21Vianet Group, Inc. Reports Fourth Quarter and Full Year 2012 Financial Results

Tue Mar 5, 2013 4:01pm EST

* Reuters is not responsible for the content in this press release.

http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130305:nGNXUXHMCa

4Q12 Net Revenues Up 31.3% YOY to RMB417.8 Million

4Q12 Adjusted EBITDA Up 20.2% YOY to RMB78.3 Million

Live Conference Call to be Held at 8:00 AM U.S. Eastern Time, March 6, 2013

BEIJING, March 5, 2013 (GLOBE NEWSWIRE) -- 21Vianet Group, Inc. (Nasdaq:VNET) ("21Vianet" or the
"Company"), the largest carrier-neutral Internet data center services provider in China, today
announced its unaudited financial results for the fourth quarter and full year 2012. The Company
will hold a conference call at 8:00 a.m. Eastern Time on March 6, 2013. Dial-in details are
provided at the end of the release.

Fourth Quarter 2012 Financial Highlights

* Net revenues increased by 31.3% to RMB417.8 million (US$67.1 million) from RMB318.3 million in
the comparative period in 2011.
* Adjusted EBITDA1 increased by 20.2% to RMB78.3 million (US$12.6 million) from RMB65.1 million in
the comparative period in 2011.

Full Year 2012 Financial Highlights

* Net revenues increased by 49.3% to RMB1.5 billion (US$244.6 million) from RMB1.0 billion in
2011.
* Adjusted EBITDA increased by 40.7% to RMB294.2 million (US$47.2 million) from RMB209.0 million
in 2011.

Mr. Josh Chen, Founder, Chairman and Chief Executive Officer of the Company, stated, "We are
extremely pleased with our achievements for 2012 which proved to be a pivotal year for 21Vianet.
We significantly expanded the scale of our business, delivering growth of almost 50% in revenues.
Moreover, we focused on making significant upgrades to our network backbone, to support our growth
in data transmissions for 2013. These improvements have greatly increased the efficiency and speed
of our network and further strengthen the foundation for our future growth."

"Looking forward, we are excited about the growth opportunities for 2013. Our recently announced
partnership with Microsoft to launch Microsoft Azure and Office 365 services in China coupled with
the construction of what will be one of the largest data centers in China, have provided us strong
foundation for growth going forward. We believe that these efforts have better positioned us to
take advantage of the growth trends taking place in China for internet and cloud infrastructure
services, further strengthening our position as a leading internet infrastructure provider in
Greater China."

Mr. Shang-Wen Hsiao, President and Chief Financial Officer of the Company, commented, "Our 2012
results continued to underscore the stability and scalability of our business model. Moreover,
with our accelerated efforts in data center expansion and our cloud platform rollout, we are
confident in our ability to realize increased leverage and further margin expansion for years
ahead."

Fourth Quarter 2012 Financial Results

REVENUES: Net revenues for the fourth quarter of 2012 increased by 31.3% to RMB417.8 million
(US$67.1 million) from RMB318.3 million in the comparative period in 2011.

Net revenues from hosting and related services increased by 44.6% to RMB253.4 million (US$40.7
million) in the fourth quarter of 2012 from RMB175.2 million in the comparative period in 2011,
primarily due to an increase in the total number of cabinets under management in both the
Company's self-built and partnered data centers. Net revenues from managed network services
increased by 14.9% to RMB164.4 million (US$26.4 million) in the fourth quarter of 2012 from
RMB143.0 million in the comparative period in 2011, primarily driven by an increase in network
capacity demand for data transmission services.

GROSS PROFIT: For the fourth quarter of 2012, gross profit increased by 29.2% to RMB113.7 million
(US$18.3 million) from RMB88.1 million in the comparative period in 2011. Gross margin for the
fourth quarter of 2012 remained stable at 27.2% compared with the comparative period in 2011.

Adjusted gross profit, which excludes share-based compensation expenses and amortization of
intangible assets derived from acquisitions, increased by 28.5% to RMB123.3 million (US$19.8
million) from RMB96.0 million in the comparative period in 2011. Adjusted gross margin was 29.5%
in the fourth quarter of 2012, compared with 30.2% in the comparative period in 2011.

OPERATING EXPENSES: Total operating expenses were RMB58.2 million (US$9.3 million), compared to
RMB79.9 million in the comparative period in 2011.

Sales and marketing expenses increased to RMB31.6 million (US$5.1 million) from RMB25.5 million in
the comparative period in 2011, primarily due to the expansion of the Company's sales and service
support team.

General and administrative expenses increased to RMB49.4 million (US$7.9 million) from RMB24.4
million in the comparative period in 2011, primarily due to an increase in headcount, office
rentals and other expansion related expenses.

Research and development expenses increased to RMB17.3 million (US$2.8 million) from RMB10.0
million in the comparative period in 2011, which reflected the Company's efforts to further
strengthen its research and development capabilities and expand its cloud computing service
offerings.

Change in the fair value of contingent purchase consideration payable was a gain of RMB40.1
million (US$6.4 million) in the fourth quarter of 2012, compared with a loss in the change in fair
value of contingent purchase consideration payable of RMB20.0 million in the prior year period.
This non-cash gain was primarily due to a decrease in the market value of the Company's shares,
which resulted in a decrease in the fair value of share-based contingent purchase considerations
payable as of December 31, 2012 associated with the Company's acquisitions of the Managed Network
Entities, Gehua and Fastweb.

Adjusted operating expenses, which exclude share-based compensation expenses and the changes in
the fair value of contingent purchase consideration payable, increased to RMB77.5 million (US$12.4
million) from RMB50.0 million in the comparative period in 2011. As a percentage of net revenue,
adjusted operating expenses were 18.5%, compared  to 15.7% in the comparative period in 2011. 

ADJUSTED EBITDA: Adjusted EBITDA for the fourth quarter of 2012 increased to RMB78.3 million
(US$12.6 million) from RMB65.1 million in the comparative period in 2011. Adjusted EBITDA margin
for the quarter was 18.7%, compared with 19.2% in the previous quarter and 20.5% in the
comparative period in 2011. Adjusted EBITDA in the fourth quarter of 2012 excludes share-based
compensation expenses of RMB22.4 million (US$3.6 million) and changes in the fair value of
contingent purchase consideration payable of RMB40.1 million (US$6.4 million).

NET PROFIT/LOSS: Net profit for the fourth quarter of 2012 increased to RMB43.1 million (US$6.9
million), compared to RMB11.5  million in the comparative period in 2011.

Adjusted net profit for the fourth quarter of 2012 was RMB39.5  million (US$6.3 million), compared
with RMB46.3 million in the comparative period in 2011. Adjusted net profit in the fourth quarter
of 2012 excludes share-based compensation expenses of RMB22.4 million (US$3.6 million),
amortization of intangible assets derived from acquisitions of RMB8.1 million (US$1.3 million),
and changes in the fair value of contingent purchase consideration payable and related deferred
tax impact of RMB34.1 million (US$5.5 million) in the aggregate. Adjusted net margin was 9.5%,
compared to 14.6% in the comparative period in 2011. The decrease in adjusted net profit was
primarily due to an increase in operating expenses, an increase in expenses associated with the
Microsoft partnership, and a reduction in foreign exchange gain.

EARNING/LOSS PER SHARE: Diluted earnings per ordinary share for the fourth quarter of 2012 was
RMB0.12, which represents the equivalent of RMB0.72 (US$0.12) per American Depositary Share
("ADS"). Each ADS represents six ordinary shares. Adjusted diluted earnings per share for the
fourth quarter of 2012 was RMB0.11, which represents the equivalent of RMB0.66 (US$0.11) per ADS.
Adjusted earnings per share is calculated using adjusted net profit as discussed above to divide
the weighted average shares number.

As of December 31, 2012, the Company had a total of 347.0 million ordinary shares outstanding, or
the equivalent of 57.8 million ADSs.

BALANCE SHEET: As of December 31, 2012, the Company's cash and cash equivalents and short-term
investment were RMB655.0 million (US$105.1 million), compared to RMB1.3 billion as of December 31,
2011. 

Fourth Quarter 2012 Operational Highlights

* Monthly Recurring Revenues ("MRR") per cabinet increased to RMB10,467 in the fourth quarter of
2012 from RMB10,027 in the third quarter of 2012.
* Total cabinets under management increased to 11,917 as of December 31, 2012, from 11,648 as of
September 30, 2012, with 7,404 cabinets in the Company's self-built data centers and 4,513
cabinets in its partnered data centers as of December 31, 2012.
* Utilization rate was 66.3% in the fourth quarter 2012, compared to 67.7% in the third quarter of
2012.
* Churn rate remained stable at 0.84% in the fourth quarter of 2012, compared to 0.87% in the
third quarter of 2012. Top 20 customers' churn rate remained 0%.
* The largest customer represented 4.4% of total net revenues in the fourth quarter of 2012.

Full Year 2012 Financial Performance

For the full year of 2012, net revenue increased by 49.3% to RMB1.5 billion (US$244.6 million)
from RMB1.0 billion in the prior year. Adjusted EBITDA for the full year increased by 40.7% to
RMB294.2 million (US$47.2 million) from RMB209.0 million in the prior year. Adjusted EBITDA margin
was 19.3%, compared to 20.5% in the prior year. Adjusted EBITDA for the full year excludes
share-based compensation expense of RMB67.6 million (US$10.9 million) and changes in the fair
value of contingent purchase consideration payable of RMB17.4 million (US$2.8 million). Adjusted
net profit for the full year was RMB167.3 million (US$26.8 million), compared to RMB170.0 million
in the prior year. Adjusted net profit in the full year excludes share-based compensation expense
of RMB67.6 million (US$10.9 million), amortization of intangible assets derived from acquisitions
of RMB27.2 million (US$4.4 million), and changes in the fair value of contingent purchase
consideration payable and related deferred tax assets of RMB14.8 million (US$2.4 million).

Recent Developments

In February 2013, 21Vianet commenced construction of a new data center in the Daxing District of
Beijing. The new data center, which will be built in two phases contingent on market demand, will
be one of the largest data centers in China as measured by cabinet capacity. It will occupy a
gross area of approximately 42,000 square meters (approximately 452,000 square feet) once fully
completed. The first phase of this data center, which is expected to be fully operational by the
end of 2013, will be capable of hosting more than 3,000 cabinets. At full capacity, the data
center will host a total of over 5,000 cabinets. The data center will be wholly owned and operated
by 21Vianet.

Financial Outlook

For the first quarter of 2013, the Company expects net revenues to be in the range of RMB430
million to RMB435 million. Adjusted EBITDA is expected to be in the range of RMB80 million to
RMB83 million. These forecasts reflect the Company's current and preliminary view, which is
subject to change.

Conference Call

The Company will hold a conference call on Wednesday, March 6, 2013 at 8:00 am Eastern Time, or
9:00 pm Beijing Time to discuss the financial results. Listeners may access the call by dialing
the following numbers:

 United States:            +1-646-254-3515  
 International Toll Free:  +1-855-500-8701  
 China Domestic:           400-1200654      
 Hong Kong:                +852-3051-2745   
 Conference ID:            # 98281809       


The replay will be accessible through March 13, 2013 by dialing the following numbers:

 United States Toll Free:  +1- 855-452-5696  
 International:            +61-2-8199-0299   
 Conference ID:            # 98281809        


A webcast of the conference call will be available through the Company's investor relations
website at http://ir.21vianet.com
http://www.globenewswire.com/newsroom/ctr?d=10024069&l=37&a=http%3A%2F%2Fir.21vianet.com&u=http%3A%2F%2Fir.21vianet.com%2F
.

Non-GAAP Disclosure

In evaluating its business, 21Vianet considers and uses the following non-GAAP measures defined as
non-GAAP financial measures by the SEC as supplemental measure to review and assess its operating
performance: adjusted gross profit, adjusted gross margin, adjusted operating expenses, adjusted
net profit, adjusted net margin, adjusted EBITDA, adjusted EBITDA margin, adjusted basic earnings
per share, adjusted diluted earnings per share, adjusted basic earnings per ADS and adjusted
diluted earnings per ADS. The presentation of these non-GAAP financial measures is not intended to
be considered in isolation or as a substitute for the financial information prepared and presented
in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please
see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of
this press release.

The non-GAAP financial measures are provided as additional information to help investors compare
business trends among different reporting periods on a consistent basis and to enhance investors'
overall understanding of the Company's current financial performance and prospects for the future.
These non-GAAP financial measures should be considered in addition to results prepared in
accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S.
GAAP results. In addition, the Company's calculation of the non-GAAP financial measures may be
different from the calculation used by other companies, and therefore comparability may be
limited.

Exchange Rate

This press release contains translations of certain Renminbi amounts into U.S. dollars at
specified rates solely for the convenience of readers. Unless otherwise noted, all translations
from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.2301 to US$1.00,
the noon buying rate in effect on December 31, 2012 in the City of New York for cable transfers in
Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New
York.

Statement Regarding Unaudited Condensed Financial Information

The unaudited financial information set forth above is preliminary and subject to potential
adjustments. Adjustments to the consolidated financial statements may be identified when audit
work has been performed for the Company's year-end audit, which could result in significant
differences from this preliminary unaudited condensed financial information.

About 21Vianet

21Vianet Group, Inc. is the largest carrier-neutral Internet data center services provider in
China. 21Vianet provides hosting and related services, managed network services and cloud
computing infrastructure services to improve the reliability, security and speed of its customers'
Internet connections. Customers may locate their servers and networking equipment in 21Vianet's
data centers and connect to China's Internet backbone through 21Vianet's extensive fiber optic
network. In addition, 21Vianet's proprietary smart routing technology, BroadEx, enables customers'
data to be delivered across the Internet in a faster and more reliable manner. 21Vianet operates
in 33 cities throughout China, servicing a diversified and loyal base of more than 1,970 customers
that span many industries ranging from Internet companies to government entities and blue-chip
enterprises to small-to mid-sized enterprises.

Safe Harbor Statement 

This announcement contains forward-looking statements. These forward-looking statements are made
under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995.
These statements can be identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar statements. Among other things,
the outlook for the first quarter and full year of 2013 and quotations from management in this
announcement, as well as 21Vianet's strategic and operational plans, contain forward-looking
statements. 21Vianet may also make written or oral forward-looking statements in its reports filed
with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to
shareholders, in press releases and other written materials and in oral statements made by its
officers, directors or employees to third parties. Statements that are not historical facts,
including statements about 21Vianet's beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties. A number of factors could
cause actual results to differ materially from those contained in any forward-looking statement,
including but not limited to the following: 21Vianet's goals and strategies; 21Vianet's expansion
plans; the expected growth of the data center services market; expectations regarding demand for,
and market acceptance of, 21Vianet's services; 21Vianet's expectations regarding keeping and
strengthening its relationships with customers; 21Vianet's plans to invest in research and
development to enhance its solution and service offerings; and general economic and business
conditions in the regions where 21Vianet provides solutions and services. Further information
regarding these and other risks is included in 21Vianet's reports filed with, or furnished to the
Securities and Exchange Commission. 21Vianet does not undertake any obligation to update any
forward-looking statement, except as required under applicable law. All information provided in
this press release and in the attachments is as of the date of this press release, and 21Vianet
undertakes no duty to update such information, except as required under applicable law.

1Adjusted EBITDA is a non-GAAP financial measure, which is defined as EBITDA excluding share-based
compensation expenses and changes in the fair value of contingent purchase consideration payable.

 21VIANET GROUP, INC.                                                                                                      
 CONSOLIDATED BALANCE SHEETS                                                                                               
 (Amount in thousands of Renminbi ("RMB") and US dollars ("US$"))                                                          
                                                                                                                        
                                                                                  
                                                               As of              As of                                    
                                                               December 31,       December 31, 2012                        
                                                               2011                                                        
                                                               RMB                RMB                US$                
                                                               (Audited)          (Unaudited)        (Unaudited)        
 Assets                                                                                                                 
 Current assets:                                                                                                        
 Cash and cash equivalents                                     410,389            432,254            69,382             
 Restricted cash                                               4,578              191,766            30,781             
 Accounts receivable, net                                      147,624            293,369            47,089             
 Short term investments                                        894,540            222,701            35,746             
 Prepaid expenses and other current assets                     47,575             95,756             15,370             
 Deferred tax assets                                           4,872              8,585              1,378              
 Amount due from related parties                               41,643             18,726             3,006              
 Total current assets                                          1,551,221          1,263,157          202,752            
 Non-current assets:                                                                                                    
 Property and equipment, net                                   453,883            822,707            132,054            
 Intangible assets, net                                        159,439            303,909            48,781             
 Deferred tax assets                                           12,773             11,231             1,803              
 Goodwill                                                      217,436            296,688            47,622             
 Investment                                                    8,200              57,599             9,245              
 Restricted cash                                               --                 221,628            35,574             
 Total non-current assets                                      851,731            1,713,762          275,079            
 Total assets                                                  2,402,952          2,976,919          477,831            
 Liabilities and Shareholders' (Deficit) Equity                                                                         
 Current liabilities:                                                                                                   
 Short term bank borrowings                                    100,000            344,840            55,350             
 Accounts payable                                              82,131             109,571            17,587             
 Notes payable                                                 4,578              --                 --                 
 Accrued expenses and other payables                           124,326            167,498            26,890             
 Advances from customers                                       23,238             22,976             3,688              
 Income tax payable                                            5,634              23,506             3,773              
 Amounts due to related parties                                96,618             105,037            16,860             
 Current portion of capital lease obligations                  26,012             36,719             5,894              
 Total current liabilities                                     462,537            810,147            130,042            
 Non-current liabilities:                                                                                               
 Long term bank borrowings                                     --                 63,000             10,112             
 Amounts due to related parties                                124,493            86,316             13,855             
 Non-current portion of capital lease obligations              73,896             52,352             8,403              
 Unrecognized tax benefits                                     26,801             12,340             1,981              
 Deferred tax liabilities                                      39,682             44,666             7,169              
 Deferred government grant                                     5,819              18,793             3,016              
 Total non-current liabilities                                 270,691            277,467            44,536             
 Commitments and contingencies                                                                                          
 Mezzanine equity                                              --                 --                 --                 
 Shareholders' equity                                                                                                   
 Treasury stock                                                (168,018)          (20,702)           (3,323)            
 Ordinary shares                                               23                 23                 4                  
 Additional paid-in capital                                    3,277,658          3,294,855          528,861            
 Accumulated other comprehensive income loss                   (54,779)           (57,367)           (9,208)            
 Statutory reserves                                            15,837             25,871             4,153              
 Accumulated deficit                                           (1,418,167)        (1,371,877)        (220,204)          
 Total 21Vianet Group, Inc. shareholders' equity               1,652,554          1,870,803          300,283            
 Non-controlling interest                                      17,170             18,502             2,970              
 Total shareholders' equity                                    1,669,724          1,889,305          303,253            
 Total liabilities, mezzanine equity and shareholders' equity  2,402,952          2,976,919          477,831            


                                                                                                                                                                                              
 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                                                  Year ended                                     
                                                                         December 31, 2011  September 30, 2012  December 31, 2012          December 31, 2011  December 31, 2012          
                                                                         RMB                RMB                 RMB          US$          RMB                RMB          US$          
                                                                         (Unaudited)        (Unaudited)         (Unaudited)  (Unaudited)  (Unaudited)        (Unaudited)  (Unaudited)  
 Net revenues                                                                                                                                                                          
 Hosting and related services                                            175,247            218,861             253,442      40,680       614,612            866,882      139,144      
 Managed network services                                                143,030            177,198             164,376      26,384       406,317            657,276      105,500      
 Total net revenues                                                      318,277            396,059             417,818      67,064       1,020,929          1,524,158    244,644      
 Cost of revenues                                                        (230,222)          (285,662)           (304,080)    (48,808)     (744,371)          (1,098,477)  (176,318)    
 Gross profit                                                            88,055             110,397             113,738      18,256       276,558            425,681      68,326       
 Operating expenses                                                                                                                                                                    
 Sales and marketing                                                     (25,458)           (28,885)            (31,576)     (5,068)      (80,885)           (109,871)    (17,636)     
 General and administrative                                              (24,418)           (42,622)            (49,387)     (7,927)      (82,926)           (153,512)    (24,640)     
 Research and development                                                (10,020)           (18,758)            (17,324)     (2,781)      (34,657)           (63,929)     (10,261)     
 Changes in the fair value of contingent purchase consideration payable  (19,979)           (12,043)            40,062       6,430        (63,185)           (17,430)     (2,798)      
 Total operating expenses                                                (79,875)           (102,308)           (58,225)     (9,346)      (261,653)          (344,742)    (55,335)     
 Operating profit                                                        8,180              8,089               55,513       8,910        14,905             80,939       12,991       
 Interest income                                                         4,348              4,216               5,859        940          14,939             16,301       2,616        
 Interest expense                                                        (705)              (1,592)             (5,985)      (961)        (4,398)            (11,376)     (1,826)      
 Gain(loss) from equity method investment                                --                 29                  (1,130)      (181)        --                 (1,101)      (177)        
 Other income                                                            602                11,209              --           --           1,943              11,616       1,864        
 Other expense                                                           (244)              (107)               (1,667)      (268)        (520)              (2,167)      (348)        
 Foreign exchange gain (loss)                                            6,734              (1,213)             5,332        856          32,747             (397)        (64)         
 Profit before income taxes                                              18,915             20,631              57,922       9,296        59,616             93,815       15,056       
 Income tax (expense) benefit                                            (7,372)            (8,417)             (14,788)     (2,374)      (13,677)           (36,159)     (5,804)      
 Net profit                                                              11,543             12,214              43,134       6,922        45,939             57,656       9,252        
 Net income attributable to non-controlling interest                     (8,586)            (363)               (397)        (64)         (27,495)           (1,332)      (214)        
 Net profit attributable to the Company's ordinary shareholders          2,957              11,851              42,737       6,858        18,444             56,324       9,038        
                                                                                                                                                                                       
 Earnings per share                                                                                                                                                                    
 Basic                                                                   0.01               0.03                0.12         0.02         0.07               0.16         0.03         
 Diluted                                                                 0.01               0.03                0.12         0.02         0.06               0.16         0.03         
 Shares used in earnings per share computation                                                                                                                                         
 Basic*                                                                  322,761,801        340,885,136         342,124,551  342,124,551  259,595,677        342,326,855  342,326,855  
 Diluted*                                                                332,991,032        352,729,739         364,047,902  364,047,902  316,807,661        356,510,914  356,510,914  
                                                                                                                                                                                       
 Earnings per ADS (6 ordinary shares equal to 1 ADS)                                                                                                                                   
 EPS - Basic                                                             0.06               0.18                0.72         0.12         0.42               0.96         0.15         
 EPS - Diluted                                                           0.06               0.18                0.72         0.12         0.36               0.96         0.15         
                                                                                                                                                                                       
 * 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                                                  Year ended                                     
                                                                                                               December 31, 2011  September 30, 2012  December 31, 2012          December 31, 2011  December 31, 2012          
                                                                                                               RMB                RMB                 RMB          US$          RMB                RMB          US$          
 Gross profit                                                                                                  88,055             110,397             113,738      18,256       276,558            425,681      68,326       
 Plus: share-based compensation expense                                                                        578                1,513               1,530        246          2,157              4,517        725          
 Plus: amortization of intangible assets derived from acquisitions                                             7,344              6,788               8,050        1,292        28,388             27,183       4,363        
 Adjusted gross profit                                                                                         95,977             118,698             123,318      19,794       307,103            457,381      73,414       
 Adjusted gross margin                                                                                         30.2%              30.0%               29.5%        29.5%        30.1%              30.0%        30.0%        
 Operating expenses                                                                                            (79,875)           (102,308)           (58,225)     (9,346)      (261,653)          (344,742)    (55,335)     
 Plus: share-based compensation expense                                                                        9,875              21,462              20,836       3,344        39,802             63,115       10,131       
 Plus: changes in the fair value of contingent purchase consideration payable                                  19,979             12,043              (40,062)     (6,430)      63,185             17,430       2,798        
 Adjusted operating expenses                                                                                   (50,021)           (68,803)            (77,451)     (12,432)     (158,666)          (264,197)    (42,406)     
 Net profits                                                                                                   11,543             12,214              43,134       6,922        45,939             57,656       9,252        
 Plus: share-based compensation expense                                                                        10,453             22,975              22,366       3,590        41,959             67,632       10,856       
 Plus: amortization of intangible assets derived from acquisitions                                             7,344              6,788               8,050        1,292        28,388             27,183       4,363        
 Plus: changes in the fair value of contingent purchase consideration payable and related deferred tax impact  16,982             10,237              (34,053)     (5,466)      53,707             14,816       2,378        
 Adjusted net profit                                                                                           46,322             52,214              39,497       6,338        169,993            167,287      26,849       
 Adjusted net margin                                                                                           14.6%              13.2%               9.5%         9.5%         16.7%              11.0%        11.0%        
 Operating profit                                                                                              8,180              8,089               55,513       8,910        14,905             80,939       12,991       
 Plus: depreciation                                                                                            18,772             23,724              29,569       4,747        58,873             92,787       14,893       
 Plus: amortization                                                                                            7,732              9,176               10,885       1,747        30,104             35,377       5,678        
 Plus: share-based compensation expense                                                                        10,453             22,975              22,366       3,590        41,959             67,632       10,856       
 Plus: changes in the fair value of contingent purchase consideration payable                                  19,979             12,043              (40,062)     (6,430)      63,185             17,430       2,798        
 Adjusted EBITDA                                                                                               65,116             76,007              78,271       12,564       209,026            294,165      47,216       
 Adjusted EBITDA margin                                                                                        20.5%              19.2%               18.7%        18.7%        20.5%              19.3%        19.3%        
                                                                                                                                                                                                                             
                                                                                                                                                                                                                             
 Adjusted net profit                                                                                           46,322             52,214              39,497       6,338        169,993            167,287      26,849       
 Less: Net income attributable to non-controlling interest                                                     (8,586)            (363)               (397)        (64)         (27,495)           (1,332)      (214)        
 Adjusted net profit attributable to the Company's ordinary shareholders                                       37,736             51,851              39,100       6,274        142,498            165,955      26,635       
                                                                                                                                                                                                                             
 Adjusted earnings per share                                                                                                                                                                                                 
 Basic                                                                                                         0.12               0.15                0.11         0.02         0.55               0.48         0.08         
 Diluted                                                                                                       0.12               0.15                0.11         0.02         0.47               0.47         0.07         
 Shares used in adjusted earnings per share computation:                                                                                                                                                                     
 Basic*                                                                                                        322,761,801        340,885,136         342,124,551  342,124,551  259,558,631        342,326,855  342,326,855  
 Diluted*                                                                                                      322,761,801        352,729,739         364,047,902  364,047,902  302,796,593        356,510,914  356,510,914  
                                                                                                                                                                                                                             
 Earnings per ADS (6 ordinary shares equal to 1 ADS)                                                                                                                                                                         
 EPS - Basic                                                                                                   0.72               0.90                0.66         0.11         3.30               2.88         0.46         
 EPS - Diluted                                                                                                 0.72               0.90                0.66         0.11         2.82               2.82         0.45         
                                                                                                                                                                                                                             
 * Shares used in adjusted earnings/ADS per share computation were computed under weighted average method.                                                                                                                          


CONTACT: ICR, Inc.
         Jeremy Peruski
         +1 (646) 405-4922
         IR@21Vianet.com

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