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 2018
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 ☒ 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.
| 21 Vianet Group, Inc. | ||
| By: | /s/ Sharon Xiao Liu | |
| Name: | Sharon Xiao Liu | |
| Title: | Chief Financial Officer | |
Date: May 18, 2018
Exhibit Index
Exhibit 99.1 — Press Release
Exhibit 99.1
21Vianet Group, Inc. Reports Unaudited First Quarter
2018 Financial Results
Adjusted EBITDA up 95.5% YoY to RMB196.0 million
Adjusted EBITDA margin expanded to 24.5% from 11.6% in prior year period
BEIJING, May 17, 2018 (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 ended March 31, 2018. The Company will hold a conference call at 8:00 pm on Thursday, May 17, 2018, U.S. Eastern Time to discuss the financial results. Dial-in details are provided at the end of this release.
First Quarter 2018 Financial Highlights (including hosting and related services & MNS1 business)
| • | Revenues from hosting and related services increased by 13.3% year over year to RMB800.8 million (US$127.7 million). |
| • | Adjusted cash gross profit increased by 7.6% year over year to RMB347.5 million (US$55.4 million). Adjusted cash gross margin expanded to 43.4% from 37.5% in the same period of 2017. |
| • | Operating profit improved to RMB56.4 million from an operating loss of RMB72.1 million in the same period of 2017. |
| • | Adjusted EBITDA increased by 95.5% year over year to RMB196.0 million (US$31.2 million). Adjusted EBITDA margin expanded to 24.5% from 11.6% in the same period of 2017. |
| • | Net cash generated from operating activities was RMB95.9 million (US$15.3 million) in the first quarter of 2018 compared to RMB46.4 million in the same period of 2017. |
The financial numbers of the same period of 2017 include hosting and related services and MNS business. The year-over-year increase was partially driven by the disposal of the MNS business in September 2017.
First Quarter 2018 Operational Highlights
| • | Hosting MRR2 per cabinet increased to RMB7,905 in the first quarter of 2018 compared to RMB7,598 in the first quarter of 2017. |
| • | Total cabinets under management decreased slightly to 29,035 as of March 31, 2018 from 29,080 as of December 31, 2017. As of March 31, 2018, the Company had 23,839 cabinets in its self-built data centers and 5,196 cabinets in its partnered data centers. |
| • | Utilization rate was 70.0% in the first quarter of 2018 compared to 75.7 % in the fourth quarter of 2017 due to the incremental cabinet capacity the Company delivered at the end of 2017. |
Mr. Alvin Wang, Chief Executive Officer and President of the Company, stated, “We entered 2018 with accelerated financial and operating performance in the first quarter. We are pleased to see continued improvement on our results following our successful business restructuring in 2017. During the quarter, the demand for computing and storage capacity from both large and small corporations in China continued to grow. To capitalize on the market opportunities, we further expanded our data center network while maintaining our industry-leading service quality. This not only made us the clear choice of data center providers for our clients, it also made us the ideal partner for world-class technology leaders such as Microsoft Corp. With our long-term partnership with Microsoft, we will continue to improve our capabilities and capacities to deliver localized and customized cloud solutions with optimal user experiences to Chinese customers in the future.”
| 1 | MNS: Refers to managed network services. |
| 2 | Hosting MRR: Refers to Monthly Recurring Revenues for the hosting business. |
Ms. Sharon Liu, Chief Financial Officer of the Company, commented, “We are delighted to sustain our strong momentum and deliver another quarter of robust financial growth. In the first quarter of 2018, our revenue from the hosting and related services business increased by 13.3% year over year to RMB800.8 million, exceeding the high end of our previous guidance. More importantly, as a result of our improved operating efficiency, we recorded adjusted EBITDA of RMB196.0 million in the first quarter of 2018, representing a year over year increase of 95.5%. As our restructuring strategy to fully focus on our core hosting and related services business continues to prove successful, we expect our growth momentum to carry into the quarters ahead.”
First Quarter 2018 Financial Results
To fully reflect the Company’s performance, all analysis between “REVENUES” and “ADJUSTED EBITDA” presents only the results of the hosting and related service business. The MNS business, which was disposed of in the third quarter of 2017, is excluded.
REVENUES: Net revenues increased by 13.3% to RMB800.8 million (US$127.7 million) in the first quarter of 2018 from RMB706.7 million in the same period of 2017 and increased by 4.6% from RMB765.8 million in the fourth quarter of 2017. The increase was primarily due to increasing demand from the Company’s new and existing customers.
GROSS PROFIT: Gross profit increased by 10.5% to RMB227.9 million (US$36.3 million) in the first quarter of 2018 from RMB206.3 million in the same period of 2017 and increased by 13.9% from RMB200.2 million in the fourth quarter of 2017. Gross margin decreased slightly to 28.5% in the first quarter of 2018 from 29.2% in the same period of 2017. The decrease was mainly due to an increase in depreciation.
Adjusted cash gross profit, which excludes depreciation, amortization, and share-based compensation expenses, increased by 18.1% to RMB347.5 million (US$55.4 million) in the first quarter of 2018 from RMB 294.3 million in the same period of 2017 and increased by 8.6% from RMB320.1 million in the fourth quarter of 2017. Adjusted cash gross margin expanded to 43.4% in the first quarter of 2018 from 41.6% in the same period of 2017 and 41.8% in the previous quarter. The increase was a result of cabinet resource management. Since the first quarter of 2017, the Company eliminated approximately 1,000 lower-margin cabinets in partnered data centers, bringing the total number of partnered cabinets to 5,196 in the first quarter of 2018 from 6,119 in the same period of 2017.
OPERATING EXPENSES: Total operating expenses increased by 11.3% to RMB171.5 million (US$27.3 million) in the first quarter of 2018 from RMB154.0 million in the same period of 2017 but decreased by 10.9% compared to the fourth quarter of 2017. The year-over-year fluctuation was mainly caused by the increase of office related expenses and personnel cost. The quarter-over-quarter decrease was mainly caused by expenses incurred and recorded for the disposal of the MNS business in the fourth quarter of 2017.
Adjusted operating expenses, which exclude share-based compensation expenses and changes in the fair value of contingent purchase consideration payable, were RMB167.2 million (US$26.7 million) in the first quarter of 2018 compared to RMB154.1 million in the same period of 2017 and RMB173.2 million in the fourth quarter of 2017. As a percentage of net revenues, adjusted operating expenses decreased to 20.9% in the first quarter of 2018 from 21.8% in the same period of 2017 and 22.6% in the previous quarter. The decrease was primarily due to expense control measures implemented.
Sales and marketing expenses increased by 21.2% to RMB41.2 million (US$6.6 million) in the first quarter of 2018 from RMB34.0 million in the same period of 2017 and decreased from RMB42.7 million in the fourth quarter of 2017. The year-over-year increase was mainly driven by sales expansion.
Research and development expenses were RMB22.0 million (US$3.5 million) in the first quarter of 2018 compared to RMB22.2 million in the same period of 2017 and RMB29.3 million in the previous quarter. The quarter-over-quarter decrease was mainly due to a drop in headcount and the enhancement of working efficiency.
General and administrative expenses increased by 14.4% to RMB112.3 million (US$17.9 million) in the first quarter of 2018 from RMB98.2 million in the same period of 2017 and decreased from RMB115.4 million in the previous quarter. The year-over-year increase was primarily due to the expansion of the business and the increase of office related expenses.
ADJUSTED EBITDA: Adjusted EBITDA for the first quarter of 2018 increased by 28.3% to RMB196.0 million (US$31.2 million) from RMB152.7 million in the same period of 2017 and increased by 14.6% compared to the previous quarter. Adjusted EBITDA for the first quarter of 2018 excludes share-based compensation expenses of RMB 6.6 million (US$1.0 million) and changes in the fair value of contingent purchase consideration payable, which was a gain of RMB2.3 million (US$0.4 million). Adjusted EBITDA margin expanded to 24.5% in the first quarter of 2018 from 21.6% in the same period of 2017 and 22.3% in the fourth quarter of 2017.
NET PROFIT/LOSS: Net profit for the first quarter of 2018 was RMB34.7 million (US$5.5 million) compared to a net loss of RMB116.8 million in the same period of 2017. The improvement in net profit was mainly driven by the strong performance of the Company’s hosting and related services and its improved operating efficiency following the disposal of the MNS business in September 2017.
PROFIT/LOSS PER SHARE: Diluted profit per share was RMB0.05 (US$0.01) in the first quarter of 2018, which represents the equivalent of RMB0.30 (US$0.06) per American Depositary Share (“ADS”). Each ADS represents six ordinary shares. Diluted profit per share is calculated using net profit divided by the weighted average number of shares.
As of March 31, 2018, the Company’s cash and cash equivalents and short-term investments were RMB2.38 billion (US$379.9 million).
Net cash generated from operating activities was RMB95.9 million (US$15.3 million) in the first quarter of 2018.
Recent Developments
On March 14, 2018, the Company announced that it has extended its long-term partnership with Microsoft Corp. to provide world-class public cloud services to Chinese customers.
Financial Outlook
The following forecast reflects the Company’s current and preliminary view on the market and its operational conditions, which is subject to change.
For the second quarter of 2018, the Company expects net revenues to be in the range of RMB810 million to RMB830 million compared to hosting and related service revenues of RMB743 million in the prior year period. Adjusted EBITDA is expected to be in the range of RMB200 million to RMB220 million compared to RMB171 million in the prior year period.
Conference Call
The Company will hold a conference call at 8:00 pm on Thursday, May 17, 2018 U.S. Eastern Time, or 8:00 am on Friday, May 18, 2018 Beijing Time, to discuss the financial results.
Participants may access the call by dialing the following numbers:
| United States Toll Free: | +1-855-500-8701 | |||
| International: | +65-6713-5440 | |||
| China Domestic: | 400-120-0654 | |||
| Hong Kong: | +852-3018-6776 | |||
| Conference ID: | 9383759 | |||
| The replay will be accessible through May 25, 2018 by dialing the following numbers: | ||||
| United States Toll Free: |
+1-855-452-5696 | |||
| International: |
+61-2-9003-4211 | |||
| Conference ID: |
9383759 | |||
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 cash gross profit, adjusted cash gross margin, adjusted operating expenses, adjusted EBITDA, adjusted EBITDA margin, 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 RMB6.2726 to US$1.00, the noon buying rate in effect on March 31, 2018 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, cloud 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. 21Vianet operates in more than 30 cities throughout China, servicing a diversified and loyal base of nearly 5,000 hosting and related 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.
Rene Jiang
+86 10 8456 2121
IR@21Vianet.com
Julia Jiang
+86 10 8456 2121
IR@21Vianet.com
ICR, Inc.
Jack Wang
+1 (646) 405-4922
IR@21Vianet.com
21VIANET GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))
| As of | As of | |||||||||||
| December 31, 2017 | March 31, 2018 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| (Audited) | (Unaudited) | (Unaudited) | ||||||||||
| Assets |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
1,949,631 | 1,850,440 | 295,004 | |||||||||
| Restricted cash |
242,494 | 254,576 | 40,585 | |||||||||
| Accounts and notes receivable, net |
455,811 | 506,475 | 80,744 | |||||||||
| Short-term investments |
548,890 | 532,689 | 84,923 | |||||||||
| Prepaid expenses and other current assets |
934,460 | 994,780 | 158,595 | |||||||||
| Amount due from related parties |
114,256 | 93,294 | 14,873 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total current assets |
4,245,542 | 4,232,254 | 674,724 | |||||||||
|
|
|
|
|
|
|
|||||||
| Non-current assets: |
||||||||||||
| Property and equipment, net |
3,319,424 | 3,282,857 | 523,365 | |||||||||
| Intangible assets, net |
401,115 | 382,416 | 60,966 | |||||||||
| Land use rights, net |
163,671 | 162,713 | 25,940 | |||||||||
| Goodwill |
989,530 | 989,530 | 157,754 | |||||||||
| Long-term investments |
510,926 | 504,679 | 80,458 | |||||||||
| Amount due from related parties |
20,210 | 20,385 | 3,250 | |||||||||
| Restricted cash |
3,344 | 3,221 | 514 | |||||||||
| Deferred tax assets |
172,818 | 157,693 | 25,140 | |||||||||
| Other non-current assets |
81,581 | 142,036 | 22,644 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total non-current assets |
5,662,619 | 5,645,530 | 900,031 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
9,908,161 | 9,877,784 | 1,574,755 | |||||||||
|
|
|
|
|
|
|
|||||||
| Liabilities and Shareholders’ Equity |
||||||||||||
| Current liabilities: |
||||||||||||
| Short-term bank borrowings |
50,000 | 69,999 | 11,159 | |||||||||
| Accounts and notes payable |
252,892 | 293,135 | 46,733 | |||||||||
| Accrued expenses and other payables |
657,133 | 593,652 | 94,642 | |||||||||
| Deferred revenue |
55,753 | 35,248 | 5,619 | |||||||||
| Advances from customers |
403,244 | 477,239 | 76,083 | |||||||||
| Income taxes payable |
13,309 | 28,456 | 4,537 | |||||||||
| Amounts due to related parties |
55,675 | 59,386 | 9,468 | |||||||||
| Current portion of long-term bank borrowings |
70,289 | 70,289 | 11,206 | |||||||||
| Current portion of capital lease obligations |
201,315 | 194,449 | 31,000 | |||||||||
| Current portion of deferred government grant |
4,574 | 4,574 | 729 | |||||||||
| Current portion of bonds payable |
11,139 | 10,939 | 1,744 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total current liabilities |
1,775,323 | 1,837,366 | 292,920 | |||||||||
|
|
|
|
|
|
|
|||||||
| Non-current liabilities: |
||||||||||||
| Long-term bank borrowings |
187,638 | 187,638 | 29,914 | |||||||||
| Unrecognized tax benefits |
16,511 | 16,701 | 2,663 | |||||||||
| Deferred tax liabilities |
190,873 | 188,539 | 30,058 | |||||||||
| Non-current portion of capital lease obligations |
600,882 | 611,232 | 97,445 | |||||||||
| Non-current portion of deferred government grant |
17,861 | 16,112 | 2,569 | |||||||||
| Bonds payable |
1,918,069 | 1,848,263 | 294,657 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total non-current liabilities |
2,931,834 | 2,868,485 | 457,306 | |||||||||
|
|
|
|
|
|
|
|||||||
| Shareholders’ equity |
||||||||||||
| Treasury stock |
(337,683 | ) | (337,683 | ) | (53,835 | ) | ||||||
| Ordinary shares |
46 | 46 | 7 | |||||||||
| Additional paid-in capital |
8,980,407 | 8,991,665 | 1,433,483 | |||||||||
| Accumulated other comprehensive loss |
(2,673 | ) | (77,733 | ) | (12,392 | ) | ||||||
| Statutory reserves |
38,736 | 38,969 | 6,213 | |||||||||
| Accumulated deficit |
(3,629,300 | ) | (3,596,693 | ) | (573,397 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total 21Vianet Group, Inc. shareholders’ equity |
5,049,533 | 5,018,571 | 800,079 | |||||||||
|
|
|
|
|
|
|
|||||||
| Noncontrolling interest |
151,471 | 153,362 | 24,450 | |||||||||
| Total shareholders’ equity |
5,201,004 | 5,171,933 | 824,529 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities and shareholders’ equity |
9,908,161 | 9,877,784 | 1,574,755 | |||||||||
|
|
|
|
|
|
|
|||||||
21VIANET GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for number of shares and per share data)
| Three months ended | ||||||||||||||||
| March 31, 2017 | December 31, 2017 | March 31, 2018 | ||||||||||||||
| RMB | RMB | RMB | US$ | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Net revenues |
||||||||||||||||
| Hosting and related services |
706,711 | 765,814 | 800,765 | 127,661 | ||||||||||||
| Managed network services |
155,466 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net revenues |
862,177 | 765,814 | 800,765 | 127,661 | ||||||||||||
| Cost of revenues |
(681,700 | ) | (565,645 | ) | (572,863 | ) | (91,328 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
180,477 | 200,169 | 227,902 | 36,333 | ||||||||||||
| Operating expenses |
||||||||||||||||
| Sales and marketing |
(65,832 | ) | (42,702 | ) | (41,232 | ) | (6,573 | ) | ||||||||
| Research and development |
(38,387 | ) | (29,340 | ) | (22,030 | ) | (3,512 | ) | ||||||||
| General and administrative |
(135,803 | ) | (115,351 | ) | (112,340 | ) | (17,910 | ) | ||||||||
| (Allowance) reversal for doubtful debt |
(15,465 | ) | (1,147 | ) | 1,855 | 296 | ||||||||||
| Changes in the fair value of contingent purchase consideration payable |
2,867 | (3,834 | ) | 2,284 | 364 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
(252,620 | ) | (192,374 | ) | (171,463 | ) | (27,335 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating (loss) profit |
(72,143 | ) | 7,795 | 56,439 | 8,998 | |||||||||||
| Interest income |
8,252 | 10,821 | 8,527 | 1,359 | ||||||||||||
| Interest expense |
(37,027 | ) | (50,836 | ) | (51,542 | ) | (8,217 | ) | ||||||||
| Impairment of long-term investment |
— | 139 | — | — | ||||||||||||
| Gain on disposal of subsidiaries |
— | 677,084 | — | — | ||||||||||||
| Other income |
4,826 | 3,260 | 22,161 | 3,533 | ||||||||||||
| Other expense |
(1,562 | ) | (232 | ) | (1,526 | ) | (243 | ) | ||||||||
| Foreign exchange (loss) gain |
(5,481 | ) | 4,328 | 44,841 | 7,149 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (Loss) gain before income taxes and gain (loss) from equity method investments |
(103,135 | ) | 652,359 | 78,900 | 12,579 | |||||||||||
| Income tax (expenses) benefits |
(16,127 | ) | 127,478 | (34,080 | ) | (5,433 | ) | |||||||||
| Gain (loss) from equity method investments |
2,425 | 17,732 | (10,089 | ) | (1,608 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net (loss) profit |
(116,837 | ) | 797,569 | 34,731 | 5,538 | |||||||||||
| Net loss (profit) attributable to noncontrolling interest |
17,043 | 1,073 | (1,891 | ) | (301 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net (loss) profit attributable to ordinary shareholders |
(99,794 | ) | 798,642 | 32,840 | 5,237 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (Loss) profit per share |
||||||||||||||||
| Basic |
(0.17 | ) | 1.19 | 0.05 | 0.01 | |||||||||||
| Diluted |
(0.17 | ) | 1.18 | 0.05 | 0.01 | |||||||||||
| Shares used in (loss) profit per share computation |
||||||||||||||||
| Basic* |
678,649,016 | 671,279,121 | 672,741,909 | 672,741,909 | ||||||||||||
| Diluted* |
678,649,016 | 675,505,879 | 677,158,404 | 677,158,404 | ||||||||||||
| (Loss) profit per ADS (6 ordinary shares equal to 1 ADS) |
||||||||||||||||
| Basic |
(1.02 | ) | 7.14 | 0.30 | 0.06 | |||||||||||
| Diluted |
(1.02 | ) | 7.08 | 0.30 | 0.06 | |||||||||||
| * | Shares used in (loss) profit 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$”))
| Three months ended | ||||||||||||||||
| March 31, 2017 | December 31, 2017 | March 31, 2018 | ||||||||||||||
| RMB | RMB | RMB | US$ | |||||||||||||
| Gross profit |
180,477 | 200,169 | 227,902 | 36,333 | ||||||||||||
| Plus: depreciation and amortization |
142,810 | 119,814 | 119,562 | 19,061 | ||||||||||||
| Plus: share-based compensation expenses |
(222 | ) | 84 | 14 | 2 | |||||||||||
| Adjusted cash gross profit |
323,065 | 320,067 | 347,478 | 55,396 | ||||||||||||
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| Adjusted cash gross margin |
37.5 | % | 41.8 | % | 43.4 | % | 43.4 | % | ||||||||
| Operating expenses |
(252,620 | ) | (192,374 | ) | (171,463 | ) | (27,335 | ) | ||||||||
| Plus: share-based compensation expenses |
4,545 | 15,317 | 6,555 | 1,045 | ||||||||||||
| Plus: changes in the fair value of contingent purchase consideration payable |
(2,867 | ) | 3,834 | (2,284 | ) | (364 | ) | |||||||||
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| Adjusted operating expenses |
(250,942 | ) | (173,223 | ) | (167,192 | ) | (26,654 | ) | ||||||||
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| Operating (loss) profit |
(72,143 | ) | 7,795 | 56,439 | 8,998 | |||||||||||
| Plus: depreciation and amortization |
170,953 | 143,966 | 135,290 | 21,568 | ||||||||||||
| Plus: share-based compensation expenses |
4,323 | 15,401 | 6,569 | 1,047 | ||||||||||||
| Plus: changes in the fair value of contingent purchase consideration payable |
(2,867 | ) | 3,834 | (2,284 | ) | (364 | ) | |||||||||
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| Adjusted EBITDA |
100,266 | 170,996 | 196,014 | 31,249 | ||||||||||||
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| Adjusted EBITDA margin |
11.6 | % | 22.3 | % | 24.5 | % | 24.5 | % | ||||||||
21VIANET GROUP, INC.
SUPPLEMENTARY DISCLOSURE FOR HOSTING AND RELATED SERVICES
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))
| Three months ended | ||||||||||||||||
| March 31, 2017 | December 31, 2017 | March 31, 2018 | ||||||||||||||
| RMB | RMB | RMB | US$ | |||||||||||||
| GAAP Disclosure |
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| Net revenues |
706,711 | 765,814 | 800,765 | 127,661 | ||||||||||||
| Cost of revenues |
(500,430 | ) | (565,645 | ) | (572,863 | ) | (91,328 | ) | ||||||||
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| Gross profit |
206,281 | 200,169 | 227,902 | 36,333 | ||||||||||||
| Sales and marketing |
(34,015 | ) | (42,702 | ) | (41,232 | ) | (6,573 | ) | ||||||||
| Research and development |
(22,206 | ) | (29,340 | ) | (22,030 | ) | (3,512 | ) | ||||||||
| General and administrative |
(98,214 | ) | (115,351 | ) | (112,340 | ) | (17,910 | ) | ||||||||
| (Allowance) reversal for doubtful debt |
(2,440 | ) | (1,147 | ) | 1,855 | 296 | ||||||||||
| Changes in the fair value of contingent purchase consideration payable |
2,867 | (3,834 | ) | 2,284 | 364 | |||||||||||
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| Total operating expenses |
(154,008 | ) | (192,374 | ) | (171,463 | ) | (27,335 | ) | ||||||||
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| Operating profit |
52,273 | 7,795 | 56,439 | 8,998 | ||||||||||||
| Non-GAAP disclosure |
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| Gross profit |
206,281 | 200,169 | 227,902 | 36,333 | ||||||||||||
| Plus: depreciation and amortization |
88,146 | 119,814 | 119,562 | 19,061 | ||||||||||||
| Plus: share-based compensation expenses |
(138 | ) | 84 | 14 | 2 | |||||||||||
| Adjusted cash gross profit |
294,289 | 320,067 | 347,478 | 55,396 | ||||||||||||
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| Adjusted cash gross margin |
41.6 | % | 41.8 | % | 43.4 | % | 43.4 | % | ||||||||
| Operating expenses |
(154,008 | ) | (192,374 | ) | (171,463 | ) | (27,335 | ) | ||||||||
| Plus: share-based compensation expenses |
2,819 | 15,317 | 6,555 | 1,045 | ||||||||||||
| Plus: changes in the fair value of contingent purchase consideration payable |
(2,867 | ) | 3,834 | (2,284 | ) | (364 | ) | |||||||||
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| Adjusted operating expenses |
(154,056 | ) | (173,223 | ) | (167,192 | ) | (26,654 | ) | ||||||||
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| Operating profit |
52,273 | 7,795 | 56,439 | 8,998 | ||||||||||||
| Plus: depreciation and amortization |
100,633 | 143,966 | 135,290 | 21,568 | ||||||||||||
| Plus: share-based compensation expenses |
2,681 | 15,401 | 6,569 | 1,047 | ||||||||||||
| Plus: changes in the fair value of contingent purchase consideration payable |
(2,867 | ) | 3,834 | (2,284 | ) | (364 | ) | |||||||||
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| Adjusted EBITDA |
152,720 | 170,996 | 196,014 | 31,249 | ||||||||||||
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| Adjusted EBITDA margin |
21.6 | % | 22.3 | % | 24.5 | % | 24.5 | % | ||||||||
21VIANET GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))
| Three months ended | ||||||||||||||||
| March 31,2017 | December 31, 2017 | March 31, 2018 | ||||||||||||||
| RMB | RMB | RMB | US$ | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
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| Net (loss) profit |
(116,837 | ) | 797,569 | 34,731 | 5,538 | |||||||||||
| Adjustments to reconcile net (loss) profit to net cash generated from operating activities: |
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| Depreciation and amortization |
170,953 | 143,966 | 135,290 | 21,568 | ||||||||||||
| Stock-based compensation expenses |
4,323 | 15,513 | 6,569 | 1,047 | ||||||||||||
| Gain from disposal of subsidiaries |
— | (677,084 | ) | — | — | |||||||||||
| Others |
15,894 | (148,681 | ) | (47,256 | ) | (7,535 | ) | |||||||||
| Changes in operating assets and liabilities |
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| Accounts and notes receivable |
(80,864 | ) | 32,070 | (49,722 | ) | (7,927 | ) | |||||||||
| Prepaid expenses and other current assets |
(85,428 | ) | (23,235 | ) | (92,181 | ) | (14,696 | ) | ||||||||
| Accounts and notes payable |
60,490 | (38,841 | ) | 40,243 | 6,416 | |||||||||||
| Accrued expenses and other payables |
(4,161 | ) | 92,272 | (25,300 | ) | (4,033 | ) | |||||||||
| Deferred revenue |
(43,074 | ) | 8,674 | (20,505 | ) | (3,269 | ) | |||||||||
| Advances from customers |
111,899 | (23,683 | ) | 73,995 | 11,797 | |||||||||||
| Others |
13,155 | (21,413 | ) | 39,989 | 6,375 | |||||||||||
| Net cash generated from operating activities |
46,350 | 157,127 | 95,853 | 15,281 | ||||||||||||
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| CASH FLOWS FROM INVESTING ACTIVITIES |
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| Purchases of property and equipment |
(99,432 | ) | (74,603 | ) | (91,027 | ) | (14,512 | ) | ||||||||
| Purchases of intangible assets |
(9,386 | ) | (4,062 | ) | (1,887 | ) | (301 | ) | ||||||||
| Payments for investments |
(207,003 | ) | (275,766 | ) | (14,473 | ) | (2,307 | ) | ||||||||
| Payments for assets acquisition, net of cash acquired |
(15,053 | ) | — | — | — | |||||||||||
| Proceeds from other investing activities |
— | 100,000 | 26,654 | 4,249 | ||||||||||||
| Net cash used in investing activities |
(330,874 | ) | (254,431 | ) | (80,733 | ) | (12,871 | ) | ||||||||
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| CASH FLOWS FROM FINANCING ACTIVITIES |
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| Net proceeds from issuance of 2020 bonds |
— | 612,723 | — | — | ||||||||||||
| Proceeds from bank borrowings |
59,038 | — | 69,999 | 11,159 | ||||||||||||
| Repayments of bank borrowings |
(96,974 | ) | (1,587,871 | ) | (50,000 | ) | (7,971 | ) | ||||||||
| Payments for capital lease |
(32,055 | ) | (67,239 | ) | (29,287 | ) | (4,669 | ) | ||||||||
| Payments for other financing activities |
(74,523 | ) | (9,925 | ) | (19,650 | ) | (3,132 | ) | ||||||||
| Net cash used in financing activities |
(144,514 | ) | (1,052,312 | ) | (28,938 | ) | (4,613 | ) | ||||||||
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| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash |
(17,255 | ) | (4,967 | ) | (73,414 | ) | (11,703 | ) | ||||||||
| Net decrease in cash, cash equivalents and restricted cash |
(446,293 | ) | (1,154,583 | ) | (87,232 | ) | (13,906 | ) | ||||||||
| Cash, cash equivalents and restricted cash at beginning of period |
3,294,523 | 3,350,052 | 2,195,469 | 350,009 | ||||||||||||
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| Cash, cash equivalents and restricted cash at end of period |
2,848,230 | 2,195,469 | 2,108,237 | 336,103 | ||||||||||||
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Notes:
The Company adopted Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash on January 1, 2018 and retrospectively adjusted the condensed consolidated statement of cash flows for the three months ended March 31, 2017 and December 31,2017 by excluding the movement of restricted cash of RMB71.6 million and RMB1,619.3 million respectively.