About China Cache

Press Release

<< Back
August 15, 2011
ChinaCache International Holdings Ltd. Announces Second Quarter 2011 Financial Results

BEIJING, Aug. 15, 2011 (GLOBE NEWSWIRE) -- ChinaCache International Holdings Ltd. ("ChinaCache" or the "Company") (Nasdaq:CCIH), the leading provider of Internet content and application delivery services in China, today announced its unaudited interim condensed consolidated financial results for the Company's second quarter ended June 30, 2011.

Highlights for the Second Quarter of 2011

  • Net revenues in the second quarter were RMB148.4 million (US$23.0 million), representing a 8.8% increase from the previous quarter, and 57.2% increase from the corresponding period in 2010.
  • Operating profit in the second quarter was RMB0.9 million (US$0.1 million), compared to an operating income of RMB5.3 million in the first quarter of 2011 and loss of RMB1.2 million in the corresponding period in 2010.
  • Adjusted EBITDA (Non-GAAP) was RMB31.1 million (US$4.8 million), a 5.7% increase from the previous quarter and 12.1% increase from the corresponding period in 2010.
  • Net loss in the second quarter was RMB5.7 million (US$0.9 million), compared to net income of RMB 3.2 million in the first quarter and RMB10.7 million in the corresponding period in 2010.
  • Adjusted net income (Non-GAAP) was RMB10.6 million (US$1.6 million) in the second quarter, compared to RMB 11.7 million in the first quarter and RMB25.2 million in the corresponding period in 2010.

"We are delighted to report another strong quarter with revenues up by 57.2% from the second quarter last year," said Mr. Song Wang, co-founder, Chairman and Chief Executive Officer of ChinaCache. "We continued to solidify ChinaCache's industry leading position, expanding market share and acquiring clients across each of our business verticals."

"While China's Internet industry is experiencing explosive traffic growth, the penetration rate of CDN services is still very low compared to mature markets," Mr. Wang continued. "As Chinese companies grow in size and sophistication, we expect to see increasing numbers of customers choosing to save resources and improve end-user service by leveraging outsourced CDN services. I am confident that with China's largest and most advanced content delivery network, ChinaCache is well positioned to be the long term industry leader."

Ms. Jackie You Kazmerzak, Chief Financial Officer of ChinaCache, said, "We were encouraged by the continuing strong top-line growth this quarter. Our ability to maintain strong ASPs this quarter in the face of competition demonstrates that customers acknowledge the value of partnering with the recognized leader in China's CDN industry. To further strengthen our core competencies in anticipation of strong industry growth, we plan to accelerate our planned investment in expanding our network reach, our talent pool and our technology repertoire."

Financial Results for the Second Quarter of 2011

Net revenues for the second quarter 2011 were RMB148.4 million (US$23.0 million), representing an 8.8% increase from the first quarter of 2011 and a 57.2% increase from the corresponding period in 2010.

Cost of revenues for the quarter increased by 10.2% quarter-over-quarter and 60.1% year-over-year to RMB102.9 million (US$15.9 million), primarily due to the purchase of more bandwidth to prepare for business in the pipeline. Cost of revenues as a percentage of net revenues was 69.3%, compared to 68.1% in the corresponding period in 2010. Non-GAAP gross profit as a percentage of net revenues, which excludes share-based compensation and depreciation and amortization expenses, was 42.0%, compared to 43.5% in the first quarter and 49.6% in the corresponding period in 2010.

Sales and marketing expenses for the quarter increased by 24.3% from the previous quarter to RMB17.3 million (US$2.7 million) and increased by 1.4% year-over-year. Non-GAAP sales and marketing expenses, which exclude share-based compensation expenses, were RMB14.7 million (US$2.3 million), a 20.3% increase from the previous quarter and 24.0% increase from the corresponding period in 2010.

General and administrative expenses for the quarter decreased by 20.8% over the previous quarter to RMB12.2 million (US$1.9 million) primarily due to certain professional fees associated with the Company's aborted follow-on offering in the first quarter of 2011, and increased by 45.3% year-over-year primarily due to the costs associated with being a public company. Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, were RMB9.4 million (US$1.5 million), a 15.9% decrease from the previous quarter and 126.4% increase from the corresponding period in 2010.

Research and development expenses for the quarter increased by 17.7% over the previous quarter to RMB9.1 million (US$1.4 million) and increased by 56.3% year-over-year. Non-GAAP research and development expenses, which exclude share-based compensation expenses, were RMB7.9 million (US$1.2 million), a 13.9% increase from the previous quarter and 125.5% increase from the corresponding period in 2010.

Total share-based compensation expenses, which were allocated to related costs of revenues and operating expense line items, were RMB7.7 million (US$1.2 million) in the second quarter of 2011, compared to RMB7.4 million in the previous quarter and RMB14.2 million in the corresponding period in 2010.

Operating profit was RMB0.9 million (US$0.1 million) in the second quarter of 2011, compared to an operating profit of RMB5.3 million in the previous quarter and an operating loss of RMB1.2 million in the corresponding period in 2010. The expense of RMB6.0million on post-acquisition settlement consideration was accrued for during the quarter and results from a revaluation of contingent liabilities as JNET's performance turned out better than expected, which caused the Company to adjust upward its future performance projections. Non-GAAP operating profit, which excludes share-based compensation expenses and post-acquisition settlement consideration, was RMB14.6 million (US$2.3 million), a 9.3% increase from RMB13.4 million in the first quarter and an 11.9% increase from RMB13.0 million in the corresponding period in 2010. Non-GAAP operating margin, which represents non-GAAP operate profit as a percentage to total net revenues, for the quarter was 9.8%, compared to 13.8% in the corresponding period in 2010.

Income tax expense was RMB3.5 million (US$0.5 million) in the second quarter of 2011, compared to income tax expense of RMB0.3 million in the first quarter of 2011 and income tax benefit of RMB 12.9 million in the corresponding period in 2010. The main cause was a reversal of deferred tax assets during the current period as some of the Company's subsidiaries turned profitable during the quarter.

Net loss was RMB5.7 million (US$0.9 million) in the second quarter of 2011, compared to a net income of RMB3.2 million in the first quarter of 2011 and a net income of RMB10.7 million in the corresponding period in 2010. Basic and diluted net loss per American Depositary Share ("ADS") for the second quarter of 2011 was RMB0.23(US$0.04) and RMB0.23(US$0.04), respectively. Each ADS represents 16 ordinary shares of the Company.

Adjusted net income (Non-GAAP), defined as net income before share-based compensation expenses, foreign exchange loss or gain, penalties on uncertain tax positions and post-acquisition settlement consideration, was RMB10.6million (US$1.6 million), compared to an adjusted net income of RMB11.7 million in the first quarter of 2011 and RMB25.2 million in the corresponding period in 2010. Non-GAAP basic and diluted earnings per ADS for the second quarter of 2011 amounted to RMB0.44(US$0.07) and RMB0.42(US$0.07), respectively.

Adjusted EBITDA (Non-GAAP), defined as EBITDA excludes share-based compensation expenses, foreign exchange loss or gain, penalties on uncertain tax positions and post acquisition settlement consideration, was RMB31.1million (US$4.8 million), compared to an adjusted net income of RMB29.5 million in the first quarter of 2011 and RMB27.8 million in the corresponding period in 2010.

Capital Resources

As of June 30, 2011, the Company had cash and cash equivalents of RMB446.0 million (US$69.0million).  In addition, the Company had an investment amounting to RMB97.8 million (US$15.1 million) in an RMB denominated short term fixed income fund which is accounted for as Available-for-Sale-Investment under Non-current Assets. The capital expenditures for the second quarter of 2011 were RMB1.8 million (US$0.3 million).

Under the share repurchase program announced in late June 2011, as of the market close on August 10, 2011, ChinaCache had repurchased 374,129 ADSs for approximately US$3.0 million. The Company currently has approximately 24 million ADSs outstanding.

Financial Results for the First Six Months of 2011

Net revenues in the first six months of 2011 were RMB284.8 million (US$44.1 million), representing a 67.2% increase from the corresponding period in 2010.

Cost of revenues in the first six months of 2011 increased by 65.7% year-over-year to RMB196.3 million (US$30.4 million), primarily due to the purchase of more bandwidth, collocation and storage facilities,increase of depreciation and increased staff cost. Cost of revenues as a percentage of net revenues was 68.9% compared to 69.6% in the corresponding period in 2010. Non-GAAP cost of revenues as a percentage of net revenues, which exclude the effects of share-based compensation expenses, was 68.3% in the first six months of 2011, compared to 67.4% in the corresponding period 2010.

Sales and marketing expenses in the first six months of 2011 were RMB31.2 million (US$4.8 million), representing an increase of 12.9% from the previous year, mainly due to the increase in personnel related expenses and marketing expenses. Non-GAAP sales and marketing expenses, which excluded share-based compensation expenses, were RMB26.9 million (US$4.2 million), a 36.1% increase from the previous year.

General and administrative expenses in the first six months of 2011 were RMB27.6 million (US$4.3 million), representing an increase of 65.3% from the previous year. Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, were RMB20.5 million (US$3.2 million) in 2011, a 101.4% increase from the previous year.

Research and development expenses in the first six months of 2011 were RMB16.8 million (US$2.6 million), representing an increase of 62.6% from the previous year. Non-GAAP research and development expenses, which exclude share-based compensation expenses, were RMB14.9 million (US$2.3 million), a 117.0% increase from the previous year.

Total share-based compensation expenses in the first six months of 2011, which were allocated to related costs of revenues and operating expense line items, were RMB 15.1 million (US$2.3 million), compared to RMB21.5 million in the previous year.

Operating profit in the first six months of 2011 was RMB6.2 million (US$1.0 million), as compared to a loss of RMB33.5 million in the corresponding period in 2010. Non-GAAP operating profit, which excludes share-based compensation expenses and post-acquisition settlement consideration, was RMB27.9 million (US$4.3 million), compared to RMB18.7 million in the first six months of 2010.

Income tax expense in the first six months of 2011 was RMB3.9 million (US$0.6 million), compared to income tax benefit of RMB11.8 million in the previous year.

Net Loss in the first six months of 2011 was RMB2.5 million (US$0.4 million), compared to a net loss of RMB24.2 million in 2010. Basic and diluted loss per ADS for the first six months in 2011 were RMB0.10(US$0.02) and RMB0.10(US$0.02), respectively.

Adjusted net income (Non-GAAP) was RMB22.3 million (US$3.4 million) in 2011, compared to an adjusted net income of RMB28.6 million in the first six months in 2010. Non-GAAP basic earnings per ADS for the first six months of 2011 amounted to RMB0.92(US$0.14)

Adjusted EBITDA (Non-GAAP) was RMB60.6 million (US$9.4 million) in the first six months of 2011, representing a 25.5% increase from the previous year.

Outlook for the Company's Third Quarter of 2011

ChinaCache currently expects to generate total net revenues in an amount ranging from RMB155 million(US$24 million) to RMB160 million (US$25 million) for the third quarter of 2011, representing a 42% to 47% year-over-year increase from the corresponding period of 2010, a 4.4% to 7.8% quarter-over-quarter increase from the previous quarter.  This forecast reflects ChinaCache's current and preliminary view, which is subject to change.

Conference Call Information

The Company has scheduled a corresponding conference call and live webcast to discuss the results at 8:30 PM Eastern Daylight Time (EDT) on August 15, 2011, which corresponds to 8:30 AM Beijing time on August 16, 2011.

The dial-in details for the live conference call are as follows:

  • U.S. toll free number: +1 (866) 405-2350
  • Hong Kong dial-in number: +852 2561-8854
  • International dial-in number: +65 6723-9388
  • Conference ID: 8624-1166

A live and archived webcast of the conference call will be available on the Investor Relation section of ChinaCache's website at www.ChinaCache.com.

A replay of the conference call will also be available until August 22, 2011 by dialing:

  • International dial-in number: +61 (2) 8235-5000
  • Conference ID: 8624-1166

About ChinaCache International Holdings Ltd.

ChinaCache International Holdings Ltd. (Nasdaq:CCIH) is the leading 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 www.chinacache.com.

*Use of Non-GAAP Financial Measures

In evaluating its business, ChinaCache 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: non-GAAP cost of revenues, non-GAAP gross profit, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP research and development expenses, non-GAAP operating profit, adjusted net income (non-GAAP), EBITDA and adjusted EBITDA (non-GAAP).  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.

To present non-GAAP cost of revenues, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses and non-GAAP research and development expenses, the Company excludes share-based compensation expenses.

To present non-GAAP gross profit, the Company excludes depreciation and amortization expenses and share-based compensation expenses.

To present non-GAAP operating profit, the Company excludes share-based compensation expenses and post acquisition settlement consideration.

The Company defines adjusted net income as net income (loss) before share-based compensation expenses, foreign exchange loss or gain, penalties on uncertain tax positions and post acquisition settlement consideration.

The Company uses EBITDA to assist in reconciliation to adjusted EBITDA.  The Company defines EBITDA as net income (loss) before interest expense, interest income, income tax expense, depreciation and amortization.  The Company defines adjusted EBITDA as EBITDA plus share-based compensation expenses, foreign exchange loss or gain, penalties on uncertain tax positions and post acquisition settlement consideration and other expenses that the Company does not consider reflective of its ongoing operations.  The Company believes that the use of adjusted EBITDA facilitates investors' use of operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in items such as capital structures (affecting relative interest expense and share-based compensation expense), the book amortization of intangibles (affecting relative amortization expense), the age and book value of facilities and equipment (affecting relative depreciation expense) and other non-cash expenses.  The Company also presents adjusted EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a measure of the financial performance of companies in its industry.

Those non-GAAP financial measures are not defined under U.S. GAAP and are not measures presented in accordance with U.S. GAAP.  Those non-GAAP financial measures have limitations as analytical tools, and when assessing the Company's operating performance, investors should not consider them in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP.  Some of these limitations include, but are not limited to:

  • Adjusted net income, EBITDA and Adjusted EBITDA do not reflect the Company's cash expenditures or future requirements for capital expenditures or contractual commitments;
  • they do not reflect changes in, or cash requirements for, the Company's working capital needs;
  • they do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on the Company's debt;
  • they do not reflect income taxes or the cash requirements for any tax payments;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted net income, EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
  • while share-based compensation is a component of cost of revenues and operating expenses, the impact on the Company's financial statements compared to other companies can vary significantly due to such factors as assumed life of the options and assumed volatility of the Company's ordinary shares; and
  • other companies may calculate Adjusted net income, EBITDA and Adjusted EBITDA differently than the Company does, limiting their usefulness as comparative measures.

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader.  Unless otherwise noted, all translations from RMB to U.S. dollar are based on the effective exchange rate of 6.4635 as of June 30, 2011.

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. 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. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 20F for the fiscal year 2010, as filed with the Securities and Exchange Commission on April 21, 2011, and are available on the Securities and Exchange Commission's website at www.sec.gov.  For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations and prospects, see "Risk Factors" beginning on page 5 of our annual report for fiscal year 2010.  Our actual results of operations for the second quarter of 2011 are not necessarily indicative of our operating results for any future periods.  Statements that are not historical facts, including statements about ChinaCache's beliefs and expectations, are forward-looking statements. Among other things, the outlook for the third quarter of 2011 and quotations from management in this announcement, as well as ChinaCache's strategic and operational plans, contain 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 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 our relationships with its customers, and the general economic and business conditions in the regions where the Company provide 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.

FINANCIAL TABLES

  • Unaudited Condensed Consolidated Balance Sheets
  • Unaudited Condensed Consolidated Statements of Operations 
  • Supplementary Financial Data
  • Supplementary Operating Metrics
  • Reconciliations of Non-GAAP to GAAP Financial Measures
       
Condensed Consolidated Balance Sheets
(amounts in thousands)
       
       
  As of March 31 As of June 30 As of June 30
  2011 2011  2011 
   RMB   RMB   US$ 
  (Unaudited) (Unaudited) (Unaudited)
 ASSETS       
Current assets      
 Cash and cash equivalents   579,794  446,010 69,004
 Accounts receivable, net   119,464  165,153 25,552
 Prepaid expenses and other current assets   14,756  22,082 3,416
 Deferred tax assets   3,902  4,058 628
 Amount due from related parties   49,954  48,654 7,528
 Total current assets  767,870 685,957 106,128
       
 Non-current assets       
 Available-for-sale investments   --  99,149 15,340
 Property & equipment,net   168,860  155,614 24,076
 Acquired intangible assets, net   325  95 15
 Goodwill   16,989  16,989 2,628
 Deferred tax assets   7,809  4,141 641
 Long-term deposits   2,872  3,041 470
 Total non-current assets  196,855 279,029 43,170
       
       
 Total Assets  964,725 964,986 149,298
       
 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)     
 Current Liabilities       
 Accounts payable   53,322  72,568  11,227
 Accrued employee benefits   25,812  26,613  4,117
 Accrued expenses and other payables   63,880  49,284  7,625
 Income tax payable   36,958  29,417  4,551
 Liabilities for uncertain tax positions   25,724  27,236  4,214
 Deferred tax liabilities   79  24  4
 Dividend payable   130  130  20
 Amounts due to related parties   53,200  57,705  8,928
 Share-base compensation liability   --  --  --
 Current portion of capital lease obligations   9,823  8,182  1,266
 Total current liabilities  268,928 271,159 41,952
       
 Non-current liabilities       
 Deferred tax liabilities   2  --  --
 Non-current portion of capital lease obligations   1,034  999  155
 Amounts due to related parties   5,166  5,792  896
 Total non-current liabilities  6,202 6,791 1,051
       
 Total Liabilities   275,130  277,950 43,003
       
 Total Shareholders' equity (deficit)  689,595  687,036  106,295
       
 TOTAL LIABILITIES, MEZZANINE EQUITY & SHAREHOLDERS' EQUITY (DEFICIT)  964,725 964,986 149,298
       
 
Condensed Consolidated Statements of Operations
(amounts in thousands, except for number of shares, per share and per ADS data)
         
         
   
  For the Three Months Ended
  June 30, 2010 March 31, 2011 June 30, 2011 June 30, 2011
  RMB RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
         
Net revenues 94,419 136,359 148,413 22,962
Cost of revenues (64,284) (93,398) (102,914) (15,922)
         
Gross profit 30,135 42,961 45,499 7,040
Sales & marketing expenses (17,073) (13,926) (17,304) (2,677)
General & administrative expenses (8,393) (15,403) (12,195) (1,887)
Research & development expenses (5,812) (7,721) (9,084) (1,405)
Post-acquisition settlement consideration (20) (634) (6,024) (932)
         
Operating income/(loss) (1,163) 5,277 892 139
Interest income 62 443 809 125
Interest expense (898) (1,237) (1,233) (191)
Other expense (265) (836) (668) (103)
Foreign exchange gain/(loss), net 12 (104) (1,934) (299)
         
Income/(loss) before income tax (2,252) 3,543 (2,134) (329)
Income tax (expense)/benefit 12,948 (343) (3,546) (549)
         
Net income/(loss) 10,696 3,200 (5,680) (878)

       
Accretion of redeemable convertible preferred shares to redemption value (15,710)  --   --   -- 
Effect of foreign exchange rate movement of redeemable convertible preferred shares  2,666  --   --   -- 

       
Net income/(loss) attributable to ordinary shareholders (2,348) 3,200 (5,680) (878)

       
Earnings/(loss) per ordinary share:        
Basic (0.03) 0.01 (0.01) (0.00)
Diluted (0.03) 0.01 (0.01) (0.00)
         
Earnings/(loss) per ADS:        
Basic (0.44) 0.13 (0.23) (0.04)
Diluted (0.44) 0.13 (0.23) (0.04)
         
Weighted average number of ordinary shares used in earnings/(loss) per share computation:    
Basic 84,475,892 385,843,484 388,305,437 388,305,437
Diluted 84,475,892 403,040,025 388,305,437 388,305,437
         
Pro forma earnings/(loss) per ordinary share (unaudited):        
Basic 0.04 n/a n/a n/a
Diluted 0.04 n/a n/a n/a
         
Pro forma earnings/(loss) per ADS (unaudited):        
Basic 0.59 n/a n/a n/a
Diluted 0.59 n/a n/a n/a
         
Weighted average number of ordinary shares used in pro forma earnings/(loss) per share computation (unaudited):
Basic 290,041,317 n/a n/a n/a
Diluted 290,041,317 n/a n/a n/a
 
Supplementary Financial Data
(amounts in thousands, except for percentages)
         
   
  For the Three Months Ended
  June 30, 2010 March 31, 2011 June 30, 2011 June 30, 2011
  RMB RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
         
Cost of revenues breakdown:        
Bandwidth, co-location and storage fees  42,407  71,944  80,093 12,392
Depreciation of network equipment and amortization of acquired intangible assets  13,920  15,689  15,706 2,430
Payroll and other compensation costs of network operations personnel  5,929  3,522  4,129 639
Other cost of revenues  2,028  2,243  2,986 462
Total cost of revenues  64,284  93,398  102,914 15,923
         
Allocation of share-based compensation expenses:      
Cost of revenues  2,415  716  1,091 169
Sales and marketing expenses  5,220  1,711  2,606 403
General and administrative expenses  4,255  4,258  2,827 437
Research and development expenses  2,294  756  1,152 178
Total share-based compensation expenses  14,184  7,441  7,676 1,187
         
Depreciation and amortization expenses:        
Cost of revenues  14,324  15,689  15,706 2,430
Sales and marketing expenses  185  253  158 24
General and administrative expenses  192  203  219 34
Research and development expenses  44  495  516 80
Total depreciation and amortization expenses  14,745  16,640  16,599 2,568
         
Capital expenditures, related to additions of property and equipment  12,306  16,336  1,790 277
As a percentage of net revenues 13.0% 12.0% 1.2% 1.2%
 
Supplementary Operating Metrics
(Unaudited)
             
             
   
  For the Three Months Ended
  Mar 31, 2010 Jun 30, 2010 Sep 30, 2010 Dec 31, 2010 Mar 31, 2011 Jun 30, 2011
             
Revenues breakdown by industry verticals            
             
Internet and software 30% 26% 23% 20% 21% 23%
Mobile internet 16% 15% 18% 21% 19% 16%
Media and entertainment 24% 29% 29% 30% 31% 31%
Enterprises and e-commerce 25% 26% 27% 25% 26% 27%
Government agencies 5% 4% 3% 4% 3% 3%
Total 100% 100% 100% 100% 100% 100%
             
Revenue contributed by Top 5 customers as a percentage of net revenues 35% 32% 33% 37% 37% 33%
             
Number of active customers at period end 319 418 454 504 569 617
             
Number of employees at period end 245 289 319 345 408 442
             
 
Supplementary Metrics - Reconciliations of Non-GAAP to GAAP Financial Measures
(amounts in thousands of RMB, except for percentages, number of shares, per share and per ADS data)
(Unaudited)
       
   
  For the Three Months Ended
  June 30, 2010 March 31, 2011 June 30, 2011
  RMB RMB RMB
       
Adjusted EBITDA — defined as EBITDA before share-based compensation expense, foreign exchange loss or gain, penalty on uncertain tax positions, post acquisition settlement consideration and impairment of goodwill,if any, and acquired intangible assets      
       
Net income /(loss)  10,696  3,200  (5,680)
Depreciation  14,051  16,410  16,369
Amortization  694  230  230
Interest expense  898  1,237  1,233
Interest income  (62)  (443)  (809)
Income tax expense/(benefit)  (12,948)  343  3,546
Share-based compensation  14,184  7,441  7,676
Foreign exchange (gain) / loss  (12)  104  1,934
Penalties on uncertain tax positions  263  314  624
Post acquisition settlement consideration  20  634  6,024
Adjusted EBITDA  27,784  29,470  31,147
Margin% 29.4% 21.6% 21.0%
QoQ growth   -3.8% 5.7%
YoY growth   43.7% 12.1%
       
Adjusted net income — defined as net income before share-based compensation expense, foreign exchange loss or gain, penalty on uncertain tax positions, post acquisition settlement consideration and impairment of goodwill, if any, and acquired intangible assets      
       
Net income / (loss)  10,696  3,200  (5,680)
Share-based compensation  14,184  7,441  7,676
Foreign exchange (gain) / loss  (12)  104  1,934
Penalties on uncertain tax positions  263  314  624
Post acquisition settlement consideration  20  634  6,024
Adjusted net income  25,151  11,693  10,578
Margin% 26.6% 8.6% 7.1%
QoQ growth   -33.3% -9.5%
YoY growth   235.6% -57.9%
       
Non-GAAP gross profit — defined as gross profit before share-based compensation expense and depreciation and amortization      
       
Gross profit  30,135  42,961  45,499
Plus: depreciation and amortization  14,324  15,689  15,706
Plus: Share-based compensation  2,415  716  1,091
Non-GAAP gross profit  46,874  59,366  62,296
Margin% 49.6% 43.5% 42.0%
QoQ growth   6.7% 4.9%
YoY growth   58.8% 32.9%
       
Non-GAAP cost of revenues — defined as cost of revenues before share-based compensation expense      
       
Cost of revenues  64,284  93,398  102,914
Minus: Share-based compensation  (2,415)  (716)  (1,091)
Non-GAAP cost of revenues  61,869  92,682  101,823
% of net revenues 65.5% 68.0% 68.6%
QoQ growth   11.0% 9.9%
YoY growth   75.0% 64.6%
       
       
       
Supplementary Metrics - Reconciliations of Non-GAAP to GAAP Financial Measures
(amounts in thousands of RMB, except for percentages, number of shares, per share and per ADS data)
(Unaudited)
   
  For the Three Months Ended
  June 30, 2010 March 31, 2011 June 30, 2011
Non-GAAP operating expenses — defined as operating expenses before share-based compensation expense      
       
Sales & marketing expenses  17,073  13,926  17,304
Minus: Share-based compensation  (5,220)  (1,711)  (2,606)
Non-GAAP sales & marketing expenses  11,853  12,215  14,698
% of net revenues 12.6% 9.0% 9.9%
QoQ growth   -24.4% 20.3%
YoY growth   54.2% 24.0%
       
General & administrative expenses  8,393  15,403  12,195
Minus: Share-based compensation  (4,255)  (4,258)  (2,827)
Non-GAAP general & administrative expenses  4,138  11,145  9,368
% of net revenues 4.4% 8.2% 6.3%
QoQ growth   39.2% -15.9%
YoY growth   84.3% 126.4%
       
Research & development expenses  5,812  7,721  9,084
Minus: Share-based compensation  (2,294)  (756)  (1,152)
Non-GAAP research & development expenses  3,518  6,965  7,932
% of net revenues 3.7% 5.1% 5.3%
QoQ growth   14.1% 13.9%
YoY growth   108.0% 125.5%
       
Non-GAAP operating profit/(loss) — defined as GAAP operating profit/(loss) before share-based compensation expense and post acquisition settlement consideration      
       
Operating income / (loss)  (1,163)  5,277  892
Plus: Share-based compensation  14,184  7,441  7,676
Plus: Post acquisition settlement consideration  20  634  6,024
Non-GAAP operating profit  13,041  13,352  14,592
Margin% 13.8% 9.8% 9.8%
QoQ growth   30.8% 9.3%
YoY growth   136.4% 11.9%
       
       
Non-GAAP basic and diluted earnings per share and basic and diluted earnings per ADS is calculated based upon adjusted net income divided by weighted average number of ordinary shares      
       
Adjusted net income  25,151  11,693  10,578
Weighted average number of ordinary shares used in earnings per share computation:      
Basic  84,475,892  358,843,484 388,305,437
Diluted  84,475,892  403,040,025 402,645,843
Earnings per ordinary share:      
Basic 0.30 0.03 0.03
Diluted 0.30 0.03 0.03
Earnings per ADS:      
Basic 4.76 0.48 0.44
Diluted 4.76 0.46 0.42
CONTACT:  For investor and media inquiries please contact:

          Ms. Yue YU

          Brunswick Group LLP

          Tel:  +86 (10) 6566-2256

          Email: chinacache@brunswickgroup.com



          Ms. Cindy ZHENG

          Brunswick Group LLP

          Tel: +1 (212) 333-3810

          Email: chinacache@brunswickgroup.com
Source: ChinaCache International Holdings Ltd.

News Provided by Acquire Media