UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2012
Commission File Number: 001-35126
21Vianet Group, Inc.
M5, 1 Jiuxianqiao East Road,
Chaoyang District
Beijing 100016
The People’s Republic of China
(86 10) 8456 2121
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| 21Vianet Group, Inc. | ||||
| By | : | /s/ Shang-Wen Hsiao | ||
| Name | : | Shang-Wen Hsiao | ||
| Title | : | President and Chief Financial Officer | ||
Date: November 16, 2012
Exhibit Index
Exhibit 99.1 — Press Release
Exhibit 99.1
21Vianet Group, Inc. Reports Third Quarter 2012 Financial Results
3Q12 Net Revenues Up 51.4% YOY to RMB396.1 Million
3Q12 Adjusted EBITDA Up 41.4% YOY to RMB76.0 Million
Live Conference Call to be Held at 8:00 AM U.S. Eastern Time, November 16, 2012
Beijing, November 15, 2012—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 third quarter of 2012. The Company will hold a conference call at 8:00 a.m. Eastern Time on November 16, 2012. Dial-in details are provided at the end of the release.
Third Quarter 2012 Financial Highlights
| • | Net revenues increased by 51.4% to RMB396.1 million (US$63.0 million) from RMB261.6 million in the comparative period in 2011. |
| • | Adjusted EBITDA1 increased by 41.4% to RMB76.0 million (US$12.1 million) from RMB53.7 million in the comparative period in 2011. |
| • | Adjusted EBITDA margin2 was 19.2%, compared with 19.3% in the previous quarter and 20.5% in the comparative period in 2011. |
Mr. Josh Chen, Founder, Chairman and Chief Executive Officer of the Company, stated, “We continued to deliver solid results in the third quarter by further expansion and diversification of our Internet and cloud infrastructure capabilities. As we remain focused on expanding our data center footprint, we also believe that we are well positioned to capitalize on new emerging opportunities in China. As an example, our recent acquisition of Fastweb International Holdings (“Fastweb”), as well as our recent partnership with Microsoft to offer cloud services in China, together, offer us promising new revenue streams. We believe that these initiatives, combined with the increasing Internet data usage in China, will significantly strengthen 21Vianet’s future growth potential over the coming years.”
Mr. Shang-Wen Hsiao, President and Chief Financial Officer of the Company, commented, “We are pleased with the steady expansion of our self-built data centers and our partnership with Microsoft, which will not only help us meet the growing customer demands for our services, but will also improve our ability to drive meaningful margin improvement. As we continue to leverage our core data center business by integrating Fastweb and building-up our cloud platform, we believe these new initiatives will further solidify our foundation and growth potential going forward.”
Third Quarter 2012 Financial Results
REVENUES: Net revenues for the third quarter of 2012 increased by 51.4% to RMB396.1 million (US$63.0 million) from RMB261.6 million in the comparative period in 2011.
Net revenues from hosting and related services increased by 32.8% to RMB218.9 million (US$34.8 million) in the third quarter of 2012 from RMB164.8 million in the comparative period in 2011, primarily due to an increase in the total number of cabinets under management in both the Company’s self-built and partnered data centers, which was attributable to growing customer demand. Net revenues from managed network services increased by 83.0% to RMB177.2 million (US$28.2 million) in the third quarter of 2012 from RMB96.8 million in the comparative period in 2011, primarily driven by an increase in network capacity demand for data transmission services.
| 1 | Adjusted EBITDA is a 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 a non-GAAP financial measure, which is defined as adjusted EBITDA as a percentage of total net revenues. |
GROSS PROFIT: For the third quarter of 2012, gross profit increased by 54.2% to RMB110.4 million (US$17.6 million) from RMB71.6 million in the comparative period in 2011. Gross margin for the third quarter of 2012 increased to 27.9% from 27.4% in the comparative period in 2011.
Adjusted gross profit, which excludes share-based compensation expenses and amortization of intangible assets derived from acquisitions, increased by 50.9% to RMB118.7 million (US$18.9 million) from RMB78.7 million in the comparative period in 2011. Adjusted gross margin remained stable at 30.0%, compared with 30.1% in the comparative period in 2011.
OPERATING EXPENSES: Total operating expenses were RMB102.3 million (US$16.3 million), compared to RMB38,000 in the comparative period in 2011. The increase in operating expenses primarily reflected a RMB12.0 million (US$1.9 million) non-cash expense in the change in the fair value of contingent purchase consideration payable recorded this quarter, as compared with a RMB54.9 million gain in the third quarter of 2011.
Sales and marketing expenses increased to RMB28.9 million (US$4.6 million) from RMB20.9 million in the comparative period in 2011, primarily due to the expansion of the Company’s sales and service support team.
General and administrative expenses increased to RMB42.6 million (US$6.8 million) from RMB24.6 million in the comparative period in 2011, primarily due to an increase in headcount, office rentals and other expansion related expenses.
Research and development expenses increased to RMB18.8 million (US$3.0 million) from RMB 9.4 million in the comparative period in 2011, which reflected the Company’s efforts to further strengthen its research and development capabilities and expand its cloud computing service offerings.
Change in the fair value of contingent purchase consideration payable was RMB12.0 million (US$1.9 million) during the third quarter of 2012, compared with a gain in the change in fair value of contingent purchase consideration payable of RMB54.9 million in the prior year period. This non-cash expense was primarily due to an increase in the market value of the Company’s shares, which resulted in an increase in the fair value of share-based contingent purchase considerations payable as of September 30, 2012 associated with the Company’s acquisitions of the Managed Network Entities, Gehua and Fastweb.
Adjusted operating expenses, which exclude share-based compensation expenses and the changes in the fair value of contingent purchase consideration payable, increased to RMB68.8 million (US$10.9 million) from RMB41.4 million in the comparative period in 2011. As a percentage of net revenue, adjusted operating expenses were 17.4%, compared to 15.8% in the comparative period in 2011.
ADJUSTED EBITDA: Adjusted EBITDA for the third quarter of 2012 increased by 41.4% to RMB76.0 million (US$12.1 million) from RMB53.7 million in the comparative period in 2011. Adjusted EBITDA margin for the quarter was 19.2%, compared with 19.3% in the previous quarter and 20.5% in the comparative period in 2011. Adjusted EBITDA in the third quarter of 2012 excludes share-based compensation expenses of RMB23.0 million (US$3.7 million) and changes in the fair value of contingent purchase consideration payable of RMB12.0 million (US$1.9 million).
NET PROFIT/LOSS: Net profit for the third quarter of 2012 was RMB12.2 million (US$1.9 million), compared to RMB87.7 million in the comparative period in 2011. The decrease in net profit was due to the aforementioned change in the fair value of contingent purchase consideration payable that the Company recorded during the quarter and an RMB1.2 million (US$193,000) foreign exchange loss in this quarter, compared with a RMB$24.2 million gain in the comparative period in 2011.
Adjusted net profit for the third quarter of 2012 was RMB52.2 million (US$8.3 million), compared with RMB61.6 million in the comparative period in 2011. Adjusted net profit in the third quarter of 2012 excludes share-based compensation expenses of RMB23.0 million (US$3.7 million), amortization of intangible assets derived from acquisitions of RMB6.8 million (US$1.1 million), and changes in the fair value of contingent purchase consideration payable and related deferred tax impact of RMB10.2 million (US$1.6 million) in the aggregate. Adjusted net margin was 13.2%, compared to 23.6% in the comparative period in 2011.
EARNING/LOSS PER SHARE: Diluted earnings per ordinary share for the third quarter of 2012 was RMB0.03, which represents the equivalent of RMB0.18 (US$0.03) per American Depositary Share (“ADS”). Each ADS represents six ordinary shares. Adjusted diluted earnings per share for the third quarter of 2012 was RMB0.15, which represents the equivalent of RMB0.90 (US$0.14) per ADS. Adjusted earnings per share is calculated using adjusted net profit as discussed above to divide the weighted average shares number.
As of September 30, 2012, the Company had a total of 346.4 million ordinary shares outstanding, or the equivalents of 57.7 million ADSs outstanding.
BALANCE SHEET: As of September 30, 2012, the Company’s cash and cash equivalents and short-term investment were RMB0.7 billion (US$113.6 million), compared to RMB1.3 billion as of December 31, 2011.
Third Quarter 2012 Operational Highlights
| • | Monthly Recurring Revenues (“MRR”) per cabinet remained stable at RMB10,027 in the third quarter of 2012, compared to RMB10,053 in the second quarter of 2012. |
| • | Total cabinets under management increased to 11,648 as of September 30, 2012, from 10,394 as of June 30, 2012, with 7,334 cabinets in the Company’s self-built data centers and 4,313 cabinets in its partnered data centers. |
| • | Utilization rate was 67.7% in the third quarter 2012, compared to 81.2% in the second quarter of 2012, reflecting the increased capacity the Company experienced with the addition of 1,254 new cabinets. |
| • | Churn rate remained stable at 0.87% in the third quarter of 2012, compared to 0.93% in the second quarter of 2012. Top 20 customers’ churn rate remained 0%. |
| • | The largest customer represented 3.8% of total net revenues. |
Nine Months Ended September 30, 2012 Financial Performance
For the nine months ended September 30, 2012, net revenue increased by 57.5% to RMB1.1 billion (US$176.0 million) from RMB702.7 million in the prior year comparative period. Adjusted EBITDA for the nine months ended September 30, 2012 increased by 50.0% to RMB215.9 million (US$34.4 million) from RMB143.9 million in the prior year comparative period. Adjusted EBITDA margin was 19.5%, compared to 20.5% in the prior year comparative period. Adjusted EBITDA for the nine months of 2012 excludes share-based compensation expense of RMB45.3 million (US$7.2 million) and changes in the fair value of contingent purchase consideration payable of RMB57.5 million (US$9.1 million). Adjusted net profit for the nine months ended September 30, 2012 increased by 3.3% to RMB127.8 million (US$20.3 million) from RMB123.7 million in the prior year comparative period. Adjusted net profit in the nine months of 2012 excludes share-based compensation expense of RMB45.3 million (US$7.2 million), amortization of intangible assets derived from acquisitions of RMB19.1 million (US$3.0 million), and changes in the fair value of contingent purchase consideration payable and related deferred tax assets of RMB48.9 million (US$7.8 million).
Recent Developments
In November, 2012, 21Vianet entered into a strategic partnership agreement with Microsoft Corporation (Nasdaq: MSFT) to expand Microsoft’s premier commercial cloud services—Office 365 and Windows Azure—into China. 21Vianet has been licensed the technology and other rights to operate and offer Office 365 and Windows Azure services in China. Microsoft and 21Vianet will co-market the services targeting small-to medium-sized enterprises, multinationals, government agencies and others, which is expected to help further broaden 21Vianet’s client base. In addition, 21Vianet will hire 200 to 300 software engineers, who will focus on developing, implementing and maintaining these cloud computing services and platform.
In October 2012, the Company enhanced the independence of its Board of Directors (the “Board”) through the appointment of Mr. Zhonghe Tai as an independent Director and Chairman of the Nominating and Corporate Governance Committee. Mr. Tai replaced Mr. David Ying Zhang, a non-Independent Director, who voluntarily tendered his resignation from his position as Director and Chairman of the Nominating and Corporate Governance Committee. In addition, Mr. Jun Zhang, Co-founder and Chief Operating Officer of 21Vianet (“COO”), was also nominated to serve as Director of the Company. Mr. Zhonghe Tai is a prominent figure in the Taiwanese technology sector with over 35 years of industry experience with leading technology and hardware companies in Taiwan and the United States.
In September 2012, the Company completed its acquisition of Fastweb, a leading Internet content delivery network (“CDN”) services provider in China, to expand its CDN and cloud technology capabilities. In connection with the acquisition, Mr. Edward Liu, the Chief Executive Officer of Fastweb, joined 21Vianet as the Chief Software Officer and part of his responsibilities will be to oversee 21Vianet’s cloud computing initiatives as well as business partnership strategies. Prior to Fastweb, Mr. Liu was the director of business development at Akamai Technologies, Inc. (“Akamai”), one of the world’s leading CDN service providers. The Company is in the process of obtaining information to value certain tangible and intangible assets of Fastweb. Therefore the consolidated financial statements as of September 30, 2012 reflects the preliminary purchase price allocation for Fastweb.
Financial Outlook
For the fourth quarter of 2012, the Company expects net revenues to be in the range of RMB 413 million to RMB 420 million. Adjusted EBITDA is expected to be in the range of RMB 77 million to RMB 83 million. As a result, for the full year of 2012, the Company expects net revenues to be approximately in the range of RMB 1.519 billion to RMB 1.526 billion and adjusted EBITDA to be in the range of RMB 292 million to RMB 298 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 Friday, November 16, 2012 at 8:00 a.m. Eastern Time, or 9:00 p.m. Beijing 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: | #45805822 |
The replay will be accessible through November 23, 2012 by dialing the following numbers:
| United States Toll Free: | +1- 855-452-5696 | |
| International: | +61-2-8199-0299 | |
| Conference ID: | # 45805822 |
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 U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.2848 to US$1.00, the noon buying rate in effect on September 28, 2012 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York.
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 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 1,900 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 fourth quarter and full year 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.
Investor Relations Contact:
ICR, Inc.
Jeremy Peruski
+1 (646) 405-4922
IR@21Vianet.com
Source: 21Vianet
21VIANET GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))
| As of December 31, 2011 |
As of September 30, 2012 |
|||||||||||
| RMB | RMB | US$ | ||||||||||
| (Audited) | (Unaudited) | (Unaudited) | ||||||||||
| Assets |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
410,389 | 446,701 | 71,076 | |||||||||
| Restricted cash |
4,578 | 192,941 | 30,700 | |||||||||
| Accounts receivable, net |
147,624 | 295,247 | 46,978 | |||||||||
| Short term investments |
894,540 | 267,434 | 42,553 | |||||||||
| Prepaid expenses and other current assets |
47,575 | 67,462 | 10,734 | |||||||||
| Deferred tax assets |
4,872 | 9,795 | 1,559 | |||||||||
| Amount due from related parties |
41,643 | 16,080 | 2,559 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total current assets |
1,551,221 | 1,295,660 | 206,159 | |||||||||
| Non-current assets: |
||||||||||||
| Property and equipment, net |
453,883 | 790,714 | 125,814 | |||||||||
| Intangible assets, net |
159,439 | 284,796 | 45,315 | |||||||||
| Deferred tax assets |
12,773 | 21,929 | 3,489 | |||||||||
| Goodwill |
217,436 | 296,688 | 47,207 | |||||||||
| Investment |
8,200 | 58,729 | 9,345 | |||||||||
| Restricted cash |
— | 219,732 | 34,962 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total non-current assets |
851,731 | 1,672,588 | 266,132 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
2,402,952 | 2,968,248 | 472,291 | |||||||||
|
|
|
|
|
|
|
|||||||
| Liabilities and Shareholders’ (Deficit) Equity |
||||||||||||
| Current liabilities: |
||||||||||||
| Short term bank borrowings |
100,000 | 247,686 | 39,410 | |||||||||
| Accounts payable |
82,131 | 141,806 | 22,563 | |||||||||
| Notes payable |
4,578 | — | — | |||||||||
| Accrued expenses and other payables |
124,326 | 185,451 | 29,507 | |||||||||
| Advances from customers |
23,238 | 34,054 | 5,418 | |||||||||
| Income tax payable |
5,634 | 29,663 | 4,720 | |||||||||
| Amounts due to related parties |
96,618 | 212,590 | 33,826 | |||||||||
| Current portion of capital lease obligations |
26,012 | 27,698 | 4,407 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total current liabilities |
462,537 | 878,948 | 139,851 | |||||||||
| Non-current liabilities: |
||||||||||||
| Long term bank borrowings |
— | 66,000 | 10,502 | |||||||||
| Amounts due to related parties |
124,493 | 143,741 | 22,871 | |||||||||
| Non-current portion of capital lease obligations |
73,896 | 65,605 | 10,439 | |||||||||
| Unrecognized tax benefits |
26,801 | 12,447 | 1,980 | |||||||||
| Deferred tax liabilities |
39,682 | 43,796 | 6,969 | |||||||||
| Deferred government grant |
5,819 | 19,717 | 3,137 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total non-current liabilities |
270,691 | 351,306 | 55,898 | |||||||||
| Commitments and contingencies |
||||||||||||
| Mezzanine equity |
— | — | — | |||||||||
| Shareholders’ equity |
||||||||||||
| Treasury stock |
(168,018 | ) | (26,675 | ) | (4,244 | ) | ||||||
| Ordinary shares |
23 | 23 | 4 | |||||||||
| Additional paid-in capital |
3,277,658 | 3,182,868 | 506,439 | |||||||||
| Accumulated other comprehensive income loss |
(54,779 | ) | (47,584 | ) | (7,571 | ) | ||||||
| Statutory reserves |
15,837 | 15,837 | 2,520 | |||||||||
| Accumulated deficit |
(1,418,167 | ) | (1,404,580 | ) | (223,487 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total 21Vianet Group, Inc. shareholders’ equity |
1,652,554 | 1,719,889 | 273,661 | |||||||||
| Non-controlling interest |
17,170 | 18,105 | 2,881 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total shareholders’ equity |
1,669,724 | 1,737,994 | 276,542 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities, mezzanine equity and shareholders’ equity |
2,402,952 | 2,968,248 | 472,291 | |||||||||
|
|
|
|
|
|
|
|||||||
21VIANET GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for number of shares and per share data)
| Three months ended | Nine months ended September 30 | |||||||||||||||||||||||||||
| September 30, 2011 | June 30, 2012 | September 30, 2012 | 2011 | 2012 | ||||||||||||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| Net revenues |
||||||||||||||||||||||||||||
| Hosting and related services |
164,814 | 205,078 | 218,861 | 34,824 | 439,365 | 613,440 | 97,607 | |||||||||||||||||||||
| Managed network services |
96,831 | 159,384 | 177,198 | 28,195 | 263,287 | 492,900 | 78,427 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total net revenues |
261,645 | 364,462 | 396,059 | 63,019 | 702,652 | 1,106,340 | 176,034 | |||||||||||||||||||||
| Cost of revenues |
(190,071 | ) | (261,088 | ) | (285,662 | ) | (45,453 | ) | (514,149 | ) | (794,397 | ) | (126,400 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Gross profit |
71,574 | 103,374 | 110,397 | 17,566 | 188,503 | 311,943 | 49,634 | |||||||||||||||||||||
| Operating expenses |
— | — | ||||||||||||||||||||||||||
| Sales and marketing |
(20,894 | ) | (24,262 | ) | (28,885 | ) | (4,596 | ) | (55,427 | ) | (78,295 | ) | (12,458 | ) | ||||||||||||||
| General and administrative |
(24,643 | ) | (32,004 | ) | (42,622 | ) | (6,782 | ) | (58,508 | ) | (104,125 | ) | (16,568 | ) | ||||||||||||||
| Research and development |
(9,396 | ) | (16,477 | ) | (18,758 | ) | (2,985 | ) | (24,637 | ) | (46,605 | ) | (7,416 | ) | ||||||||||||||
| Changes in the fair value of contingent purchase consideration payable |
54,895 | (2,210 | ) | (12,043 | ) | (1,916 | ) | (43,206 | ) | (57,492 | ) | (9,148 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total operating expenses |
(38 | ) | (74,953 | ) | (102,308 | ) | (16,279 | ) | (181,778 | ) | (286,517 | ) | (45,590 | ) | ||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Operating profit |
71,536 | 28,421 | 8,089 | 1,287 | 6,725 | 25,426 | 4,044 | |||||||||||||||||||||
| Interest income |
7,051 | 4,466 | 4,216 | 671 | 10,591 | 10,442 | 1,661 | |||||||||||||||||||||
| Interest expense |
(1,241 | ) | (1,483 | ) | (1,592 | ) | (253 | ) | (3,693 | ) | (5,391 | ) | (858 | ) | ||||||||||||||
| Investment income |
— | — | 29 | 5 | 29 | 5 | ||||||||||||||||||||||
| Other income |
395 | 406 | 11,209 | 1,784 | 1,341 | 11,616 | 1,848 | |||||||||||||||||||||
| Other expense |
(65 | ) | (22 | ) | (107 | ) | (17 | ) | (276 | ) | (500 | ) | (80 | ) | ||||||||||||||
| Foreign exchange gain (loss) |
24,195 | (3,134 | ) | (1,213 | ) | (193 | ) | 26,013 | (5,729 | ) | (912 | ) | ||||||||||||||||
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| Profit before income taxes |
101,871 | 28,654 | 20,631 | 3,284 | 40,701 | 35,893 | 5,708 | |||||||||||||||||||||
| Income tax expense |
(14,186 | ) | (10,443 | ) | (8,417 | ) | (1,339 | ) | (6,305 | ) | (21,371 | ) | (3,400 | ) | ||||||||||||||
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| Net profit |
87,685 | 18,211 | 12,214 | 1,945 | 34,396 | 14,522 | 2,308 | |||||||||||||||||||||
| Net income attributable to non-controlling interest |
(6,141 | ) | (214 | ) | (363 | ) | (58 | ) | (18,909 | ) | (935 | ) | (149 | ) | ||||||||||||||
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| Net profit attributable to the Company’s ordinary shareholders |
81,544 | 17,997 | 11,851 | 1,887 | 15,487 | 13,587 | 2,159 | |||||||||||||||||||||
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| Earnings per share |
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| Basic |
0.24 | 0.05 | 0.03 | 0.01 | 0.06 | 0.04 | 0.01 | |||||||||||||||||||||
| Diluted |
0.23 | 0.05 | 0.03 | 0.01 | 0.05 | 0.04 | 0.01 | |||||||||||||||||||||
| Shares used in earnings per share computation |
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| Basic* |
338,719,421 | 342,958,701 | 340,885,136 | 340,885,136 | 239,527,651 | 341,971,679 | 341,971,679 | |||||||||||||||||||||
| Diluted* |
354,085,623 | 354,879,200 | 352,729,739 | 352,729,739 | 311,198,141 | 353,994,266 | 353,994,266 | |||||||||||||||||||||
| Earnings per ADS (6 ordinary shares equal to 1 ADS) |
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| EPS - Basic |
1.44 | 0.30 | 0.18 | 0.03 | 0.36 | 0.24 | 0.04 | |||||||||||||||||||||
| EPS - Diluted |
1.38 | 0.30 | 0.18 | 0.03 | 0.30 | 0.24 | 0.04 | |||||||||||||||||||||
| * | Shares used in 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$”) except for number of shares and per share data)
| Three months ended | Nine months ended September 30 | |||||||||||||||||||||||||||
| September 30, 2011 | June 30, 2012 | September 30, 2012 | 2011 | 2012 | ||||||||||||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||||||||||
| Gross profit |
71,574 | 103,374 | 110,397 | 17,566 | 188,503 | 311,943 | 49,634 | |||||||||||||||||||||
| Plus: share-based compensation expense |
356 | 800 | 1,513 | 241 | 1,579 | 2,987 | 475 | |||||||||||||||||||||
| Plus: amortization of intangible assets derived from acquisitions |
6,741 | 6,150 | 6,788 | 1,080 | 21,044 | 19,133 | 3,044 | |||||||||||||||||||||
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| Adjusted gross profit |
78,671 | 110,324 | 118,698 | 18,887 | 211,126 | 334,063 | 53,153 | |||||||||||||||||||||
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| Adjusted gross margin |
30.1 | % | 30.3 | % | 30.0 | % | 30.0 | % | 30.0 | % | 30.2 | % | 30.2 | % | ||||||||||||||
| Operating expenses |
(38 | ) | (74,953 | ) | (102,308 | ) | (16,279 | ) | (181,778 | ) | (286,517 | ) | (45,590 | ) | ||||||||||||||
| Plus: share-based compensation expense |
13,525 | 10,597 | 21,462 | 3,415 | 29,927 | 42,279 | 6,727 | |||||||||||||||||||||
| Plus: changes in the fair value of contingent purchase consideration payable |
(54,895 | ) | 2,210 | 12,043 | 1,916 | 43,206 | 57,492 | 9,148 | ||||||||||||||||||||
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| Adjusted operating expenses |
(41,408 | ) | (62,146 | ) | (68,803 | ) | (10,948 | ) | (108,645 | ) | (186,746 | ) | (29,715 | ) | ||||||||||||||
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| Net profit |
87,685 | 18,211 | 12,214 | 1,945 | 34,396 | 14,522 | 2,308 | |||||||||||||||||||||
| Plus: share-based compensation expense |
13,881 | 11,397 | 22,975 | 3,656 | 31,506 | 45,266 | 7,202 | |||||||||||||||||||||
| Plus: amortization of intangible assets derived from acquisitions |
6,741 | 6,150 | 6,788 | 1,080 | 21,044 | 19,133 | 3,044 | |||||||||||||||||||||
| Plus: changes in the fair value of contingent purchase consideration payable and related deferred tax impact |
(46,661 | ) | 1,879 | 10,237 | 1,629 | 36,725 | 48,868 | 7,776 | ||||||||||||||||||||
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| Adjusted net profit |
61,646 | 37,637 | 52,214 | 8,310 | 123,671 | 127,789 | 20,330 | |||||||||||||||||||||
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| Adjusted net margin |
23.6 | % | 10.3 | % | 13.2 | % | 13.2 | % | 17.6 | % | 11.6 | % | 11.6 | % | ||||||||||||||
| Operating profit |
71,536 | 28,421 | 8,089 | 1,287 | 6,725 | 25,426 | 4,044 | |||||||||||||||||||||
| Plus: depreciation |
16,022 | 19,704 | 23,724 | 3,776 | 40,101 | 63,218 | 10,059 | |||||||||||||||||||||
| Plus: amortization |
7,198 | 8,682 | 9,176 | 1,460 | 22,372 | 24,492 | 3,897 | |||||||||||||||||||||
| Plus: share-based compensation expense |
13,881 | 11,397 | 22,975 | 3,656 | 31,506 | 45,266 | 7,202 | |||||||||||||||||||||
| Plus: changes in the fair value of contingent purchase consideration payable |
(54,895 | ) | 2,210 | 12,043 | 1,916 | 43,206 | 57,492 | 9,148 | ||||||||||||||||||||
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| Adjusted EBITDA |
53,742 | 70,414 | 76,007 | 12,095 | 143,910 | 215,894 | 34,350 | |||||||||||||||||||||
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| Adjusted EBITDA margin |
20.5 | % | 19.3 | % | 19.2 | % | 19.2 | % | 20.5 | % | 19.5 | % | 19.5 | % | ||||||||||||||
| Adjusted net profit |
61,646 | 37,637 | 52,214 | 8,310 | 123,671 | 127,789 | 20,330 | |||||||||||||||||||||
| Less: Net income attributable to non-controlling interest |
(6,141 | ) | (214 | ) | (363 | ) | (58 | ) | (18,909 | ) | (935 | ) | (149 | ) | ||||||||||||||
| Adjusted net profit attributable to the Company’s ordinary shareholders |
55,505 | 37,423 | 51,851 | 8,252 | 104,762 | 126,854 | 20,181 | |||||||||||||||||||||
| Adjusted earnings per share |
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| Basic |
0.16 | 0.11 | 0.15 | 0.02 | 0.44 | 0.37 | 0.06 | |||||||||||||||||||||
| Diluted |
0.16 | 0.11 | 0.15 | 0.02 | 0.35 | 0.36 | 0.06 | |||||||||||||||||||||
| Shares used in adjusted earnings per share computation: |
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| Basic* |
338,719,421 | 342,958,701 | 340,885,136 | 340,885,136 | 239,527,651 | 341,971,679 | 341,971,679 | |||||||||||||||||||||
| Diluted* |
338,719,421 | 354,879,200 | 352,729,739 | 352,729,739 | 297,004,465 | 353,994,266 | 353,994,266 | |||||||||||||||||||||
| Earnings per ADS (6 ordinary shares equal to 1 ADS) |
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| EPS - Basic |
0.96 | 0.66 | 0.90 | 0.14 | 2.64 | 2.22 | 0.35 | |||||||||||||||||||||
| EPS - Diluted |
0.96 | 0.66 | 0.90 | 0.14 | 2.10 | 2.16 | 0.34 | |||||||||||||||||||||
| * | Shares used in adjusted earnings per share/ADS computation were computed under weighted average method. |