724  265,292
Total liabilities, mezzanine equity and shareholders' (deficit) equity  725,587  2,412,772  383,349
 
 
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  Year ended
  December 31, 2010 September 30, 2011 December 31, 2011 December 31, 2010 December 31, 2011
  RMB RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net revenues              
Hosting and related services  111,475  164,814  175,247  27,844  374,946  614,612  97,652
Managed network services  85,837  96,831  143,030  22,725  150,257  406,317  64,557
Total net revenues  197,312  261,645  318,277  50,569  525,203  1,020,929  162,209
Cost of revenues  (149,094)  (190,071)  (230,222)  (36,579)  (396,858)  (744,371)  (118,269)
Gross profit  48,218  71,574  88,055  13,990  128,345  276,558  43,940
Operating expenses        --     --   -- 
Sales and marketing  (16,441)  (20,894)  (25,458)  (4,045)  (51,392)  (80,885)  (12,851)
General and administrative  (217,023)  (24,643)  (24,418)  (3,880)  (282,298)  (82,926)  (13,176)
Research and development  (5,833)  (9,396)  (10,020)  (1,592)  (19,924)  (34,657)  (5,506)
Changes in the fair value of contingent purchase consideration payable  (7,537)  54,895  (19,979)  (3,174)  (7,537)  (63,185)  (10,039)
Total operating expenses  (246,834)  (38)  (79,875)  (12,691)  (361,151)  (261,653)  (41,572)
Operating profit (loss)  (198,616)  71,536  8,180  1,299  (232,806)  14,905  2,368
Interest income  322  7,051  4,348  691  580  14,939  2,374
Interest expense  (777)  (1,241)  (705)  (112)  (2,793)  (4,398)  (699)
Other income  639  395  602  96  1,152  1,943  309
Other expense  (367)  (65)  (244)  (39)  (906)  (520)  (83)
Foreign exchange gain  (634)  24,195  6,734  1,070  1,646  32,747  5,203
Profit (loss) from continuing operations before income taxes  (199,433)  101,871  18,915  3,005  (233,127)  59,616  9,472
               
Income tax (expense) benefit  587  (14,186)  (7,372)  (1,171)  (1,588)  (13,677)  (2,173)
Net profit (loss) from continuing operations  (198,846)  87,685  11,543  1,834  (234,715)  45,939  7,299
Loss from discontinued operations  --  --  --  --  (12,952)  --  --
Net profit (loss) from continuing operations  (198,846)  87,685  11,543  1,834  (247,667)  45,939  7,299
Net income attributable to non-controlling interest  (6,291)  (6,141)  (8,586)  (1,364)  (7,722)  (27,495)  (4,369)
Net profit (loss) attributable to the Company's ordinary shareholders  (205,137)  81,544  2,957  470  (255,389)  18,444  2,930
               
               
Earnings (loss) per share              
Basic  (2.87)  0.24  0.01  0.001  (3.57)  0.07  0.01
Diluted  (2.87)  0.23  0.01  0.001  (3.57)  0.06  0.01
Shares used in earnings (loss) per share computation              
Basic*  71,526,320  338,719,421  322,761,801  322,761,801  71,526,320  259,595,677  259,595,677
Diluted*  71,526,320  354,085,623  332,991,032  332,991,032  71,526,320  316,807,661  316,807,661
               
Earnings (loss) per ADS (6 ordinary shares equal to 1 ADS)              
EPS - Basic (17.22) 1.44 0.06 0.01 (21.42) 0.42 0.06
EPS - Diluted (17.22) 1.38 0.06 0.01 (21.42) 0.36 0.06
               
               
* Shares used in earnings/ADS per share 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$") except for number of shares and per share data)  
                 
  Three months ended  Year ended  
  December 31, 2010 September 30, 2011 December 31, 2011 December 31, 2010 December 31, 2011  
  RMB RMB RMB US$ RMB RMB US$  
Gross profit  48,218  71,574  88,055  13,991  128,345  276,558  43,940  
Plus: share-based compensation expense  487  356  578  92  4,645  2,157  343  
Plus: amortization of intangible assets derived from acquisitions  7,461  6,741  7,344  1,167  9,000  28,388  4,510  
Adjusted gross profit  56,166  78,671  95,977  15,250  141,990  307,103  48,793  
Adjusted gross margin 28.47% 30.07% 30.16% 30.16% 27.04% 30.08% 30.08%  
Operating expenses  (246,834)  (38)  (79,875)  (12,691)  (361,151)  (261,653)  (41,572)  
Plus: share-based compensation expense  213,545  13,525  9,875  1,569  273,236  39,802  6,324  
Plus: changes in the fair value of contingent purchase consideration payable  7,537  (54,895)  19,979  3,174  7,537  63,185  10,039  
                 
Adjusted operating expenses  (25,752)  (41,408)  (50,021)  (7,948)  (80,378)  (158,666)  (25,209)  
Net profit (loss) from continuing operations  (198,846)  87,685  11,543  1,834  (234,715)  45,939  7,299  
Plus: share-based compensation expense  214,032  13,881  10,453  1,661  277,881  41,959  6,667  
Plus: amortization of intangible assets derived from acquisitions  7,461  6,741  7,344  1,167  9,000  28,388  4,510  
Plus: changes in the fair value of contingent purchase consideration payable and related deferred tax impact  7,537  (46,661)  16,982  2,698  7,537  53,707  8,533  
Plus: reversal of unrecognized tax benefits and outside tax basis difference  182  --   --   --   (249)  --   --   
Adjusted net profit from continuing operations  30,366  61,646  46,322  7,360  59,454  169,993  27,009  
Adjusted net margin 15.4% 23.6% 14.6% 14.6% 11.3% 16.7% 16.7%  
Operating profit (loss)  (198,616)  71,536  8,180  1,300  (232,806)  14,905  2,368  
Plus: depreciation  6,763  16,022  18,772  2,983  19,673  58,873  9,354  
Plus: amortization  7,929  7,198  7,732  1,228  11,372  30,104  4,783  
Plus: share-based compensation expense  214,032  13,881  10,453  1,661  277,881  41,959  6,667  
Plus: changes in the fair value of contingent purchase consideration payable  7,537  (54,895)  19,979  3,174  7,537  63,185  10,039  
                 
Adjusted EBITDA  37,645  53,742  65,116  10,346  83,657  209,026  33,211  
Adjusted EBITDA margin 19.1% 20.5% 20.5% 20.5% 15.9% 20.5% 20.5%  
                 
                 
Adjusted net profit from continuing operations  30,366  61,646  46,322  7,360  59,454  169,993  27,009  
Less: Net income attributable to non-controlling interest  (6,291)  (6,141)  (8,586)  (1,364)  (7,722)  (27,495)  (4,369)  
Adjusted net profit attributable to the Company's ordinary shareholders  24,075  55,505  37,736  5,996  51,732  142,498  22,640  
                 
Adjusted earnings per share                
Basic  0.34  0.16  0.12  0.02  0.72  0.55  0.09  
Diluted  0.34  0.16  0.12  0.02  0.72  0.47  0.07  
Shares used in adjusted earnings per share computation:                
Basic*  71,526,320  338,719,421  322,761,801  322,761,801  71,526,320  259,558,631  259,558,631  
Diluted*  71,526,320  338,719,421  322,761,801  322,761,801  71,526,320  302,796,593  302,796,593  
                 
Earnings per ADS (6 ordinary shares equal to 1 ADS)                
EPS - Basic  2.04  0.96  0.72  0.12  4.32  3.30  0.54  
EPS - Diluted  2.04  0.96  0.72  0.12  4.32  2.82  0.42  
         
* Shares used in adjusted earnings/ADS per share computation were computed under weighted average method.
CONTACT: Investor Relations Contact:

         ICR, Inc.

         Jeremy Peruski

         +1 (646) 405-4922

         IR@21Vianet.com
Source: 21Vianet

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