BEIJING, Nov. 14, 2017 (GLOBE NEWSWIRE) -- ChinaCache International Holdings Ltd. ("ChinaCache" or the "Company") (Nasdaq:CCIH), a leading total solutions provider of Internet content and application delivery services in China, today reported adjusted audited financial results for the fourth quarter and full year 2016, which included a non-cash impairment charge of RMB399.1 million, resulting in an retroactive increase to operating expenses for both the fourth quarter and full year 2016.
Due to the downturn in the Company’s operating results, ChinaCache has impaired the net value of all its property and equipment and intangible assets as of December 31, 2016 based on the excess of the carrying amount of the asset group over its fair value. The Company determined the fair value of the asset group using the income approach based on the discounted expected cash flows associated with the asset group. The discounted cash flow for the asset group was based on three-year projections, which is consistent with the remained useful lives of the principal assets. Cash flow projections were based on past experience, actual results of operations and management best estimates about future developments, as well as certain market assumptions.
ChinaCache currently expects to generate total net revenues in the range of RMB0.84 billion to RMB0.87 billion for the full year of 2017, representing year-over-year decrease of approximately 20% to 17%.
This forecast reflects ChinaCache's current view, which is subject to change.
The following presents the Company's unaudited financial results for the fourth quarter 2016 and full year 2016 after giving effect to the aforementioned adjustment(s).
Condensed Consolidated Balance Sheets | ||||||||||
(amounts in thousands) | ||||||||||
As of Dec 31 | As of Dec 31 | As of Dec 31 | ||||||||
2015 | 2016 | 2016 | ||||||||
RMB | RMB | US$ | ||||||||
(Audited) | (Unaudited) | (Unaudited) | ||||||||
ASSETS | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | 606,796 | 134,924 | 19,433 | |||||||
Accounts receivable, net | 243,431 | 190,587 | 27,450 | |||||||
Prepaid expenses and other current assets | 31,560 | 56,976 | 8,206 | |||||||
Short term investments | 26,169 | - | - | |||||||
Deferred tax assets | 17,923 | - | - | |||||||
Amount due from a subsidiary held for sale | 435 | 53,169 | 7,658 | |||||||
Assets held for sale | 1,060,543 | 1,270,483 | 182,988 | |||||||
Total current assets | 1,986,857 | 1,706,139 | 245,735 | |||||||
Non-current assets | ||||||||||
Property and equipment, net | 499,946 | - | - | |||||||
Intangible assets, net | 10,898 | - | - | |||||||
Long term investments | 50,157 | 34,159 | 4,920 | |||||||
Deferred tax assets | 11,368 | - | - | |||||||
Long term deposits and other non-current assets | 59,390 | 36,525 | 5,261 | |||||||
Total non-current assets | 631,759 | 70,684 | 10,181 | |||||||
Total Assets | 2,618,616 | 1,776,823 | 255,916 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Current Liabilities | ||||||||||
Short-term loan | - | 29,311 | 4,222 | |||||||
Accounts payable | 205,593 | 301,569 | 43,435 | |||||||
Accrued employee benefits | 44,690 | 46,233 | 6,659 | |||||||
Accrued expenses and other payables | 76,409 | 52,697 | 7,590 | |||||||
Income tax payable | 13,513 | 13,924 | 2,005 | |||||||
Liabilities for uncertain tax positions | 11,337 | 10,020 | 1,443 | |||||||
Amounts due to related parties | 18 | 18 | 3 | |||||||
Current portion of long term loan | 7,180 | 3,840 | 553 | |||||||
Current portion of capital lease obligations | 70,615 | 72,851 | 10,493 | |||||||
Deferred government grant | 16,360 | 13,000 | 1,872 | |||||||
Amount due to a subsidiary held for sale | 319,536 | 18,063 | 2,602 | |||||||
Liabilities held for sale | 1,014,449 | 1,302,658 | 187,622 | |||||||
Total current liabilities | 1,779,700 | 1,864,184 | 268,499 | |||||||
Non-current liabilities | ||||||||||
Long-term loan | 4,340 | - | - | |||||||
Non-current portion of capital lease obligations | 104,450 | 43,951 | 6,330 | |||||||
Deferred government grant | 8,439 | 11,208 | 1,614 | |||||||
Total non-current liabilities | 117,229 | 55,159 | 7,944 | |||||||
Total Liabilities | 1,896,929 | 1,919,343 | 276,443 | |||||||
Total Shareholders' equity | 721,687 | (142,520 | ) | (20,527 | ) | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 2,618,616 | 1,776,823 | 255,916 | |||||||
Condensed Consolidated Statements of Comprehensive Income | |||||||||||||||||||||||||||
(amounts in thousands, except for number of shares, per share and per ADS data) | |||||||||||||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||||||||||
Dec 31, 2015 | Sep 30, 2016 | Dec 31, 2016 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2016 | Dec 31, 2016 | |||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||
Net revenues | 311,447 | 261,643 | 263,312 | 37,926 | 1,353,627 | 1,054,235 | 151,842 | ||||||||||||||||||||
Cost of revenues | (267,339 | ) | (255,133 | ) | (275,927 | ) | (39,742 | ) | (1,041,412 | ) | (1,077,810 | ) | (155,237 | ) | |||||||||||||
Gross profit (loss) | 44,108 | 6,510 | (12,615 | ) | (1,816 | ) | 312,215 | (23,575 | ) | (3,395 | ) | ||||||||||||||||
Other operating income (loss) | 13,911 | 3,260 | (28,895 | ) | (4,162 | ) | 13,911 | (19,044 | ) | (2,743 | ) | ||||||||||||||||
Sales & marketing expenses | (30,145 | ) | (23,009 | ) | (22,467 | ) | (3,236 | ) | (115,621 | ) | (93,603 | ) | (13,482 | ) | |||||||||||||
General & administrative expenses | (61,062 | ) | (62,202 | ) | (50,264 | ) | (7,240 | ) | (198,626 | ) | (265,017 | ) | (38,170 | ) | |||||||||||||
Research & development expenses | (25,530 | ) | (24,037 | ) | (25,102 | ) | (3,615 | ) | (103,110 | ) | (104,018 | ) | (14,982 | ) | |||||||||||||
Transaction tax on assets transfer | (5,394 | ) | - | - | - | (27,733 | ) | - | - | ||||||||||||||||||
Impairment of long lived assets | - | - | (399,094 | ) | (57,482 | ) | - | (399,094 | ) | (57,482 | ) | ||||||||||||||||
Impairment of long term investments | - | - | (18,240 | ) | (2,627 | ) | - | (18,240 | ) | (2,627 | ) | ||||||||||||||||
Operating loss | (64,112 | ) | (99,478 | ) | (556,677 | ) | (80,178 | ) | (118,964 | ) | (922,591 | ) | (132,881 | ) | |||||||||||||
Interest income | 1,940 | 1,627 | 261 | 38 | 4,618 | 4,669 | 672 | ||||||||||||||||||||
Interest expense | (2,473 | ) | (2,932 | ) | (2,091 | ) | (301 | ) | (13,158 | ) | (11,647 | ) | (1,678 | ) | |||||||||||||
Other income (expense) | 141 | 5,171 | (263 | ) | (38 | ) | 2,991 | 5,336 | 769 | ||||||||||||||||||
Foreign exchange gain, net | 4,845 | 915 | 8,015 | 1,154 | 13,164 | 14,209 | 2,047 | ||||||||||||||||||||
Loss before income taxes | (59,659 | ) | (94,697 | ) | (550,755 | ) | (79,325 | ) | (111,349 | ) | (910,024 | ) | (131,071 | ) | |||||||||||||
Income tax benefit (expense) | 22,861 | 384 | (21,805 | ) | (3,141 | ) | 22,614 | (4,229 | ) | (609 | ) | ||||||||||||||||
Net loss | (36,798 | ) | (94,313 | ) | (572,560 | ) | (82,466 | ) | (88,735 | ) | (914,253 | ) | (131,680 | ) | |||||||||||||
Net loss attributable to the noncontrolling interest | (44 | ) | (152 | ) | (463 | ) | (67 | ) | (44 | ) | (776 | ) | (112 | ) | |||||||||||||
Net loss attributable to the Company's shareholders | (36,754 | ) | (94,161 | ) | (572,097 | ) | (82,399 | ) | (88,691 | ) | (913,477 | ) | (131,568 | ) | |||||||||||||
Foreign currency translation | 249 | (196 | ) | (286 | ) | (41 | ) | 264 | (293 | ) | (42 | ) | |||||||||||||||
Unrealized holding gain on available-for-sale investments | 1,106 | 36 | - | - | 1,853 | 659 | 95 | ||||||||||||||||||||
Reclassification adjustments for gains included in net income | - | (3,741 | ) | - | - | - | (3,552 | ) | (512 | ) | |||||||||||||||||
Total other comprehensive income (loss), net of tax | 1,355 | (3,901 | ) | (286 | ) | (41 | ) | 2,117 | (3,186 | ) | (459 | ) | |||||||||||||||
Comprehensive loss | (35,443 | ) | (98,214 | ) | (572,846 | ) | (82,507 | ) | (86,618 | ) | (917,439 | ) | (132,139 | ) | |||||||||||||
Comprehensive loss attributable to the noncontrolling interest | (44 | ) | (152 | ) | (463 | ) | (67 | ) | (44 | ) | (776 | ) | (112 | ) | |||||||||||||
Comprehensive loss attributable to the Company's shareholders | (35,399 | ) | (98,062 | ) | (572,383 | ) | (82,440 | ) | (86,574 | ) | (916,663 | ) | (132,027 | ) | |||||||||||||
Loss per ordinary share: | |||||||||||||||||||||||||||
Basic | (0.09 | ) | (0.23 | ) | (1.36 | ) | (0.20 | ) | (0.22 | ) | (2.24 | ) | (0.32 | ) | |||||||||||||
Diluted | (0.09 | ) | (0.23 | ) | (1.36 | ) | (0.20 | ) | (0.22 | ) | (2.24 | ) | (0.32 | ) | |||||||||||||
Loss per ADS*: | |||||||||||||||||||||||||||
Basic | (1.45 | ) | (3.68 | ) | (21.76 | ) | (3.20 | ) | (3.49 | ) | (35.84 | ) | (5.12 | ) | |||||||||||||
Diluted | (1.45 | ) | (3.68 | ) | (21.76 | ) | (3.20 | ) | (3.49 | ) | (35.84 | ) | (5.12 | ) | |||||||||||||
Weighted average number of ordinary shares used in earnings per share computation: | |||||||||||||||||||||||||||
Basic | 404,344,939 | 412,253,323 | 421,522,374 | 421,522,374 | 407,149,509 | 408,189,722 | 408,189,722 | ||||||||||||||||||||
Diluted | 404,344,939 | 412,253,323 | 421,522,374 | 421,522,374 | 407,149,509 | 408,189,722 | 408,189,722 | ||||||||||||||||||||
* | Note1: 1 ADS = 16 shares | ||||||||||||||||||||||||||
Supplementary Metrics - Reconciliations of Non-GAAP to GAAP Financial Measures | |||||||||||||||||||||||||||||||||||||||
(amounts in thousands, except for percentages, number of shares, per share and per ADS data) | |||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||
Dec 31, 2015 | Sep 30, 2016 | Dec 31, 2016 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2016 | Dec 31, 2016 | |||||||||||||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||||||||||||||||
Adjusted EBITDA — defined as EBITDA before share-based compensation expense, foreign exchange gain, transaction tax on assets transfer, impairment of long lived assets and impairment of long term investments | |||||||||||||||||||||||||||||||||||||||
Net loss | (36,798 | ) | (94,313 | ) | (572,560 | ) | (82,466 | ) | (88,735 | ) | (914,253 | ) | (131,680 | ) | |||||||||||||||||||||||||
Depreciation | 40,872 | 38,653 | 38,090 | 5,486 | 153,313 | 155,225 | 22,357 | ||||||||||||||||||||||||||||||||
Amortization | 1,151 | 1,102 | 1,253 | 180 | 4,298 | 3,869 | 557 | ||||||||||||||||||||||||||||||||
Interest expense | 2,473 | 2,932 | 2,091 | 301 | 13,158 | 11,647 | 1,678 | ||||||||||||||||||||||||||||||||
Interest income | (1,940 | ) | (1,627 | ) | (261 | ) | (38 | ) | (4,618 | ) | (4,669 | ) | (672 | ) | |||||||||||||||||||||||||
Income tax (benefit) expense | (22,861 | ) | (384 | ) | 21,805 | 3,141 | (22,614 | ) | 4,229 | 609 | |||||||||||||||||||||||||||||
Share-based compensation | 18,259 | 8,601 | 2,685 | 387 | 48,606 | 85,025 | 12,246 | ||||||||||||||||||||||||||||||||
Foreign exchange gain | (4,845 | ) | (915 | ) | (8,015 | ) | (1,154 | ) | (13,164 | ) | (14,209 | ) | (2,047 | ) | |||||||||||||||||||||||||
Penalties on uncertain tax positions | 2,206 | - | 658 | 95 | 2,206 | 658 | 95 | ||||||||||||||||||||||||||||||||
Transaction tax on assets transfer | 5,394 | - | - | - | 27,733 | - | - | ||||||||||||||||||||||||||||||||
Impairment of long lived assets | - | - | 399,094 | 57,482 | - | 399,094 | 57,482 | ||||||||||||||||||||||||||||||||
Impairment of long term investments | - | - | 18,240 | 2,627 | - | 18,240 | 2,627 | ||||||||||||||||||||||||||||||||
Adjusted EBITDA | 3,911 | (45,951 | ) | (96,920 | ) | (13,959 | ) | 120,183 | (255,144 | ) | (36,748 | ) | |||||||||||||||||||||||||||
Margin% | 1.3 | % | (17.6 | %) | (36.8 | %) | (36.8 | %) | 8.9 | % | (24.2 | %) | (24.2 | %) | |||||||||||||||||||||||||
Adjusted net loss — defined as net loss before share-based compensation, foreign exchange gain (loss), penalties on uncertain tax positions, transaction tax on assets transfer, impairment of long lived assets and impairment of long term investments | |||||||||||||||||||||||||||||||||||||||
Net loss | (36,798 | ) | (94,313 | ) | (572,560 | ) | (82,466 | ) | (88,735 | ) | (914,253 | ) | (131,680 | ) | |||||||||||||||||||||||||
Share-based compensation | 18,259 | 8,601 | 2,685 | 387 | 48,606 | 85,025 | 12,246 | ||||||||||||||||||||||||||||||||
Foreign exchange gain | (4,845 | ) | (915 | ) | (8,015 | ) | (1,154 | ) | (13,164 | ) | (14,209 | ) | (2,047 | ) | |||||||||||||||||||||||||
Penalties on uncertain tax positions | 2,206 | - | 658 | 95 | 2,206 | 658 | 95 | ||||||||||||||||||||||||||||||||
Transaction tax on assets transfer | 5,394 | - | - | - | 27,733 | - | - | ||||||||||||||||||||||||||||||||
Impairment of long lived assets | - | - | 399,094 | 57,482 | - | 399,094 | 57,482 | ||||||||||||||||||||||||||||||||
Impairment of long term investments | - | - | 18,240 | 2,627 | - | 18,240 | 2,627 | ||||||||||||||||||||||||||||||||
Adjusted net loss | (15,784 | ) | (86,627 | ) | (159,898 | ) | (23,029 | ) | (23,354 | ) | (425,445 | ) | (61,277 | ) | |||||||||||||||||||||||||
Margin% | (5.1 | %) | (33.1 | %) | (60.7 | %) | (60.7 | %) | (1.7 | %) | (40.4 | %) | (40.4 | %) | |||||||||||||||||||||||||
Loss per ordinary share: | |||||||||||||||||||||||||||||||||||||||
Basic | (0.04 | ) | (0.21 | ) | (0.38 | ) | (0.05 | ) | (0.13 | ) | (1.04 | ) | (0.15 | ) | |||||||||||||||||||||||||
Diluted | (0.04 | ) | (0.21 | ) | (0.38 | ) | (0.05 | ) | (0.13 | ) | (1.04 | ) | (0.15 | ) | |||||||||||||||||||||||||
Loss per ADS: | |||||||||||||||||||||||||||||||||||||||
Basic | (0.64 | ) | (3.36 | ) | (6.08 | ) | (0.80 | ) | (2.01 | ) | (16.64 | ) | (2.40 | ) | |||||||||||||||||||||||||
Diluted | (0.64 | ) | (3.36 | ) | (6.08 | ) | (0.80 | ) | (2.01 | ) | (16.64 | ) | (2.40 | ) | |||||||||||||||||||||||||
Non-GAAP gross profit (loss) — defined as gross profit (loss) before share-based compensation expense | |||||||||||||||||||||||||||||||||||||||
Gross profit (loss) | 44,108 | 6,510 | (12,615 | ) | (1,816 | ) | 312,215 | (23,575 | ) | (3,395 | ) | ||||||||||||||||||||||||||||
Plus: Share-based compensation | 945 | 378 | 623 | 90 | 3,670 | 5,961 | 859 | ||||||||||||||||||||||||||||||||
Non-GAAP gross profit (loss) | 45,053 | 6,888 | (11,992 | ) | (1,726 | ) | 315,885 | (17,614 | ) | (2,536 | ) | ||||||||||||||||||||||||||||
Margin% | 14.5 | % | 2.6 | % | (4.6 | %) | (4.6 | %) | 23.3 | % | (1.7 | %) | (1.7 | %) | |||||||||||||||||||||||||
Non-GAAP operating expense — defined as operating expense before share-based compensation expense | |||||||||||||||||||||||||||||||||||||||
Sales & marketing expenses | 30,145 | 23,009 | 22,467 | 3,236 | 115,621 | 93,603 | 13,482 | ||||||||||||||||||||||||||||||||
Minus: Share-based compensation | (693 | ) | 131 | (7 | ) | (1 | ) | (2,882 | ) | (2,753 | ) | (397 | ) | ||||||||||||||||||||||||||
Non-GAAP sales & marketing expenses | 29,452 | 23,140 | 22,460 | 3,235 | 112,739 | 90,850 | 13,085 | ||||||||||||||||||||||||||||||||
% of net revenues | 9.5 | % | 8.8 | % | 8.5 | % | 8.5 | % | 8.3 | % | 8.6 | % | 8.6 | % | |||||||||||||||||||||||||
General & administrative expenses | 61,062 | 62,202 | 50,264 | 7,240 | 198,626 | 265,017 | 38,170 | ||||||||||||||||||||||||||||||||
Minus: Share-based compensation | (15,876 | ) | (8,092 | ) | (1,854 | ) | (267 | ) | (38,796 | ) | (72,483 | ) | (10,440 | ) | |||||||||||||||||||||||||
Non-GAAP general & administrative expenses | 45,186 | 54,110 | 48,410 | 6,973 | 159,830 | 192,534 | 27,730 | ||||||||||||||||||||||||||||||||
% of net revenues | 14.5 | % | 20.7 | % | 18.4 | % | 18.4 | % | 11.8 | % | 18.3 | % | 18.3 | % | |||||||||||||||||||||||||
Research & development expenses | 25,530 | 24,037 | 25,102 | 3,615 | 103,110 | 104,018 | 14,982 | ||||||||||||||||||||||||||||||||
Minus: Share-based compensation | (745 | ) | (262 | ) | (201 | ) | (29 | ) | (3,258 | ) | (3,828 | ) | (550 | ) | |||||||||||||||||||||||||
Non-GAAP research & development expenses | 24,785 | 23,775 | 24,901 | 3,586 | 99,852 | 100,190 | 14,432 | ||||||||||||||||||||||||||||||||
% of net revenues | 8.0 | % | 9.1 | % | 9.5 | % | 9.5 | % | 7.4 | % | 9.5 | % | 9.5 | % | |||||||||||||||||||||||||
Non-GAAP operating loss — defined as GAAP operating loss before share-based compensation expense, transaction tax on assets transfer, impairment of long lived assets and impairment of long term investments | |||||||||||||||||||||||||||||||||||||||
Operating loss | (64,112 | ) | (99,478 | ) | (556,677 | ) | (80,178 | ) | (118,964 | ) | (922,591 | ) | (132,881 | ) | |||||||||||||||||||||||||
Share-based compensation | 18,259 | 8,601 | 2,685 | 387 | 48,606 | 85,025 | 12,246 | ||||||||||||||||||||||||||||||||
Transaction tax on assets transfer | 5,394 | - | - | - | 27,733 | - | - | ||||||||||||||||||||||||||||||||
Impairment of long lived assets | - | - | 399,094 | 57,482 | - | 399,094 | 57,482 | ||||||||||||||||||||||||||||||||
Impairment of long term investments | - | - | 18,240 | 2,627 | - | 18,240 | 2,627 | ||||||||||||||||||||||||||||||||
Non-GAAP operating loss | (40,459 | ) | (90,877 | ) | (136,658 | ) | (19,682 | ) | (42,625 | ) | (420,232 | ) | (60,526 | ) | |||||||||||||||||||||||||
Margin% | (13.0 | %) | (34.7 | %) | (51.9 | %) | (51.9 | %) | (3.1 | %) | (39.9 | %) | (39.9 | %) | |||||||||||||||||||||||||
About ChinaCache International Holdings Ltd.
ChinaCache International Holdings Ltd. (Nasdaq:CCIH) is a leading total solutions provider of Internet content and application delivery services in China. As a carrier-neutral service provider, ChinaCache's network in China is interconnected with networks operated by all telecom carriers, major non-carriers and local Internet service providers. With more than a decade of experience in developing solutions tailored to China's complex Internet infrastructure, ChinaCache is a partner of choice for businesses, government agencies and other enterprises to enhance the reliability and scalability of online services and applications and improve end-user experience. For more information on ChinaCache, please visit ir.chinacache.com.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the revenue guidance and quotations from management in this announcement, as well as ChinaCache's strategic and operational plans, contain forward-looking statements. ChinaCache may also make written or oral forward-looking statements in its reports filed 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. 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 statements, including but not limited to the following: the Company's goals and strategies, expansion plans, the expected growth of the content and application delivery services market, the Company's expectations regarding keeping and strengthening its relationships with its customers, and the general economic and business conditions in the regions where the Company provides its solutions and services. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and ChinaCache undertakes no duty to update such information, except as required under applicable law.
For investor and media inquiries please contact:
Investor Relations Department
ChinaCache International Holdings
Tel: +86 10 6408 5306
Email: ir@chinacache.com
Mr. Ross Warner
The Piacente Group | Investor Relations
Tel: +86 10 5730-6200
Email: chinacache@tpg-ir.com
Ms. Brandi Piacente
The Piacente Group | Investor Relations
Tel: +1 212-481-2050
Email: chinacache@tpg-ir.com