Form 6-K

 

 

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 2015

 

 

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/ Terry Wang

Name:   Terry Wang
Title:   Chief Financial Officer

Date: November 27, 2015


Exhibit Index

Exhibit 99.1 — Press Release

EX-99.1

Exhibit 99.1

21Vianet Group, Inc. Reports Third Quarter 2015 Unaudited Financial Results

3Q15 Net Revenues Up 18.7% YOY to RMB924.1 Million

Live Conference Call to be Held at 8:00 PM U.S. Eastern Time, November 24, 2015

BEIJING, November 24, 2015 (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 third quarter of 2015. The Company will hold a conference call at 8:00 p.m. Eastern Time on November 24, 2015. Dial-in details are provided at the end of the release.

Third Quarter 2015 Financial Highlights

 

    Net revenues increased by 18.7% to RMB924.1 million (US$145.4 million) from RMB778.5 million in the comparative period in 2014.

Mr. Steve Zhang, Chief Executive Officer of the Company, stated, “We are pleased with our top-line growth in the third quarter, which was driven by an increase in billable cabinets and additional revenue contribution from the Microsoft cloud business. Through our partnership with IBM, we gained a major deal with BlueMix in October to provide comprehensive datacenter services through 2018. In addition, we are focusing on restructuring our company into different business units in order to better serve the evolving and increasingly specialized market segments. We believe this greater level of autonomy will allow the various units to specialize and optimize in a way to further improve scale, profitability and operating efficiencies. As we expand our datacenter footprint, and leverage our strong partnerships with global tech companies, we remain confident in our ability to scale our business both financially and operationally.”

Mr. Terry Wang, Chief Financial Officer of the Company, commented, “The third quarter witnessed steady top-line growth with revenues increasing 18.7% year over year, which came in above the mid-point of our revenue guidance, despite the ongoing decline of bandwidth pricing in the market. We deployed nearly 600 cabinets in the third quarter, and will accelerate deployment as we close out 2015. We also further increased our data center utilization rate to 71.8% from 67.5% in the preceding quarter, while improving our already low hosting churn rate to 0.26% from 0.37%. On the other hand, EBITDA came in softer than expected, due to the higher spending on telecommunication costs and some lower margin equipment sales to certain broadband retail customers. We continue to face certain challenges in this market, but we are confident that as we restructure our business and invest in growth opportunities, we can reignite growth and solidify our position as a leading internet infrastructure services provider.”

Third Quarter 2015 Financial Results

REVENUES: Net revenues for the third quarter of 2015 increased by 18.7% to RMB924.1 million (US$145.4 million) from RMB778.5 million in the comparative period in 2014, primarily driven by the year-over-year growth in the IDC business, elevated demand for the Company’s cloud enabler services, as well as the contribution from Dermot Entities that the Company acquired in August, 2014. The increase in net revenues was partly offset by the continued softness in managed network services.

Net revenues from hosting and related services increased by 35.6% to RMB695.8 million (US$109.5 million) in the third quarter of 2015 from RMB513.2 million in the comparative period in 2014, primarily due to the increase in the total number of billable cabinets under management and strong growth in the Company’s cloud services. Net revenues from managed network services were RMB228.3 million (US$35.9 million) in the third quarter of 2015, compared with RMB265.3 million in the comparative period in 2014, primarily due to the continued decline of bandwidth selling prices and losses of certain customers.


GROSS PROFIT: Gross profit for the third quarter of 2015 was RMB200.3 million (US$31.5 million), compared with RMB230.9 million in the comparative period in 2014. Gross margin for the third quarter of 2015 was 21.7%, compared with 29.7% in the comparative period in 2014. The decrease in gross margin was primarily due to higher spending on telecommunication services, lower selling bandwidth prices and some lower margin equipment sales to broadband retail customers.

Adjusted gross profit, which excludes share-based compensation expenses and amortization of intangible assets derived from acquisitions, was RMB240.5 million (US$37.8 million), compared with RMB264.5 million in the comparative period in 2014. Adjusted gross margin was 26.0% in the third quarter of 2015, compared with 34.0% in the comparative period in 2014.

OPERATING EXPENSES: Total operating expenses increased to RMB263.9 million (US$41.5 million) from RMB142.9 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 RMB230.9 million (US$36.3 million) from RMB198.4 million in the comparative period in 2014. As a percentage of net revenue, adjusted operating expenses were 25.0%, compared with 25.5% in the comparative period in 2014 and 24.2% in the second quarter of 2015.

Sales and marketing expenses increased by 3.8% to RMB89.2 million (US$14.0 million) from RMB85.9 million in the comparative period in 2014, primarily due to higher service fees, which were mostly offset by lower labor costs as the Company outsourced some functions to more cost-effective service providers.

General and administrative expenses increased by 53.5% to RMB138.8 million (US$21.8 million) from RMB90.4 million in the comparative period in 2014, primarily due to expenses associated with previously issued employee stock options and increased headcount associated with the growth in the Company’s overall business.

Research and development expenses increased by 11.9% to RMB35.2 million (US$5.5 million) from RMB31.4 million in the comparative period in 2014, which reflected the Company’s efforts to further strengthen its research and development capabilities and expand its cloud computing and CDN service offerings.

Change in the fair value of contingent purchase consideration payable was a loss of RMB0.7 million (US$0.1 million) in the third quarter of 2015, compared with a gain of RMB64.9 million in the comparative period in 2014.

ADJUSTED EBITDA: Adjusted EBITDA for the third quarter of 2015 was RMB122.0 million (US$19.2 million), compared with RMB153.9 million in the comparative period in 2014. Adjusted EBITDA margin for the quarter was 13.2% compared with 19.8% in the comparative period in 2014 and 17.2% in the second quarter of 2015. Adjusted EBITDA in the third quarter of 2015 excludes share-based compensation expenses of RMB33.7 million (US$5.3 million) and changes in the fair value of contingent purchase consideration payable of RMB0.7 million (US$0.1 million).

NET PROFIT/LOSS: Net loss for the third quarter of 2015 was RMB57.9 million (US$9.1 million), compared with a net income of RMB37.9 million in the comparative period in 2014.

Adjusted net profit for the third quarter of 2015 was RMB15.4 million (US$2.4 million) compared with an adjusted net profit of RMB16.0 million in the comparative period in 2014. Adjusted net profit in the third quarter of 2015 excludes share-based compensation expenses of RMB33.7 million (US$5.3 million), amortization of intangible assets derived from acquisitions of RMB38.9 million (US$6.1 million), changes in the fair value of contingent purchase consideration payable of RMB0.7 million (US$0.1 million) in the aggregate. Adjusted net margin was 1.7%, compared with 2.1% in the comparative period in 2014 and negative 1.8% in the second quarter of 2015.


EARNING/LOSS PER SHARE: Diluted loss per ordinary share for the third quarter of 2015 was RMB0.12, which represents the equivalent of RMB0.72 (US$0.11) per American Depositary Share (“ADS”). Each ADS represents six ordinary shares. Adjusted diluted earnings per share for the third quarter of 2015 was RMB0.02, which represents the equivalent of RMB0.12 (US$0.02) per ADS. Adjusted earnings per share is calculated using adjusted net profit as discussed above divided by the weighted average number of shares.

As of September 30, 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 September 30, 2015, the Company’s cash and cash equivalents and short-term investment were RMB1.9 billion (US$296.1 million).

Third Quarter 2015 Operational Highlights

 

    Monthly Recurring Revenues (“MRR”) per cabinet was RMB9,900 in the third quarter of 2015, compared with RMB9,872 in the second quarter of 2015.

 

    Total cabinets under management increased to 22,827 as of September 30, 2015 from 22,238 as of June 30, 2015, with 15,400 cabinets in the Company’s self-built data centers and 7,427 cabinets in its partnered data centers.

 

    Utilization rate was 71.8% in the third quarter of 2015, compared with 67.5% in the second quarter of 2015.

 

    Hosting churn rate, which is based on the Company’s core IDC business, was 0.26% in the third quarter of 2015, compared with 0.37% in the second quarter of 2015.

Recent Developments

On September 23, 2015, at the 8th US-China Internet Industry Forum, the Company, Unisplendour Corporation Limited (UNIS) and Microsoft signed an agreement to provide customized hybrid cloud computing solutions and related services to Chinese users. The three parties showed their cooperative accomplishments and innovations at Microsoft’s Ignite China Conference, which marked a new milestone in their business developments and cooperation.

On October 14, 2015, the Company signed an additional partnership agreement with IBM for the Bluemix China landing project. Under the terms of the agreement, the Company will provide infrastructure support and operational services to IBM for Bluemix’s entry into the China market.

On October 19, 2015, the Company’s board of directors appointed Mr. Steve Zhang as the Chief Executive Officer of the Company. Mr. Zhang replaces Mr. Josh Chen, founder of the Company, who continues to serve as the Executive Chairman of the Board.

Financial Outlook

For the fourth quarter of 2015, the Company expects net revenues to be in the range of RMB960 million to RMB1.0 billion, representing approximately 15% year-over-year growth at the mid-point. Adjusted EBITDA is expected to be in the range of RMB100 million to RMB120 million, representing approximately 31% year-over-year decline at the mid-point.

For the full year 2015, the Company now expects net revenues to be in the range of RMB3.61 billion to RMB3.65 billion (revised from prior guidance of RMB3.58 billion to RMB3.68 billion), representing approximately 26% growth over 2014 at the mid-point. Adjusted EBITDA for the full year 2015 is expected to be in the range of RMB538 million to RMB558 million (revised from prior guidance of RMB620 million to RMB660 million), representing approximately 2% decline over 2014 at the mid-point. These forecasts reflect the Company’s current and preliminary view, which may be subject to change.


Conference Call

The Company will hold a conference call on Tuesday, November 24, 2015 at 8:00 pm Eastern Time, or Wednesday, November 25, 2015 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:   # 69806683

The replay will be accessible through December 2, 2015 by dialing the following numbers:

 

United States Toll Free:   +1-855-452-5696
International:   +61-2-90034211
Conference ID:   # 69806683

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 RMB6.3556 to US$1.00, the noon buying rate in effect on September 30, 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, the outlook for the second quarter and full year of 2015 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. All information provided in this press release and in the attachments is as of the date of this press release, and 21Vianet undertakes no duty to update such information, except as required under applicable law.

Investor Relations Contacts:

21Vianet Group, Inc.

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

Source: 21Vianet Group, Inc.


21VIANET GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))

 

     As of     As of  
   December 31, 2014     September 30, 2015  
     RMB     RMB     US$  
     (Audited)     (Unaudited)     (Unaudited)  

Assets

      

Current assets:

      

Cash and cash equivalents

     644,415        1,399,465        220,194   

Restricted cash

     161,649        141,715        22,298   

Accounts and notes receivable, net

     739,945        783,702        123,309   

Short-term investments

     911,242        482,545        75,924   

Inventories

     10,059        8,806        1,386   

Prepaid expenses and other current assets

     309,441        574,278        90,363   

Deferred tax assets

     35,002        31,461        4,950   

Amount due from related parties

     54,867        86,788        13,655   
  

 

 

   

 

 

   

 

 

 

Total current assets

     2,866,620        3,508,760        552,079   

Non-current assets:

      

Property and equipment, net

     3,036,707        3,519,219        553,719   

Intangible assets, net

     1,404,453        1,309,621        206,058   

Land use right

     66,175        65,056        10,236   

Deferred tax assets

     42,573        51,755        8,143   

Goodwill

     1,755,970        1,755,970        276,287   

Long term investments

     126,307        158,417        24,926   

Restricted cash

     121,415        125,913        19,811   

Amount due from related parties

     98,500        70,000        11,014   

Other non-current assets

     121,461        122,740        19,312   
  

 

 

   

 

 

   

 

 

 

Total non-current assets

     6,773,561        7,178,691        1,129,506   
  

 

 

   

 

 

   

 

 

 

Total assets

     9,640,181        10,687,451        1,681,585   
  

 

 

   

 

 

   

 

 

 

Liabilities and Shareholders’ Equity

      

Current liabilities:

      

Short-term bank borrowings

     160,181        270,000        42,482   

Accounts and notes payable

     386,074        447,228        70,368   

Accrued expenses and other payables

     599,491        605,545        95,284   

Deferred revenue

     347,441        333,238        52,432   

Advances from customers

     97,679        177,238        27,887   

Income taxes payable

     35,013        56,820        8,940   

Amounts due to related parties

     326,804        401,066        63,104   

Current portion of long-term bank borrowings

     955,647        21,593        3,397   

Current portion of capital lease obligations

     71,939        92,619        14,573   

Current portion of deferred government grant

     6,150        5,776        909   

Current portion of bonds payable

     —          264,204        41,570   

Deferred tax liabilities

     2,696        43        7   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     2,989,115        2,675,370        420,953   

Non-current liabilities:

      

Long-term bank borrowings

     61,673        100,767        15,855   

Deferred revenue

     74,044        69,953        11,007   

Amounts due to related parties

     280,728        19,215        3,023   

Unrecognized tax benefits

     20,453        12,499        1,967   

Deferred tax liabilities

     310,340        288,851        45,448   

Non-current portion of capital lease obligations

     511,679        501,668        78,933   

Non-current portion of deferred government grant

     27,422        33,233        5,229   

Bonds payable

     2,264,064        2,000,000        314,683   

Mandatorily redeemable noncontrolling interests

     100,000        100,000        15,734   
  

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     3,650,403        3,126,186        491,879   

Redeemable noncontrolling interests

     773,706        779,537        122,654   

Shareholders’ equity

      

Treasury stock

     (213,665     (193,142     (30,389

Ordinary shares

     26        34        5   

Additional paid-in capital

     4,225,029        6,378,119        1,003,543   

Accumulated other comprehensive income loss

     (65,754     (50,836     (7,999

Statutory reserves

     52,263        59,929        9,429   

Accumulated deficit

     (1,794,975     (2,106,656     (331,465

Total 21Vianet Group, Inc. shareholders’ equity

     2,202,924        4,087,448        643,124   

Non-controlling interest

     24,033        18,910        2,975   
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     2,226,957        4,106,358        646,099   
  

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

     9,640,181        10,687,451        1,681,585   
  

 

 

   

 

 

   

 

 

 


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  
     Sept 30, 2014     June 30, 2015     September 30, 2015     September 30, 2014     September 30, 2015  
     RMB     RMB     RMB     US$     RMB     RMB     US$  
     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Net revenues

              

Hosting and related services

     513,212        643,709        695,802        109,479        1,384,467        1,952,739        307,247   

Managed network services

     265,313        223,078        228,293        35,920        638,070        698,250        109,864   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     778,525        866,787        924,095        145,399        2,022,537        2,650,989        417,111   

Cost of revenues

     (547,666     (662,810     (723,828     (113,888     (1,450,427     (2,016,400     (317,264
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     230,859        203,977        200,267        31,511        572,110        634,589        99,847   

Operating expenses

              

Sales and marketing

     (85,947     (78,031     (89,232     (14,040     (187,154     (257,663     (40,541

General and administrative

     (90,383     (166,885     (138,783     (21,836     (333,733     (434,876     (68,424

Research and development

     (31,435     (32,059     (35,176     (5,535     (81,770     (101,266     (15,933

Changes in the fair value of contingent purchase consideration payable

     64,895        (16,643     (676     (106     22,160        (38,265     (6,021
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     (142,870     (293,618     (263,867     (41,517     (580,497     (832,070     (130,919
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other operating income

     —          8,569        —          —          —          8,569        1,348   

Operating profit (loss)

     87,989        (81,072     (63,600     (10,006     (8,387     (188,912     (29,724

Interest income

     20,227        20,449        13,523        2,128        55,042        47,802        7,521   

Interest expense

     (67,950     (71,664     (69,690     (10,965     (165,489     (213,221     (33,549

Loss on debt extinguishment

     —          —          —          —          (41,581     —          —     

(Loss) Income from equity method investment

     (509     123        706        111        (749     12,124        1,908   

Other income

     7,300        2,876        5,779        909        11,147        10,315        1,623   

Other expense

     (804     (183     (719     (113     (970     (1,853     (292

Foreign exchange (loss) gain

     (1,861     (5,269     60,248        9,480        (7,500     65,146        10,250   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit (Loss) before income taxes

     44,392        (134,740     (53,753     (8,456     (158,487     (268,599     (42,263

Income tax expense

     (6,493     (7,091     (4,132     (650     (14,505     (19,786     (3,113
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated net profit (loss)

     37,899        (141,831     (57,885     (9,106     (172,992     (288,385     (45,376

Net loss (profit) attributable to non-controlling interest

     1,704        (3,315     (4,257     (670     (1,400     (15,630     (2,459
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net profit (loss) attributable to ordinary shareholders

     39,603        (145,146     (62,142     (9,776     (174,392     (304,015     (47,835
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (Loss) per share

              

Basic

     0.10        (0.28     (0.12     (0.02     (0.43     (0.62     (0.10

Diluted

     0.09        (0.28     (0.12     (0.02     (0.43     (0.62     (0.10

Shares used in earnings per share computation

              

Basic*

     404,495,442        489,847,525        521,376,112        521,376,112        401,775,444        481,524,589        481,524,589   

Diluted*

     418,601,672        489,847,525        521,376,112        521,376,112        401,775,444        481,524,589        481,524,589   

Earnings (Loss) per ADS (6 ordinary shares equal to 1 ADS)

              

Basic

     0.60        (1.68     (0.72     (0.11     (2.58     (3.72     (0.59

Diluted

     0.54        (1.68     (0.72     (0.11     (2.58     (3.72     (0.59

 

* 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     Nine months ended September 30  
     September 30, 2014     June 30, 2015     September 30, 2015     September 30, 2014     September 30, 2015  
     RMB     RMB     RMB     US$     RMB     RMB     US$  

Gross profit

     230,859        203,977        200,267        31,511        572,110        634,589        99,847   

Plus: share-based compensation expense

     -117        2,305        1,323        208        3,441        5,840        919   

Plus: amortization of intangible assets derived from acquisitions

     33,793        39,434        38,933        6,126        57,969        118,536        18,651   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted gross profit

     264,535        245,716        240,523        37,845        633,520        758,965        119,417   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted gross margin

     34.0     28.3     26.0     26.0     31.3     28.6     28.6

Operating expenses

     (142,870     (293,618     (263,867     (41,517     (580,497     (832,070     (130,919

Plus: share-based compensation expense

     9,348        67,496        32,328        5,087        161,428        144,068        22,668   

Plus: changes in the fair value of contingent purchase consideration payable

     (64,895     16,643        676        106        (22,160     38,265        6,021   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating expenses

     (198,417     (209,479     (230,863     (36,324     (441,229     (649,737     (102,230
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net profit (loss)

     37,899        (141,831     (57,885     (9,106     (172,992     (288,385     (45,376

Plus: share-based compensation expense

     9,231        69,801        33,651        5,295        164,869        149,908        23,587   

Plus: amortization of intangible assets derived from acquisitions

     33,793        39,434        38,933        6,126        57,969        118,536        18,651   

Plus: changes in the fair value of contingent purchase consideration payable and related deferred tax impact

     (64,895     16,643        676        106        (19,176     38,265        6,021   

Plus: loss on debt extinguishment

     —          —          —          —          41,581        —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net profit (loss)

     16,028        (15,953     15,375        2,421        72,251        18,324        2,883   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net margin

     2.1     -1.8     1.7     1.7     3.6     0.7     0.7

Net profit (loss)

     37,899        (141,831     (57,885     (9,106     (172,992     (288,385     (45,376

Minus: Provision for income taxes

     (6,493     (7,091     (4,132     (650     (14,505     (19,786     (3,113

Minus: Interest income

     20,227        20,449        13,523        2,128        55,042        47,802        7,521   

Minus: Interest expenses

     (67,950     (71,664     (69,690     (10,965     (165,489     (213,221     (33,549

Minus: loss on debt extinguishment

     —          —          —          —          (41,581     —          —     

Minus: Exchange (loss) gain

     (1,861     (5,269     60,248        9,480        (7,500     65,146        10,250   

Minus: (Loss) Income from equity method investment

     (509     123        706        111        (749     12,124        1,908   

Minus: Other income

     7,300        2,876        5,779        909        11,147        10,315        1,623   

Minus: Other expenses

     (804     (183     (719     (113     (970     (1,853     (292

Plus: depreciation

     79,637        98,462        104,340        16,417        185,746        296,680        46,680   

Plus: amortization

     41,961        45,517        46,947        7,387        78,752        142,340        22,396   

Plus: share-based compensation expense

     9,231        69,801        33,651        5,295        164,869        149,908        23,587   

Plus: changes in the fair value of contingent purchase consideration payable

     (64,895     16,643        676        106        (22,160     38,265        6,021   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     153,923        149,351        122,014        19,199        398,820        438,281        68,960   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     19.8     17.2     13.2     13.2     19.7     16.5     16.5

Adjusted net profit (loss)

     16,028        (15,953     15,375        2,421        72,251        18,324        2,883   

Less: Net loss (profit) attributable to non-controlling interest

     1,704        (3,315     (4,257     (670     (1,400     (15,630     (2,459

Adjusted net profit (loss) attributable to the Company’s ordinary shareholders

     17,732        (19,268     11,118        1,751        70,851        2,694        424   

Adjusted earnings (loss) per share

              

Basic

     0.04        (0.02     0.02        0.00        0.18        0.02        0.00   

Diluted

     0.04        (0.02     0.02        0.00        0.17        0.02        0.00   

Shares used in adjusted earnings per share computation:

              

Basic*

     404,495,442        489,847,525        521,376,112        521,376,112        401,775,444        481,524,589        481,524,589   

Diluted*

     418,601,672        489,847,525        536,927,693        536,927,693        415,628,732        494,976,649        494,976,649   

Earnings (loss) per ADS (6 ordinary shares equal to 1 ADS)

              

Basic

     0.24        (0.12     0.12        0.02        1.08        0.12        0.02   

Diluted

     0.24        (0.12     0.12        0.02        1.02        0.12        0.02   

 

* 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  
     June 30, 2015     September 30, 2015  
     RMB     RMB     US$  
     (Unaudited)     (Unaudited)     (Unaudited)  

CASH FLOWS FROM OPERATING ACTIVITIES

      

Net loss

     (141,831     (57,885     (9,108

Adjustments to reconcile net profit to net cash generated from operating activities:

         —     

Foreign exchange loss (gain)

     5,269        (60,248     (9,480

Changes in the fair value of contingent purchase consideration payable

     16,643        676        106   

Depreciation of property and equipment

     98,462        104,340        16,417   

Amortization of intangible assets

     44,086        46,016        7,240   

Loss on disposal of property and equipment

     30        167        26   

Provision for doubtful accounts and other receivables

     2,818        6,971        1,097   

Share-based compensation expense

     69,802        21,339        3,358   

Deferred income taxes benefit

     (7,493     (10,158     (1,598

Gain from equity method investment

     (123     (706     (111

Changes in operating assets and liabilities

      

Restricted cash

     (46,161     (9,933     (1,563

Inventories

     (1,413     3,297        519   

Accounts and notes receivable

     213        (43,713     (6,878

Unrecognized tax expense

     (9,842     602        95   

Prepaid expenses and other current assets

     (125,384     (40,330     (6,346

Amounts due from related parties

     (667     (1,452     (228

Accounts and notes payable

     (16,598     36,276        5,708   

Accrued expenses and other payables

     (17,548     42,118        6,627   

Deferred revenue

     (14,716     5,800        913   

Advances from customers

     27,048        43,978        6,920   

Income taxes payable

     (2,397     12,746        2,005   

Amounts due to related parties

     (950     3,777        594   

Deferred government grants

     (610     (1,553     (244
  

 

 

   

 

 

   

 

 

 

Net cash (used in) generated from operating activities

     (121,361     102,125        16,069   
  

 

 

   

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

      

Purchases of property and equipment

     (232,069     (215,292     (33,874

Purchases of intangible assets

     (12,258     (16,353     (2,573

Proceeds from disposal of property and equipment

     137        (4,952     (779

Advances of loan to third parties

     (3,760     (5,104     (803

Payments for short-term investments

     (819,274     (88,145     (13,869

Proceeds received from maturity of short-term investments

     94,000        1,090,577        171,593   

Net cash (used in) generated from investing activities

     (973,224     760,731        119,695   
  

 

 

   

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

      

Restricted cash

     83,751        (31,176     (4,905

Proceeds from exercise of stock options

     2,687        1,309        206   

Proceeds from shareholders

     1,181,825        —          —     

Proceeds from long-term bank borrowings

     31,710        —          —     

Proceeds from short-term bank borrowings

     109,000        40,000        6,294   

Repayments of short-term bank borrowings

     (60,000     (20,000     (3,147

Repayments of long-term bank borrowings

     (63,310     (902,496     (142,000

Payments for acquisitions

     —          (4,543     (715

Interest payment for 2016 Bond

     —          (10,386     (1,634

Payments for capital leases

     (24,023     (21,182     (3,333
  

 

 

   

 

 

   

 

 

 

Net cash generated from (used in) financing activities

     1,261,640        (948,474     (149,234
  

 

 

   

 

 

   

 

 

 

Effect of foreign exchange rate changes on cash and short term investments

     (2,835     43,448        6,836   

Net increase (decrease) in cash and cash equivalents

     164,220        (42,170     (6,635

Cash and cash equivalents at beginning of period

     1,277,414        1,441,635        226,829   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

     1,441,635        1,399,465        220,194