March 10, 2016

21Vianet Group, Inc. Reports Fourth Quarter and Full Year 2015 Unaudited Financial Results

Live Conference Call to be Held at 8:00 PM U.S. Eastern Time, March 10, 2016

2016-03-10 16:01:00.0

BEIJING, March 10, 2016 (GLOBE NEWSWIRE) -- 21Vianet Group, Inc. (Nasdaq:VNET) ("21Vianet" or the "Company"), a leading carrier-neutral internet data center services provider in China, today announced its unaudited financial results for the fourth quarter and full year 2015. The Company will hold a conference call at 8:00 p.m. Eastern Time on March 10, 2016. Dial-in details are provided at the end of the release.

Fourth Quarter 2015 Financial Highlights

  • Net revenues increased by 15.2% to RMB983.4 million (US$151.8 million) from RMB853.9 million in the comparative period in 2014.

Full Year 2015 Financial Highlights

  • Net revenues increased by 26.3% to RMB3.6 billion (US$561.1 million) from RMB2.9 billion in 2014.
  • Adjusted gross profit increased by 10.7% to RMB1.0 billion (US$158.0 million) from RMB924.2 million in 2014.

Mr. Steve Zhang, Chief Executive Officer of the Company, stated, "For the fourth quarter, I am pleased to see that we have experienced growth momentum in our internet data center (IDC), cloud, content delivery network (CDN), and VPN businesses. For our IDC business, we further increased cabinet sales during the quarter while having minor increase in our MRR, and steady utilization and churn rates during the quarter. Demand for our cloud services was strong as we continued to gain traction with Windows Azure and Office365 product offerings.  Following slower than expected third quarter results, our CDN services picked up momentum in the fourth quarter in both revenue growth and customer recognition as we further increased our market share. Our VPN business continued to see solid demand supported by the strong performance of the DYX group in the fourth quarter. Our managed network services (MNS) continues to be soft as expected, which was caused by the continued industry-wide decline in bandwidth pricing. We recognized these industry challenges, but as we restructure our business and invest in our core growth opportunities, we are confident in our ability to address these challenges and accelerate growth in the future."

Mr. Terry Wang, Chief Financial Officer of the Company, commented, "We ended the year with another quarter marked by steady top line growth, as we saw total revenues increased by 15.2% year over year to RMB983.4 million (US$151.8 million). Overall growth was highlighted by solid performance in IDC, cloud, CDN and VPN businesses, while partially offset by continued weakness in the MNS business. In the fourth quarter, our EBITDA was also negatively impacted by restructuring costs and bad debt expenses. Going forward, as we fine-tune our cost structure and further optimize operations, we remain confident we will be able to reignite margin growth both financially and operationally."

Fourth Quarter 2015 Financial Results

REVENUES: Net revenues for the fourth quarter of 2015 increased by 15.2% to RMB983.4 million (US$151.8 million) from RMB853.9 million in the comparative period in 2014, primarily driven by a year-over-year increase of billable cabinets under management and continuous growth in demand for the Company's cloud, CDN and enterprise VPN services.

Net revenues from hosting and related services increased by 26.6% to RMB754.7 million (US$116.5 million) in the fourth quarter of 2015 from RMB596.2 million in the comparative period in 2014, primarily due to the abovementioned year-over-year increase in total number of billable cabinets and the growth in demand for the Company's cloud business. Net revenues from MNS were RMB228.7 million (US$35.3 million) in the fourth quarter of 2015, as compared to RMB257.7 million in the comparative period in 2014. The decrease is primarily due to the continued industry-wide decline in bandwidth prices and the loss of certain customers.

GROSS PROFIT: Gross profit for the fourth quarter of 2015 was RMB219.2 million (US$33.8 million), as compared to RMB238.0 million in the comparative period in 2014. Gross margin for the fourth quarter of 2015 was 22.3%, compared with 27.9% in the comparative period in 2014. The decrease in gross margin was primarily due to higher spending on telecommunication services and continued softness in the Company's MNS business.

Adjusted gross profit, which excludes share-based compensation expenses and amortization of intangible assets derived from acquisitions, was RMB264.3 million (US$40.8 million), compared with RMB290.7 million in the comparative period in 2014. Adjusted gross margin was 26.9% in the fourth quarter of 2015, compared with 34.0% in the comparative period in 2014.

OPERATING EXPENSES: Total operating expenses decreased to RMB314.5 million (US$48.5 million) from RMB344.3 million in the comparative period in 2014. Adjusted operating expenses, which exclude share-based compensation expenses and the changes in the fair value of contingent purchase consideration payable, increased to RMB275.9 million (US$42.6 million) from RMB234.4 million in the comparative period in 2014. As a percentage of net revenue, adjusted operating expenses were 28.1%, compared with 27.5% in the comparative period in 2014 and 25.0% in the third quarter of 2015.

Sales and marketing expenses increased by 1.7% to RMB101.8 million (US$15.7 million) from RMB100.1 million in the comparative period in 2014, primarily due to higher service fees, which were partially offset by lower labor costs as the Company outsourced some functions to more cost-effective service providers.

General and administrative expenses increased by 4.1% to RMB166.1 million (US$25.6  million) from RMB159.6 million in the comparative period in 2014, primarily due to a one-time charge related to an accounts receivable provision of approximately RMB22 million (US$3.4 million), which was offset by decrease of share based compensation cost.

Research and development expenses increased by 4.2% to RMB41.6 million (US$6.4 million) in the fourth quarter of 2015 from RMB39.9 million in the comparative period in 2014.

Change in the fair value of contingent purchase consideration payable was a loss of RMB5.1 million (US$0.8 million) in the fourth quarter of 2015, compared with a loss of RMB44.8 million in the comparative period in 2014.

ADJUSTED EBITDA: Adjusted EBITDA for the fourth quarter of 2015 was RMB102.1 million (US$15.8 million), compared with RMB160.1 million in the comparative period in 2014. Adjusted EBITDA margin for the quarter was 10.4% compared with 18.8% in the comparative period in 2014 and 13.2% in the third quarter of 2015. Adjusted EBITDA in the fourth quarter of 2015 excludes share-based compensation expenses of RMB40.1 million (US$6.2 million) and changes in the fair value of contingent purchase consideration payable which was a loss of RMB5.1 million (US$0.8 million).

NET PROFIT/LOSS: Net loss for the fourth quarter of 2015 was RMB112.9 million (US$17.4 million), compared with a net loss of RMB155.5 million in the comparative period in 2014.

Adjusted net loss for the fourth quarter of 2015 was RMB29.1 million (US$4.5 million) compared with an adjusted net profit of RMB7.1 million in the comparative period in 2014. Adjusted net loss in the fourth quarter of 2015 excludes share-based compensation expenses of RMB40.1 million (US$6.2 million), amortization of intangible assets derived from acquisitions of RMB38.6 million (US$6.0 million), changes in the fair value of contingent purchase consideration payable which was a loss of RMB5.1 million (US$0.8 million) in the aggregate. Adjusted net margin was negative 3.0%, compared with 0.8% in the comparative period in 2014 and 1.7% in the third quarter of 2015.

EARNING/LOSS PER SHARE: Diluted loss per ordinary share for the fourth quarter of 2015 was RMB0.24, which represents the equivalent of RMB1.44 (US$0.22) per American Depositary Share ("ADS"). Each ADS represents six ordinary shares. Adjusted diluted loss per share for the fourth quarter of 2015 was RMB0.08, which represents the equivalent of RMB0.48 (US$0.07) per ADS. Adjusted loss per share is calculated using adjusted net loss as discussed above divided by the weighted average number of shares.

As of December 31, 2015, the Company had a total of 522.5 million ordinary shares outstanding, or the equivalent of 87.1 million ADSs.

BALANCE SHEET: As of December 31, 2015, the Company's cash and cash equivalents and short-term investment were RMB1.79 billion (US$276.3 million).

Fourth Quarter 2015 Operational Highlights

  • Monthly Recurring Revenues ("MRR") per cabinet was RMB10,030 in the fourth quarter of 2015, compared with RMB9,900 in the third quarter of 2015.
  • Total cabinets under management increased to 23,556 as of December 31, 2015 from 22,827 as of September 30, 2015, with 15,998 cabinets in the Company's self-built data centers and 7,558 cabinets in its partnered data centers.
  • Utilization rate was 71.7% in the fourth quarter of 2015, compared with 71.8% in the third quarter of 2015.
  • Hosting churn rate, which is based on the Company's core IDC business, was 0.14% in the fourth quarter of 2015, compared with 0.26% in the third quarter of 2015.

Full Year 2015 Financial Performance

For the full year of 2015, net revenue increased by 26.3% to RMB3.6 billion (US$561.1 million) from RMB2.9 billion in the prior year. Adjusted EBITDA for the full year was RMB540.4 million (US$83.4 million), compared with RMB558.9 million in the prior year. Adjusted EBITDA margin was 14.9%, compared with 19.4% in the prior year. Adjusted EBITDA for the full year excludes share-based compensation expense of RMB190.0 million (US$29.3 million) and changes in the fair value of contingent purchase consideration payable of RMB43.3 million (US$6.7 million). Adjusted net loss for the full year was RMB10.8 million (US$1.7 million), compared with profit of RMB79.4 million in the prior year. Adjusted net loss in the full year excludes share-based compensation expense of RMB190.0 million (US$29.3 million), amortization of intangible assets derived from acquisitions of RMB157.1 million (US$24.3 million), and changes in the fair value of contingent purchase consideration payable and related deferred tax assets of RMB43.3 million (US$6.7 million). Adjusted diluted loss per share for the full year of 2015 was RMB0.06 (US$0.01), which represents the equivalent of RMB0.36 (US$0.06) per ADS.

Recent Developments

On December 16, 2015, at the 2nd World Internet Conference - Wuzhen Summit, the Company and TUS Holdings signed a memorandum of cooperation in the establishment of Century United "One Belt One Road" digital economy development fund, which adopts the form of fund of funds with a total size of US$10 billion. The fund will be committed to boosting investment cooperation and synergetic developments in member countries of the "One Belt One Road" initiative.

On December 17, 2015, the Company signed the internet information infrastructure investment and services agreement with Dataline, Inc. the largest commercial data center operator in Russia. Under this agreement, the parties will strengthen cooperation in data center services, cloud computing, and hybrid IT services.  

Conference Call

The Company will hold a conference call on Thursday, March 10, 2016 at 8:00 pm Eastern Time, or Friday, March 11, 2016 at 9:00 am Beijing Time to discuss the financial results.

Participants may access the call by dialing the following numbers:

United States:                 +1-845-675-0438
International Toll Free: +1-855-500-8701
China Domestic: 400-1200654
Hong Kong:   +852-3018-6776
Conference ID: # 54691847
   

The replay will be accessible through March 17, 2016 by dialing the following numbers:

United States Toll Free:   +1-855-452-5696
International:                   +61-2-90034211 
Conference ID:                 # 54691847
   

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 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 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 RMB6.4778 to US$1.00, the noon buying rate in effect on December 31, 2015 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-neutral Internet data center services provider in China. 21Vianet provides hosting and related services, managed network services, cloud services, content delivery network services, last-mile wired broadband services and business VPN services, improving the reliability, security and speed of its customers' 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 enables customers' data to be delivered across the Internet in a faster and more reliable manner. 21Vianet operates in more than 30 cities throughout China, servicing a diversified and loyal base of more than 2,000 hosting 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.

21VIANET GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Amount in thousands of Renminbi ("RMB") and US dollars ("US$"))
 As ofAs of 
December 31, 2014December 31, 2015
 RMB RMB US$
 (Audited) (Unaudited) (Unaudited)
Assets   
Current assets:   
Cash and cash equivalents 644,415  1,685,054  260,128 
Restricted cash 161,649  195,230  30,138 
Accounts and notes receivable, net 739,945  694,108  107,152 
Short-term investments 911,242  104,897  16,193 
Inventories 10,059  13,539  2,090 
Prepaid expenses and other current assets 309,441  652,630  100,748 
Deferred tax assets 35,002  31,113  4,803 
Amount due from related parties 54,867  105,137  16,230 
Total current assets 2,866,620  3,481,708  537,482 
Non-current assets:   
Property and equipment, net 3,036,707  3,653,071  563,937 
Intangible assets, net 1,404,453  1,274,166  196,697 
Land use right 66,175  64,682  9,985 
Deferred tax assets 42,573  46,900  7,240 
Goodwill 1,755,970  1,755,970  271,075 
Long term investments 126,307  198,907  30,706 
Restricted cash 121,415  128,515  19,839 
Amount due from related parties 98,500  70,000  10,806 
Other non-current assets 121,461  189,991  29,330 
Total non-current assets 6,773,561  7,382,202  1,139,615 
Total assets 9,640,181  10,863,910  1,677,097 
Liabilities and Shareholders' Equity   
Current liabilities:   
Short-term bank borrowings 160,181  276,000  42,607 
Accounts and notes payable 386,074  482,622  74,504 
Accrued expenses and other payables 599,491  637,957  98,483 
Deferred revenue 347,441  342,105  52,812 
Advances from customers 97,679  185,800  28,683 
Income taxes payable 35,013  49,959  7,712 
Amounts due to related parties 326,804  397,588  61,377 
Current portion of long-term bank borrowings 955,647  38,803  5,990 
Current portion of capital lease obligations 71,939  140,488  21,688 
Current portion of deferred government grant 6,150  6,332  977 
Current portion of bonds payable -  264,250  40,793 
Deferred tax liabilities 2,696  -  - 
Total current liabilities 2,989,115  2,821,904  435,626 
Non-current liabilities:   
Long-term bank borrowings 61,673  103,421  15,965 
Deferred revenue 74,044  68,535  10,580 
Amounts due to related parties 280,728  27,384  4,227 
Unrecognized tax benefits 20,453  14,492  2,237 
Deferred tax liabilities 310,340  293,212  45,264 
Non-current portion of capital lease obligations 511,679  579,070  89,393 
Non-current portion of deferred government grant 27,422  31,288  4,830 
Bonds payable 2,264,064  2,000,000  308,747 
Mandatorily redeemable noncontrolling interests 100,000  100,000  15,437 
Total non-current liabilities 3,650,403  3,217,402  496,680 
    
Redeemable noncontrolling interests 773,706  790,229  121,990 
    
Shareholders' equity   
Treasury stock (213,665) (193,142) (29,816)
Ordinary shares 26  34  5 
Additional paid-in capital 4,225,029  6,403,117  988,471 
Accumulated other comprehensive income loss (65,754) (24,236) (3,741)
Statutory reserves 52,263  63,174  9,752 
Accumulated deficit (1,794,975) (2,233,985) (344,867)
Total 21Vianet Group, Inc. shareholders' equity 2,202,924  4,014,962  619,804 
Non-controlling interest 24,033  19,413  2,997 
Total shareholders' equity 2,226,957  4,034,375  622,801 
Total liabilities and shareholders' equity 9,640,181  10,863,910  1,677,097 
    

 

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, 2014September 30, 2015December 31, 2015 December 31, 2014December 31, 2015
 RMBRMBRMBUS$ RMB RMB US$
 (Unaudited)(Unaudited)(Unaudited)(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net revenues        
Hosting and related services 596,221  695,802  754,706  116,507   1,980,688  2,707,445  417,957 
Managed network services   257,689    228,293    228,677    35,301     895,759    926,927    143,093 
Total net revenues 853,910  924,095  983,383  151,808   2,876,447  3,634,372  561,050 
Cost of revenues   (615,877)   (723,828)   (764,214)   (117,974)    (2,066,304)   (2,780,614)   (429,253)
Gross profit 238,033  200,267  219,169  33,834   810,143  853,758  131,797 
Operating expenses        
Sales and marketing (100,075) (89,232) (101,797) (15,715)  (287,229) (359,460) (55,491)
General and administrative (159,576) (138,783) (166,064) (25,636)  (493,309) (600,940) (92,769)
Research and development (39,906) (35,176) (41,569) (6,417)  (121,676) (142,835) (22,050)
Changes in the fair value of contingent purchase consideration payable   (44,789)   (676)   (5,060)   (781)    (22,629)   (43,325)   (6,688)
Total operating expenses   (344,346)   (263,867)   (314,490)   (48,549)    (924,843)   (1,146,560)   (176,998)
Other operating income -  -  -  -   -  8,569  1,323 
Operating loss  (106,313) (63,600) (95,321) (14,715)  (114,700) (284,233) (43,878)
Interest income 12,862  13,523  5,692  879   67,904  53,494  8,258 
Interest expense (66,531) (69,690) (60,963) (9,411)  (232,020) (274,184) (42,327)
Loss on debt extinguishment -  -  -  -   (41,581) -  - 
Income (loss) from equity method investment 78  706  40,231  6,211   (671) 52,355  8,082 
Other income 15,413  5,779  20,115  3,105   26,560  30,430  4,698 
Other expense (70) (719) (1,848) (285)  (1,040) (3,701) (571)
Foreign exchange (loss) gain   (8,756)   60,248    7,248    1,119     (16,256)   72,394    11,176 
Loss before income taxes (153,317) (53,753) (84,846) (13,097)  (311,804) (353,445) (54,562)
Income tax expense   (2,168)   (4,132)   (28,044)   (4,329)    (16,673)   (47,830)   (7,384)
Consolidated net loss (155,485) (57,885) (112,890) (17,426)  (328,477) (401,275) (61,946)
Net loss attributable to non-controlling interest   (18,603)   (4,257)   (11,194)   (1,728)    (20,003)   (26,824)   (4,141)
Net loss attributable to ordinary shareholders   (174,088)   (62,142)   (124,084)   (19,154)    (348,480)   (428,099)   (66,087)
         
         
         
Loss per share        
Basic (0.44) (0.12) (0.24) (0.04)  (0.87) (0.85) (0.13)
Diluted (0.44) (0.12) (0.24) (0.04)  (0.87) (0.85) (0.13)
Shares used in earnings per share computation        
Basic* 400,031,170  521,376,112  523,366,544  523,366,544   401,335,788  492,065,239  492,065,239 
Diluted* 400,031,170  521,376,112  523,366,544  523,366,544   401,335,788  492,065,239  492,065,239 
         
Loss per ADS (6 ordinary shares equal to 1 ADS)       
Basic (2.64) (0.72) (1.44) (0.22)  (5.22) (5.10) (0.79)
Diluted (2.64) (0.72) (1.44) (0.22)  (5.22) (5.10) (0.79)
     
* Shares used earnings 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$") except for number of shares and per share data) 
          
 Three months ended  Year ended 
 December 31, 2014September 30, 2015December 31, 2015 December 31, 2014December 31, 2015 
 RMBRMBRMBUS$ RMBRMBUS$ 
Gross profit   238,033    200,267    219,169    33,834     810,143    853,758    131,797  
Plus: share-based compensation expense   3,722    1,323    6,582    1,016     7,163    12,422    1,918  
Plus: amortization of intangible assets derived from acquisitions   48,953    38,933    38,583    5,956     106,922    157,119    24,255  
Adjusted gross profit   290,708    240,523    264,334    40,806     924,228    1,023,299    157,970  
Adjusted gross margin 34.0% 26.0% 26.9% 26.9%  32.1% 28.2% 28.2% 
Operating expenses   (344,346)   (263,867)   (314,490)   (48,549)    (924,843)   (1,146,560)   (176,998) 
Plus: share-based compensation expense   65,144    32,328    33,537    5,177     226,572    177,605    27,417  
Plus: changes in the fair value of contingent purchase consideration payable   44,789    676    5,060    781     22,629    43,325    6,688  
Adjusted operating expenses   (234,413)   (230,863)   (275,893)   (42,591)    (675,642)   (925,630)   (142,893) 
Net loss   (155,485)   (57,885)   (112,890)   (17,426)    (328,477)   (401,275)   (61,946) 
Plus: share-based compensation expense   68,866    33,651    40,119    6,193     233,735    190,027    29,335  
Plus: amortization of intangible assets derived from acquisitions   48,953    38,933    38,583    5,956     106,922    157,119    24,255  
Plus: changes in the fair value of contingent purchase consideration payable and related deferred tax impact   44,789    676    5,060    781     25,613    43,325    6,688  
Plus: loss on debt extinguishment   -    -    -    -     41,581    -    -  
Adjusted net profit (loss)   7,123    15,375    (29,128)   (4,496)    79,374    (10,804)   (1,668) 
Adjusted net margin 0.8% 1.7% -3.0% -3.0%  2.8% -0.3% -0.3% 
Net loss   (155,485)   (57,885)   (112,890)   (17,426)    (328,477)   (401,275)   (61,946) 
Minus: Provision for income taxes   (2,168)   (4,132)   (28,044)   (4,329)    (16,673)   (47,830)   (7,384) 
Minus: Interest income   12,862    13,523    5,692    879     67,904    53,494    8,258  
Minus: Interest expenses   (66,531)   (69,690)   (60,963)   (9,411)    (232,020)   (274,184)   (42,327) 
Minus: loss on debt extinguishment   -    -    -    -     (41,581)   -    -  
Minus: Exchange (loss) gain   (8,756)   60,248    7,248    1,119     (16,256)   72,394    11,176  
Minus: Income (loss) from equity method investment   78    706    40,231    6,211     (671)   52,355    8,082  
Minus: Other income   15,413    5,779    20,115    3,105     26,560    30,430    4,698  
Minus: Other expenses   (70)   (719)   (1,848)   (285)    (1,040)   (3,701)   (571) 
Plus: depreciation   93,240    104,340    105,355    16,264     278,986    402,035    62,064  
Plus: amortization   59,536    46,947    46,917    7,243     138,288    189,257    29,216  
Plus: share-based compensation expense   68,866    33,651    40,119    6,193     233,735    190,027    29,335  
Plus: changes in the fair value of contingent purchase consideration payable   44,789    676    5,060    781     22,629    43,325    6,688  
Adjusted EBITDA   160,118    122,014    102,130    15,766     558,938    540,411    83,425  
Adjusted EBITDA margin 18.8% 13.2% 10.4% 10.4%  19.4% 14.9% 14.9% 
          
          
          
Adjusted net profit (loss)   7,123    15,375  (29,128) (4,496)    79,374    (10,804)   (1,668) 
Less: Net loss attributable to non-controlling interest   (18,603)   (4,257)   (11,194)   (1,728)    (20,003)   (26,824)   (4,141) 
Adjusted net (loss) profit attributable to the Company's ordinary shareholders   (11,480)   11,118  (40,322) (6,224)    59,371    (37,628)   (5,809) 
          
Adjusted (loss) earnings per share         
Basic (0.03) 0.02  (0.08) (0.01)    0.15  (0.06) (0.01) 
Diluted (0.03) 0.02  (0.08) (0.01)    0.14  (0.06) (0.01) 
Shares used in adjusted earnings per share computation:         
Basic*   400,031,170    521,376,112    523,366,544    523,366,544     401,335,788    492,065,239    492,065,239  
Diluted*   400,031,170    536,927,693    523,366,544    523,366,544     416,528,735    492,065,239    492,065,239  
          
(Loss) earnings per ADS (6 ordinary shares equal to 1 ADS)         
Basic (0.18) 0.12  (0.48) (0.07)    0.90  (0.36) (0.06) 
Diluted (0.18) 0.12  (0.48) (0.07)    0.84  (0.36) (0.06) 
          
* Shares used in adjusted earnings/ADS per share computation were computed under weighted average method.      
          

 

21VIANET GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Amount in thousands of Renminbi ("RMB") and US dollars ("US$"))
      
  Three months ended 
  September 30, 2015  December 31, 2015 
  RMB  RMB  US$ 
  (Unaudited)  (Unaudited)  (Unaudited) 
CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss (57,885) (112,890) (17,426)
Adjustments to reconcile net loss to net cash generated from operating activities:    
Foreign exchange gain (60,248) (7,248) (1,119)
Changes in the fair value of contingent purchase consideration payable 676  5,060  781 
Depreciation of property and equipment 104,340  105,355  16,264 
Amortization of intangible assets 46,016  46,336  7,153 
Loss (gain) on disposal of property and equipment 167  (222) (34)
Provision for doubtful accounts and other receivables 6,971  21,672  3,346 
Share-based compensation expense 21,339  52,430  8,094 
Deferred income taxes (benefit) expense (10,158) 9,521  1,470 
Gain from equity method investment (706) (40,231) (6,211)
 Changes in operating assets and liabilities    
Restricted cash (9,933) (42,558) (6,570)
Inventories 3,297  (4,733) (731)
Accounts and notes receivable (43,713) 67,850  10,474 
Unrecognized tax expense 602  1,993  308 
Prepaid expenses and other current assets (40,330) 2,371  366 
Amounts due from related parties (1,452) (15,475) (2,389)
Accounts and notes payable 36,276  35,394  5,464 
Accrued expenses and other payables 42,118  28,842  4,452 
Deferred revenue 5,800  7,449  1,150 
Advances from customers 43,978  8,562  1,322 
Income taxes payable 12,746  (6,861) (1,059)
Amounts due to related parties 3,777  (324) (50)
Deferred government grants   (1,553)   (1,389)   (215)
 Net cash generated from operating activities    102,125    160,904    24,840 
 CASH FLOWS FROM INVESTING ACTIVITIES    
Purchases of property and equipment (220,645) (297,136) (45,870)
Purchases of intangible assets (16,353) (2,567) (396)
Proceeds from disposal of property and equipment 401  6,401  988 
Advances of loan to third parties (5,104) (62,578) (9,660)
Payments for short-term investments (88,145) (34,634) (5,347)
Proceeds received from maturity of short-term investments   1,090,577    412,249    63,640 
 Net cash generated from investing activities    760,731    21,735    3,355 
 CASH FLOWS FROM FINANCING ACTIVITIES    
Restricted cash (31,176) (10,957) (1,691)
Proceeds from exercise of stock options 1,309  1,545  238 
Proceeds from long-term bank borrowings -  11,290  1,743 
Proceeds from short-term bank borrowings 40,000  81,000  12,504 
Repayments of short-term bank borrowings (20,000) (75,000) (11,578)
Repayments of long-term bank borrowings (902,496) 8,575  1,324 
Payments for acquisitions (4,543) (14,767) (2,280)
Interest payment for 2016 Bond (10,386) 10,386  1,603 
Payments for capital leases (21,182) (24,001) (3,705)
Rental prepayments and deposits for sales and leaseback transactions -  (13,000) (2,007)
Proceeds from sales and leaseback transactions   -    130,000    20,069 
 Net cash (used in) generated from financing activities    (948,474)   105,071    16,220 
 Effect of foreign exchange rate changes on cash and short term investments  43,448  (2,121) (327)
 Net (decrease) increase in cash and cash equivalents  (42,170) 285,589  44,088 
 Cash and cash equivalents at beginning of period    1,441,635    1,399,465    216,040 
 Cash and cash equivalents at end of period    1,399,465    1,685,054    260,128 
        

 

Investor Relations Contacts:

21Vianet Group, Inc.
Eric Chu, CFA
+1 908 707 2062
IR@21Vianet.com

Queenie Liu
+86 10 8456 2121
IR@21Vianet.com

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


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