21Vianet Group, Inc. Reports Third Quarter 2011 Financial Results
3Q11 Net Revenues Up 114.8% YOY to
3Q11 Adjusted EBITDA Up 205.4% YOY to
3Q11 Adjusted Net Profit Up 439.2% YOY to
Live Conference Call to be Held at
Third Quarter 2011 Financial Highlights
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Net revenues increased by 114.8% to
RMB261.6 million (US$41.0million ) fromRMB121.8 million in the prior year comparative period. -
Adjusted EBITDA1 increased by 205.4% to
RMB53.7million (US$8.4million ) fromRMB17.6 million in the prior year comparative period. - Adjusted EBITDA margin2 increased to 20.5% from 14.4% in the prior year comparative period.
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Adjusted net profit3 increased by 439.2% to
RMB61.6million (US$9.7 million ) fromRMB11.4 million in the prior year comparative period.
Mr.
We continued to accelerate our expansion plans to accommodate customers' growth needs by executing on the build-out of additional data centers as well as broadband network expansion. The rollout of our self-build data centers remains on track with 653 new cabinets added in the third quarter bringing the total of self-built datacenter cabinets to 3,831, or 52.5% of our 7,335 cabinets in total. Not only have we expanded our overall capacity, but we have also been shifting our cabinet mix towards a higher percentage of self-built data centers which have relatively higher-margins than in partnered data centers."
Mr.
1Adjusted EBITDA is non-GAAP financial measure, which is defined as EBITDA excluding share-based compensation expenses and changes in the fair value of contingent purchase consideration payable. |
2Adjusted EBITDA margin is non-GAAP financial measure, which is defined as adjusted EBITDA as a percentage of total net revenues. |
3Adjusted net profit/loss is non-GAAP financial measure, which is defined as net profit/loss from continuing operations excluding share-based compensation expenses, amortization expenses of intangible assets derived from acquisitions, changes in the fair value of contingent purchase consideration payable and related deferred tax assets, and reversal of unrecognized tax benefits and outside tax basis difference. |
Third Quarter 2011 Financial Results
REVENUES: Net revenues for the third quarter of 2011 increased by 114.8% to
Net revenues from hosting and related services increased by 78.5% to
Net revenues from managed network services increased by 228.4% to
GROSS PROFIT: For the third quarter of 2011, gross profit increased by 146.7% to
Adjusted gross profit, which excludes share-based compensation expense of
Adjusted gross margin increased to 30.1%, compared to 27.6% in the prior year comparative period. The increase in adjusted gross margin was primarily due to the continued revenue mix shift towards a higher percentage of self-built data centers, which carry slightly higher gross margins relative to partnered data centers.
OPERATING EXPENSES: Total operating expenses was
Sales and marketing expenses increased slightly to
General and administrative expenses decreased to
Research and development expenses increased to
Change in the fair value of contingent purchase consideration payable was
Adjusted operating expenses, which excludes share-based compensation expense and the changes in the fair value of contingent purchase consideration payable, increased to
ADJUSTED EBITDA: Adjusted EBITDA for the third quarter of 2011 increased by 205.4% to
NET PROFIT/LOSS: Net profit for the third quarter of 2011 was
Adjusted net profit for the third quarter of 2011 increased by 439.2% to
EARNING/LOSS PER SHARE: Diluted earnings per ordinary share for the third quarter of 2011 were
As of
Adjusted earnings per share is calculated using adjusted net profit which excluded share-based compensation expense, amortization of intangible assets derived from acquisitions, change in the fair value of contingent purchase consideration payable, reversal of unrecognized tax benefit and related deferred tax assets and outside tax basis difference as discussed above to divide the weighted average shares number.
BALANCE SHEET: As of
On
4Due to the Company's IPO on |
Third Quarter 2011 Operational Highlights
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Monthly Recurring Revenues (MRR) per cabinet increased to
RMB9,400 fromRMB8,500 in the second quarter of 2011. -
Total cabinets under management increased to 7,335 as of
September 30, 2011 from 6,682 as ofJune 30, 2011 , with 3,831 cabinets in the Company's self-built data centers and 3,504 cabinets in its partnered data centers. - Utilization rate increased to 81.5% in the third quarter 2011 from 80.7% in the second quarter of 2011.
- Churn rate was down to 0.80% in the third quarter of 2011, compared to 0.83% in the second quarter of 2011. Top 20 customers' churn rate remained at 0%.
- The largest customer represented 3.9% of total net revenues.
Nine Months Ended
For the nine months ended
In October of 2011, as part of the Company's expansion strategy to further increase its network service capacity, the Company acquired 100% of
Financial Outlook
For the fourth quarter of 2011, the Company expects net revenues to be in the range of
Conference Call
The Company will hold a conference call on
United States Toll Free: | + 1-646-254-3515 |
International: | + 1-855-500-8701 |
China Domestic: | 400-1200654 |
Hong Kong: | + 852-3051-2745 |
Conference ID: | # 19164398 |
The replay will be accessible through
United States Toll Free: | + 1-866-214-5335 |
International: | + 1-718-354-1232 |
Conference ID: | # 19164398 |
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
The non-GAAP financial measures is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the Company's current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for or superior to U.S. GAAP results. In addition, the Company's calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.
Exchange Rate
This press release contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars, in this press release, were made at a rate of
About 21Vianet
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 of 2011 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
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CONSOLIDATED BALANCE SHEETS | |||
(Amount in thousands of Renminbi ("RMB") and US dollars ("US$")) | |||
As of |
As of |
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RMB | RMB | US$ | |
(Audited) | (Unaudited) | (Unaudited) | |
Assets | |||
Current assets: | |||
Cash and cash equivalents | 83,256 | 1,556,952 | 244,113 |
Restricted cash | 4,441 | 4,578 | 718 |
Accounts receivable, net | 76,373 | 139,586 | 21,886 |
Prepaid expenses and other current assets | 14,369 | 48,574 | 7,618 |
Deferred tax assets | 2,055 | 2,757 | 432 |
Amount due from related parties | 13,463 | 3,536 | 554 |
Total current assets | 193,957 | 1,755,983 | 275,321 |
Non-current assets: | |||
Property and equipment, net | 197,015 | 345,508 | 54,172 |
Intangible assets, net | 157,086 | 135,110 | 21,184 |
Deferred tax assets | 7,358 | 14,350 | 2,250 |
Goodwill | 170,171 | 170,171 | 26,681 |
Investment | -- | 8,200 | 1,286 |
Total non-current assets | 531,630 | 673,339 | 105,573 |
Total assets | 725,587 | 2,429,322 | 380,894 |
Liabilities and Shareholders' (Deficit) Equity | |||
Current liabilities: | |||
Short term bank borrowings | 35,000 | 85,000 | 13,327 |
Accounts payable | 49,792 | 58,710 | 9,205 |
Notes payable | 4,441 | 4,578 | 718 |
Accrued expenses and other payables | 30,962 | 82,341 | 12,910 |
Advances from customers | 17,316 | 19,842 | 3,111 |
Income tax payable | 3,545 | 2,580 | 405 |
Amounts due to related parties | 53,679 | 76,138 | 11,938 |
Current portion of capital lease obligations | 15,824 | 16,958 | 2,659 |
Total current liabilities | 210,559 | 346,147 | 54,273 |
Non-current liabilities: | |||
Amounts due to related parties | 126,331 | 133,849 | 20,986 |
Non-current portion of capital lease obligations | 58,190 | 45,601 | 7,150 |
Unrecognized tax benefits | 5,575 | 19,383 | 3,039 |
Deferred tax liabilities | 37,949 | 32,839 | 5,149 |
Deferred government grant | 5,400 | 6,036 | 946 |
Total non-current liabilities | 233,445 | 237,708 | 37,270 |
Commitments and contingencies | |||
Mezzanine equity | 991,110 | -- | -- |
Shareholders' (deficit) equity | |||
Treasury stock | -- | (28,283) | (4,434) |
Ordinary shares | 7 | 23 | 4 |
Additional paid-in capital | 512,225 | 3,183,359 | 499,116 |
Accumulated other comprehensive income (loss) | 1,474 | (43,625) | (6,840) |
Statutory reserves | 14,143 | 14,143 | 2,217 |
Accumulated deficit | (1,357,747) | (1,419,430) | (222,550) |
Total |
(829,898) | 1,706,187 | 267,513 |
Non-controlling interest | 120,371 | 139,280 | 21,838 |
Total shareholders' (deficit) equity | (709,527) | 1,845,467 | 289,351 |
Total liabilities, mezzanine equity and shareholders' (deficit) equity | 725,587 | 2,429,322 | 380,894 |
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CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
(Amount in thousands of Renminbi ("RMB") and US dollars ("US$") except for number of shares and per share data) | ||||||||||
Three months ended | Nine months ended | |||||||||
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RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||
Net revenues | ||||||||||
Hosting and related services | 92,312 | 145,663 | 164,814 | 25,841 | 263,471 | 439,365 | 68,888 | |||
Managed network services | 29,489 | 84,748 | 96,831 | 15,182 | 64,420 | 263,287 | 41,280 | |||
Total net revenues | 121,801 | 230,411 | 261,645 | 41,023 | 327,891 | 702,652 | 110,168 | |||
Cost of revenues | (92,785) | (168,557) | (190,071) | (29,801) | (247,764) | (514,149) | (80,613) | |||
Gross profit | 29,016 | 61,854 | 71,574 | 11,222 | 80,127 | 188,503 | 29,555 | |||
Operating expenses | ||||||||||
Sales and marketing | (20,550) | (18,537) | (20,894) | (3,276) | (34,951) | (55,427) | (8,690) | |||
General and administrative | (51,589) | (17,886) | (24,643) | (3,864) | (65,275) | (58,508) | (9,173) | |||
Research and development | (8,666) | (8,086) | (9,396) | (1,473) | (14,091) | (24,637) | (3,863) | |||
Changes in the fair value of contingent purchase consideration payable | -- | (48,069) | 54,895 | 8,607 | -- | (43,206) | (6,774) | |||
Total operating expenses | (80,805) | (92,578) | (38) | (6) | (114,317) | (181,778) | (28,500) | |||
Operating profit (loss) | (51,789) | (30,724) | 71,536 | 11,216 | (34,190) | 6,725 | 1,055 | |||
Interest income | 101 | 3,368 | 7,051 | 1,106 | 258 | 10,591 | 1,661 | |||
Interest expense | (878) | (1,469) | (1,241) | (195) | (2,016) | (3,693) | (579) | |||
Other income | 94 | 244 | 395 | 62 | 513 | 1,341 | 210 | |||
Other expense | (36) | (101) | (65) | (10) | (539) | (276) | (43) | |||
Foreign exchange gain | 1,612 | 1,118 | 24,195 | 3,794 | 2,280 | 26,013 | 4,079 | |||
Profit (loss) from continuing operations before income taxes | (50,896) | (27,564) | 101,871 | 15,973 | (33,694) | 40,701 | 6,383 | |||
Income tax (expense) benefit | 13,279 | 4,812 | (14,186) | (2,224) | (2,175) | (6,305) | (989) | |||
Net profit (loss) from continuing operations | (37,617) | (22,752) | 87,685 | 13,749 | (35,869) | 34,396 | 5,394 | |||
Loss from discontinued operations | -- | -- | -- | -- | (12,952) | -- | -- | |||
Net profit (loss) from continuing operations | (37,617) | (22,752) | 87,685 | 13,749 | (48,821) | 34,396 | 5,394 | |||
Net income attributable to non-controlling interest | (511) | (6,800) | (6,141) | (963) | (1,431) | (18,909) | (2,965) | |||
Net profit (loss) attributable to the Company's ordinary shareholders | (38,128) | (29,552) | 81,544 | 12,786 | (50,252) | 15,487 | 2,429 | |||
Earnings (loss) per share | ||||||||||
Basic | (0.53) | (0.11) | 0.24 | 0.04 | (0.70) | 0.06 | 0.01 | |||
Diluted | (0.53) | (0.11) | 0.23 | 0.04 | (0.70) | 0.05 | 0.01 | |||
Shares used in earnings (loss) per share computation | ||||||||||
Basic* | 71,526,320 | 278,713,982 | 338,719,421 | 338,719,421 | 71,526,320 | 239,527,651 | 239,527,651 | |||
Diluted* | 71,526,320 | 278,713,982 | 354,085,623 | 354,085,623 | 71,526,320 | 311,198,141 | 311,198,141 | |||
Earnings (loss) per ADS (6 ordinary shares equal to 1 ADS) | ||||||||||
EPS - Basic | (3.18) | (0.66) | 1.44 | 0.23 | (4.20) | 0.36 | 0.06 | |||
EPS - Diluted | (3.18) | (0.66) | 1.38 | 0.22 | (4.20) | 0.30 | 0.05 | |||
* Shares used in earnings/ADS per share computation were computed under weighted average method. |
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RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS | |||||||||||
(Amount in thousands of Renminbi ("RMB") and US dollars ("US$") except for number of shares and per share data) | |||||||||||
Three months ended | Nine months ended | ||||||||||
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RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||
Gross profit | 29,016 | 61,854 | 71,574 | 11,222 | 80,127 | 188,503 | 29,555 | ||||
Plus: share-based compensation expense | 4,158 | 537 | 356 | 56 | 4,158 | 1,579 | 248 | ||||
Plus: amortization of intangible assets derived from acquisitions | 501 | 6,842 | 6,741 | 1,057 | 1,539 | 21,044 | 3,299 | ||||
Adjusted gross profit | 33,675 | 69,233 | 78,671 | 12,335 | 85,824 | 211,126 | 33,102 | ||||
Adjusted gross margin | 27.65% | 30.05% | 30.07% | 30.07% | 26.17% | 30.05% | 30.05% | ||||
Operating expenses | (80,805) | (92,578) | (38) | (6) | (114,317) | (181,778) | (28,501) | ||||
Plus: share-based compensation expense | 59,691 | 8,516 | 13,525 | 2,120 | 59,691 | 29,927 | 4,692 | ||||
Plus: changes in the fair value of contingent purchase consideration payable | -- | 48,069 | (54,895) | (8,607) | -- | 43,206 | 6,774 | ||||
Adjusted operating expenses | (21,114) | (35,993) | (41,408) | (6,493) | (54,626) | (108,645) | (17,035) | ||||
Net profit (loss) from continuing operations | (37,617) | (22,752) | 87,685 | 13,748 | (35,869) | 34,396 | 5,394 | ||||
Plus: share-based compensation expense | 63,849 | 9,053 | 13,881 | 2,176 | 63,849 | 31,506 | 4,940 | ||||
Plus: amortization of intangible assets derived from acquisitions | 501 | 6,842 | 6,741 | 1,057 | 1,539 | 21,044 | 3,299 | ||||
Plus: changes in the fair value of contingent purchase consideration payable and related deferred tax asset | -- | 40,859 | (46,661) | (7,316) | -- | 36,725 | 5,758 | ||||
Plus: reversal of unrecognized tax benefits and outside tax basis difference | (15,300) | -- | -- | -- | (431) | -- | -- | ||||
Adjusted net profit from continuing operations | 11,433 | 34,002 | 61,646 | 9,665 | 29,088 | 123,671 | 19,391 | ||||
Adjusted net margin | 9.4% | 14.8% | 23.6% | 23.6% | 8.9% | 17.6% | 17.6% | ||||
Operating profit (loss) | (51,789) | (30,724) | 71,536 | 11,216 | (34,190) | 6,725 | 1,055 | ||||
Plus: depreciation | 4,343 | 13,520 | 16,022 | 2,512 | 12,910 | 40,101 | 6,287 | ||||
Plus: amortization | 1,194 | 7,241 | 7,198 | 1,129 | 3,443 | 22,372 | 3,508 | ||||
Plus: share-based compensation expense | 63,849 | 9,053 | 13,881 | 2,176 | 63,849 | 31,506 | 4,940 | ||||
Plus: changes in the fair value of contingent purchase consideration payable | -- | 48,069 | (54,895) | (8,607) | -- | 43,206 | 6,774 | ||||
Adjusted EBITDA | 17,597 | 47,159 | 53,742 | 8,426 | 46,012 | 143,910 | 22,564 | ||||
Adjusted EBITDA margin | 14.4% | 20.5% | 20.5% | 20.5% | 14.0% | 20.5% | 20.5% | ||||
Adjusted net profit from continuing operations | 11,433 | 34,002 | 61,646 | 9,665 | 29,088 | 123,671 | 19,391 | ||||
Less: Net income attributable to non-controlling interest | (511) | (6,800) | (6,141) | (963) | (1,431) | (18,909) | (2,965) | ||||
Adjusted net profit attributable to the Company's ordinary shareholders | 10,922 | 27,202 | 55,505 | 8,702 | 27,657 | 104,762 | 16,426 | ||||
Adjusted earnings per share | |||||||||||
Basic | 0.15 | 0.10 | 0.16 | 0.03 | 0.39 | 0.44 | 0.07 | ||||
Diluted | 0.06 | 0.09 | 0.16 | 0.03 | 0.15 | 0.35 | 0.06 | ||||
Shares used in adjusted earnings per share computation: | |||||||||||
Basic* | 71,526,320 | 278,713,982 | 338,719,421 | 338,719,421 | 71,526,320 | 239,527,651 | 239,527,651 | ||||
Diluted* | 182,492,500 | 297,880,448 | 338,719,421 | 338,719,421 | 182,492,500 | 297,004,465 | 297,004,465 | ||||
Earnings per ADS (6 ordinary shares equal to 1 ADS) | |||||||||||
EPS - Basic | 0.90 | 0.60 | 0.96 | 0.15 | 2.34 | 2.64 | 0.41 | ||||
EPS - Diluted | 0.36 | 0.54 | 0.96 | 0.15 | 0.90 | 2.10 | 0.33 | ||||
* Shares used in adjusted earnings/ADS per share computation were computed under weighted average method. |
CONTACT: Investor Relations Contact:Source: 21VianetICR, Inc. Jeremy Peruski +1 (646) 405-4922 IR@21Vianet.com
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