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Form 6-K 21Vianet Group, Inc. For: May 27

May 27, 2016 6:21 AM EDT

 

 

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 May 2016

 

 

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: May 27, 2016


Exhibit Index

Exhibit 99.1 — Press Release

Exhibit 99.1

21Vianet Group, Inc. Reports First Quarter 2016

Unaudited Financial Results

Live Conference Call to be Held at 8:00 PM U.S. Eastern Time, May 26, 2016

BEIJING, May 26, 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 first quarter of 2016. The Company will hold a conference call at 8:00 p.m. Eastern Time on May 26, 2016. Dial-in details are provided at the end of the release.

First Quarter 2016 Financial Highlights

 

    Net revenues increased to RMB862.3 million (US$133.7 million) from RMB860.1 million in the comparative period in 2015.

Mr. Steve Zhang, Chief Executive Officer of the Company, stated, “First of all, we are very excited to welcome an industry leader, Tus-Holdings, as a major strategic investor in our company and believe that its investment offers significant strategic values in strengthening our core operations and expanding new business opportunities. During the first quarter, we continued to execute on our strategies to grow our core businesses organically while maintaining a disciplined approach in our cost structure. Our IDC business remains a steady growth engine, driven by improving utilization rate, relatively low churn and strong billing cabinet sales, especially in tier one markets. Additionally, we are pleased to see demand for our cloud services remained strong thanks to continued traction with the Windows Azure and Office 365 product offerings. However, as we restructure our business and invest in our core growth opportunities, we also witnessed certain industry challenges and non-recurring factors. Solid year-over-year growth in IDC, cloud and VPN revenues were offset by continued weakness in MNS business, seasonal headwinds in our content delivery network business and the optimization process in Aipu business. However, going forward, we are confident that we can overcome these challenges, reignite growth and profitability and strengthen our position as a leading internet infrastructure services provider.”

Mr. Terry Wang, Chief Financial Officer of the Company, commented, “Our total revenues in the first quarter increased to RMB862.3 million (US$133.7 million), primarily driven by solid year-over-year growth in our hosting line, including IDC, cloud and VPN. Overall number of cabinets reached 23,825 and our data center utilization rate improved to 74.6% from 71.7%. Additionally, we also tightened our cost by reducing sales agency fees and consulting fees, reducing our total operating expenses to RMB254.5 million (US$39.5 million) in the first quarter of 2016. However, hosting revenue growth was partially offset by the continued bandwidth pricing pressure in our MNS business and as we trimmed some of the lower margin revenue in the Aipu business. As the entire operations team is proactively working to address these challenges, we will continue to fine-tune our cost structure and become more disciplined in our capital investment programs going forward.”

First Quarter 2016 Financial Results

REVENUES: Net revenues for the first quarter of 2016 increased by 0.3% to RMB862.3 million (US$133.7 million) from RMB860.1 million in the comparative period in 2015, primarily driven by a year-over-year increase in IDC, cloud and VPN revenues, partially offset by the decline in MNS revenues.


Net revenues from hosting and related services increased by 15.1% to RMB706.1 million (US$109.5 million) in the first quarter of 2016 from RMB613.2 million in the comparative period in 2015, primarily due to the year-over-year increase in total number of billable cabinets and improved utilization rate, partially offset by lower MRR, or monthly recurring revenue, per cabinet. Net revenues from MNS were RMB156.1 million (US$24.2 million) in the first quarter of 2016, compared with RMB246.9 million in the comparative period in 2015. The decrease is primarily due to the continued industry-wide decline in bandwidth prices and lower than expected revenues from Aipu due to fierce competition and weaker equipment sales.

GROSS PROFIT: Gross profit for the first quarter of 2016 was RMB169.0 million (US$26.2 million), compared with RMB230.3 million in the comparative period in 2015. Gross margin for the first quarter of 2016 was 19.6%, compared with 26.8% in the comparative period in 2015. 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 RMB211.1 million (US$32.7 million) in the first quarter of 2016, compared with RMB272.7 million in the comparative period in 2015. Adjusted gross margin was 24.5% in the first quarter of 2016, compared with 31.7% in the comparative period in 2015.

OPERATING EXPENSES: Total operating expenses decreased to RMB254.5 million (US$39.5 million) in the first quarter of 2016 from RMB274.6 million in the comparative period in 2015. Adjusted operating expenses, which exclude share-based compensation expenses and the changes in the fair value of contingent purchase consideration payable, increased to RMB219.5 million (US$34.0 million) from RMB209.4 million in the comparative period in 2015. As a percentage of net revenue, adjusted operating expenses were 25.5%, compared with 24.3% in the comparative period in 2015 and 28.1% in the fourth quarter of 2015.

Sales and marketing expenses decreased by 14.5% to RMB77.3 million (US$12.0 million) in the first quarter of 2016 from RMB90.4 million in the comparative period in 2015, primarily due to reduced staffing costs and sales agency fees.

General and administrative expenses increased by 3.6% to RMB133.8 million (US$20.8 million) in the first quarter of 2016 from RMB129.2 million in the comparative period in 2015, primarily due to increased staff cost, but partially offset by lower consulting fees and share-based compensation expenses.

Research and development expenses increased by 23.0% to RMB41.9 million (US$6.5 million) in the first quarter of 2016 from RMB34.0 million in the comparative period in 2015 as we continued to invest in key strategic growth areas.

Change in the fair value of contingent purchase consideration payable was a loss of RMB1.5 million (US$0.2 million) in the first quarter of 2016, compared with a loss of RMB20.9 million in the comparative period in 2015.

ADJUSTED EBITDA: Adjusted EBITDA for the first quarter of 2016 was RMB108.6 million (US$16.8 million), compared with RMB166.9 million in the comparative period in 2015. Adjusted EBITDA margin for the first quarter of 2016 was 12.6% compared with 19.4% in the comparative period in 2015 and 10.4% in the fourth quarter of 2015. Adjusted EBITDA for the first quarter of 2016 excludes share-based compensation expenses of RMB37.4 million (US$5.8 million) and changes in the fair value of contingent purchase consideration payable which was a loss of RMB1.5 million (US$0.2 million).

NET PROFIT/LOSS: Net loss for the first quarter of 2016 was RMB151.3 million (US$23.5 million), compared with a net loss of RMB88.7 million in the comparative period in 2015.

Adjusted net loss for the first quarter of 2016 was RMB73.8 million (US$11.4 million) compared with an adjusted net profit of RMB18.9 million in the comparative period in 2015. Adjusted net loss in the first quarter of 2016 excludes share-based compensation expenses of RMB37.4 million (US$5.8 million), amortization of intangible assets derived from acquisitions of RMB38.2 million (US$5.9 million), changes in the fair value of contingent purchase consideration payable and related deferred tax assets which was a loss of RMB2.0 million (US$0.3 million) in aggregate. Adjusted net margin in the first quarter of 2016 was negative 8.6%, compared with 2.2% in the comparative period in 2015 and negative 3.0% in the fourth quarter of 2015.


LOSS PER SHARE: Diluted loss per ordinary share for the first quarter of 2016 was RMB0.28, which represents the equivalent of RMB1.68 (US$0.26) per American Depositary Share (“ADS”). Each ADS represents six ordinary shares. Adjusted diluted loss per share for the first quarter of 2016 was RMB0.14, which represents the equivalent of RMB0.84 (US$0.13) 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 March 31, 2016, the Company had a total of 524.2 million ordinary shares outstanding, or equivalent of 87.4 million ADSs.

BALANCE SHEET: As of March 31, 2016, the Company’s cash and cash equivalents and short-term investment were RMB1.24 billion (US$192.0 million).

First Quarter 2016 Operational Highlights

 

    Monthly Recurring Revenues (“MRR”) was RMB9,115 in the first quarter of 2016, compared with RMB10,030 in the fourth quarter of 2015.

 

    Total cabinets under management increased to 23,825 as of March 31, 2016 from 23,556 as of December 31, 2015, with 15,998 cabinets in the Company’s self-built data centers and 7,827 cabinets in its partnered data centers.

 

    Utilization rate was 74.6% in the first quarter of 2016, compared with 71.7% in the fourth quarter of 2015.

 

    Hosting churn rate, which is based on the Company’s core IDC business, was 0.41% in the first quarter of 2016, compared with 0.14% in the fourth quarter of 2015.

Recent Developments

On January 6, 2016, at the 10th Internet Data Center Conference (“IDCC”) held in Beijing, the Company was awarded the “Innovative enterprise in China IDC industry 2015” and “Most influential enterprise in China IDC industry 2015” awards.

On March 31, 2016, the company was invited to the “7th Annual China Communication and Cloud Computing Industry Summit,” which was held by China Network Information Industry (“CNII”). At the ceremony, 21Vianet received a “Preferred Brand in Hybrid Cloud” award by the organizing committees.

Effective June 1, 2016, Mr. Eden Woon will resign as a director of the board of directors of the Company.

On May 23, 2016, the Company announced that it has entered into definitive Share Subscription Agreement with an affiliated investment vehicle of Tus-Holdings Co., Ltd. (“Tus-Holding”), pursuant to which Tus-Holdings agrees to make a total of US$388 million investment in 21Vianet, with a share subscription price of approximately US$2.712 per ordinary share, or US$16.274 per ADS. The investment will all be in newly issued 31,996,874 Class A ordinary shares and 111,053,390 Class B ordinary shares.

Conference Call

The Company will hold a conference call on Thursday, May 26, 2016 at 8:00 pm Eastern Time, or Friday, May 27, 2016 at 8:00 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:    # 6156959


The replay will be accessible through June 3, 2016 by dialing the following numbers:

 

United States Toll Free:    +1-855-452-5696
International:    +61-2-90034211
Conference ID:    # 6156959

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 RMB6.448 to US$1.00, the noon buying rate in effect on March 31, 2016 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.

Investor Relations Contacts:

21Vianet Group, Inc.

Eric Chu, CFA

+1 908 707 2062

[email protected]

Queenie Liu

+86 10 8456 2121

[email protected]

ICR, Inc.

Simic Chan

+1 (646) 405-4922

[email protected]

Source: 21Vianet Group, Inc.


21VIANET GROUP, INC.

CONSOLIDATED BALANCE SHEETS

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

 

     As of
December 31, 2015
   

As of

March 31, 2016

 
    

RMB

(Audited)

    RMB
(Unaudited)
    US$
(Unaudited)
 

Assets

      

Current assets:

      

Cash and cash equivalents

     1,685,054        1,223,815        189,798   

Restricted cash

     195,230        267,253        41,447   

Accounts and notes receivable, net

     694,108        762,554        118,262   

Short-term investments

     104,897        13,877        2,152   

Inventories

     13,539        11,626        1,803   

Prepaid expenses and other current assets

     642,553        748,252        116,043   

Deferred tax assets

     31,113        24,801        3,846   

Amount due from related parties

     105,137        88,781        13,769   
  

 

 

   

 

 

   

 

 

 

Total current assets

     3,471,631        3,140,959        487,120   

Non-current assets:

      

Property and equipment, net

     3,653,071        3,687,302        571,852   

Intangible assets, net

     1,274,166        1,232,363        191,123   

Land use right, net

     64,682        64,330        9,977   

Deferred tax assets

     46,900        47,417        7,354   

Goodwill

     1,755,970        1,755,970        272,328   

Long term investments

     198,907        200,108        31,034   

Restricted cash

     128,515        39,174        6,075   

Amount due from related parties

     70,000        70,000        10,856   

Other non-current assets

     183,868        200,283        31,061   
  

 

 

   

 

 

   

 

 

 

Total non-current assets

     7,376,079        7,296,947        1,131,660   
  

 

 

   

 

 

   

 

 

 

Total assets

     10,847,710        10,437,906        1,618,780   
  

 

 

   

 

 

   

 

 

 

Liabilities and Shareholders’ Equity

      

Current liabilities:

      

Short-term bank borrowings

     276,000        241,000        37,376   

Accounts and notes payable

     482,622        546,805        84,802   

Accrued expenses and other payables

     637,957        634,809        98,447   

Deferred revenue

     342,105        340,635        52,828   

Advances from customers

     185,800        194,276        30,130   

Income taxes payable

     49,959        58,386        9,055   

Amounts due to related parties

     397,588        395,063        61,269   

Current portion of long-term bank borrowings

     38,803        39,511        6,128   

Current portion of capital lease obligations

     140,488        158,832        24,633   

Current portion of deferred government grant

     6,332        6,179        958   

Current portion of bonds payable

     263,365        —          —     
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     2,821,019        2,615,496        405,626   

Non-current liabilities:

      

Long-term bank borrowings

     103,421        151,269        23,460   

Deferred revenue

     68,535        69,110        10,718   

Amounts due to related parties

     27,384        28,435        4,410   

Unrecognized tax benefits

     14,492        15,407        2,389   

Deferred tax liabilities

     293,212        286,521        44,436   

Non-current portion of capital lease obligations

     579,070        557,413        86,447   

Non-current portion of deferred government grant

     31,288        29,830        4,626   

Bonds payable

     1,984,685        1,986,633        308,101   

Mandatorily redeemable noncontrolling interests

     100,000        —          —     
  

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     3,202,087        3,124,618        484,587   

Redeemable noncontrolling interests

     790,229        787,322        122,103   

Shareholders’ equity

      

Treasury stock

     (193,142     (162,428     (25,190

Ordinary shares

     34        34        5   

Additional paid-in capital

     6,403,117        6,391,474        991,234   

Accumulated other comprehensive loss

     (24,236     (24,953     (3,870

Statutory reserves

     63,174        63,782        9,892   

Accumulated deficit

     (2,233,985     (2,377,393     (368,702
  

 

 

   

 

 

   

 

 

 

Total 21Vianet Group, Inc. shareholders’ equity

     4,014,962        3,890,516        603,369   

Noncontrolling interest

     19,413        19,954        3,095   
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     4,034,375        3,910,470        606,464   
  

 

 

   

 

 

   

 

 

 

Total liabilities, redeemable noncontrolling interests and shareholders’ equity

     10,847,710        10,437,906        1,618,780   
  

 

 

   

 

 

   

 

 

 


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  
     March 31, 2015     December 31,2015     March 31, 2016  
     RMB
(Unaudited)
   

RMB

(Unaudited)

    RMB
(Unaudited)
    US$
(Unaudited)
 

Net revenues

        

Hosting and related services

     613,228        754,706        706,126        109,511   

Managed network services

     246,879        228,677        156,146        24,216   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     860,107        983,383        862,272        133,727   

Cost of revenues

     (629,762     (764,214     (693,292     (107,520
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     230,345        219,169        168,980        26,207   

Operating expenses

        

Sales and marketing

     (90,400     (101,797     (77,315     (11,991

General and administrative

     (129,208     (166,064     (133,801     (20,751

Research and development

     (34,031     (41,569     (41,857     (6,491

Changes in the fair value of contingent purchase consideration payable

     (20,946     (5,060     (1,481     (230
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     (274,585     (314,490     (254,454     (39,463
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (44,240     (95,321     (85,474     (13,256

Interest income

     13,830        5,692        8,882        1,377   

Interest expense

     (71,867     (60,963     (55,692     (8,637

Gain from equity method investment

     11,295        40,231        1,201        186   

Other income

     1,660        20,115        1,106        172   

Other expense

     (951     (1,848     (1,104     (171

Foreign exchange gain (loss)

     10,167        7,248        (5,243     (813
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (80,106     (84,846     (136,324     (21,142

Income tax expense

     (8,563     (28,044     (14,994     (2,325
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (88,669     (112,890     (151,318     (23,467

Net (income) loss attributable to noncontrolling interest

     (8,058     (11,194     8,518        1,321   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to ordinary shareholders

     (96,727     (124,084     (142,800     (22,146
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss per share

        

Basic

     (0.23     (0.24     (0.28     (0.04

Diluted

     (0.23     (0.24     (0.28     (0.04

Shares used in loss per share computation

        

Basic*

     432,372,059        523,366,544        525,041,586        525,041,586   

Diluted*

     432,372,059        523,366,544        525,041,586        525,041,586   

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

        

Basic

     (1.38     (1.44     (1.68     (0.26

Diluted

     (1.38     (1.44     (1.68     (0.26

 

* Shares used in loss 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  
     March 31, 2015     December 31, 2015     March 31, 2016  
     RMB     RMB     RMB     US$  

Gross profit

     230,345        219,169        168,980        26,207   

Plus: share-based compensation expense

     2,212        6,582        3,925        609   

Plus: amortization of intangible assets derived from acquisitions

     40,169        38,583        38,197        5,924   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted gross profit

     272,726        264,334        211,102        32,740   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted gross margin

     31.7     26.9     24.5     24.5

Operating expenses

     (274,585     (314,490     (254,454     (39,463

Plus: share-based compensation expense

     44,244        33,537        33,468        5,190   

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

     20,946        5,060        1,481        230   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating expenses

     (209,395     (275,893     (219,505     (34,043
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (88,669     (112,890     (151,318     (23,467

Plus: share-based compensation expense

     46,456        40,119        37,393        5,799   

Plus: amortization of intangible assets derived from acquisitions

     40,169        38,583        38,197        5,924   

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

     20,946        5,060        1,976        306   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net profit (loss)

     18,902        (29,128     (73,752     (11,438
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net margin

     2.2     -3.0     -8.6     -8.6

Net loss

     (88,669     (112,890     (151,318     (23,467

Minus: Provision for income taxes

     (8,563     (28,044     (14,994     (2,325

Minus: Interest income

     13,830        5,692        8,882        1,377   

Minus: Interest expenses

     (71,867     (60,963     (55,692     (8,637

Minus: Exchange gain (loss)

     10,167        7,248        (5,243     (813

Minus: Gain from equity method investment

     11,295        40,231        1,201        186   

Minus: Other income

     1,660        20,115        1,106        172   

Minus: Other expenses

     (951     (1,848     (1,104     (171

Plus: depreciation

     93,878        105,355        108,940        16,895   

Plus: amortization

     49,876        46,917        46,222        7,168   

Plus: share-based compensation expense

     46,456        40,119        37,393        5,799   

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

     20,946        5,060        1,481        230   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     166,916        102,130        108,562        16,836   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     19.4     10.4     12.6     12.6

Adjusted net profit (loss)

     18,902        (29,128     (73,752     (11,438

Less: Net (profit) loss attributable to noncontrolling interest

     (8,058     (11,194     8,518        1,321   

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

     10,844        (40,322     (65,234     (10,117

Adjusted earnings (loss) per share

        

Basic

     0.02        (0.08     (0.14     (0.02

Diluted

     0.02        (0.08     (0.14     (0.02

Shares used in adjusted earnings (loss) per share computation:

        

Basic*

     432,372,059        523,366,544        525,041,586        525,041,586   

Diluted*

     444,663,246        523,366,544        525,041,586        525,041,586   

Adjusted earnings (loss) per ADS (6 ordinary shares equal to 1 ADS)

        

Basic

     0.12        (0.48     (0.84     (0.13

Diluted

     0.12        (0.48     (0.84     (0.13

 

* Shares used in adjusted earnings (loss)/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  
     December 31, 2015     March 31, 2016  
    

RMB

(Unaudited)

    RMB
(Unaudited)
    US$
(Unaudited)
 

CASH FLOWS FROM OPERATING ACTIVITIES

      

Net loss

     (112,890     (151,318     (23,467

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

      

Foreign exchange (gain) loss

     (7,248     5,243        813   

Changes in the fair value of contingent purchase consideration payable

     5,060        1,481        230   

Depreciation of property and equipment

     105,355        108,940        16,895   

Amortization of intangible assets

     46,336        45,760        7,097   

Gain on disposal of property and equipment

     (222     —          —     

Provision for doubtful accounts and other receivables

     21,672        26        4   

Share-based compensation expense

     52,430        37,393        5,799   

Deferred income taxes expense (benefit)

     9,521        (896     (139

Gain from equity method investment

     (40,231     (1,201     (186

Changes in operating assets and liabilities

      

Restricted cash

     (42,558     17,463        2,708   

Inventories

     (4,733     1,913        297   

Accounts and notes receivable

     67,850        (68,477     (10,620

Unrecognized tax expense

     1,993        915        142   

Prepaid expenses and other current assets

     2,371        (105,642     (16,384

Amounts due from related parties

     (15,475     16,226        2,516   

Accounts and notes payable

     35,394        64,183        9,954   

Accrued expenses and other payables

     39,228        (3,812     (591

Deferred revenue

     7,449        (895     (139

Advances from customers

     8,562        8,476        1,315   

Income taxes payable

     (6,861     8,427        1,307   

Amounts due to related parties

     (324     (1,080     (168

Deferred government grants

     (1,389     (1,611     (250
  

 

 

   

 

 

   

 

 

 

Net cash generated from (used in) operating activities

     171,290        (18,486     (2,867
  

 

 

   

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

      

Purchases of property and equipment

     (297,136     (140,963     (21,860

Purchases of intangible assets

     (2,567     (4,988     (774

Proceeds from disposal of property and equipment

     6,401        —          —     

Receipt of loans from third parties

     —          3,279        509   

Advances of loan to third parties

     (62,578     —          —     

Payments for short-term investments

     (34,634     (11,280     (1,749

Proceeds received from maturity of short-term investments

     412,249        102,300        15,865   
  

 

 

   

 

 

   

 

 

 

Net cash generated from (used in) investing activities

     21,735        (51,652     (8,009
  

 

 

   

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

      

Restricted cash

     (10,957     —          —     

Proceeds from exercise of stock options

     1,545        1,956        303   

Proceeds from long-term bank borrowings

     11,290        51,500        7,987   

Proceeds from short-term bank borrowings

     81,000        65,000        10,081   

Repayments of short-term bank borrowings

     (66,425     (100,000     (15,509

Repayments of long-term bank borrowings

     —          (2,944     (457

Payments for acquisitions

     (14,767     —          —     

Repayments of 2016 Bonds

     —          (264,250     (40,982

Consideration paid to selling shareholders

     —          (2,475     (384

Payments for capital leases

     (24,001     (34,594     (5,365

Rental prepayments and deposits for sales and leaseback transactions

     (13,000     —          —     

Proceeds from sales and leaseback transactions

     130,000        —          —     

Repayments for Mandatorily redeemable noncontrolling interests

     —          (100,000     (15,509
  

 

 

   

 

 

   

 

 

 

Net cash generated from (used in) financing activities

     94,685        (385,807     (59,835
  

 

 

   

 

 

   

 

 

 

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

     (2,121     (5,294     (821

Net increase (decrease) in cash and cash equivalents

     285,589        (461,239     (71,532

Cash and cash equivalents at beginning of period

     1,399,465        1,685,054        261,330   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

     1,685,054        1,223,815        189,798   
  

 

 

   

 

 

   

 

 

 


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