UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 


 

For the month of March 2017

 


 

Commission File Number: 001-34873

 

ChinaCache International Holdings Ltd.

 

Section A, Building 3, Dian Tong Creative Square
No. 7 Jiuxianqiao North Road, Chaoyang District
Beijing, 100015
The People’s Republic of China

+86 10 6437 3399

(Address, including zip code, and telephone number, including area code, of Registrant’s
principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F        x              Form 40-F        o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

ChinaCache International Holdings Ltd.

 

 

 

 

 

 

 

By

:

/s/ Song Wang

 

Name:

:

Song Wang

 

Title:

:

Chairman and Chief Executive Officer

 

Date:   March 29, 2017

 

2



 

Exhibit Index

 

Exhibit 99.1 — Press Release

 

3


Exhibit 99.1

 

ChinaCache International Holdings Ltd. Announces

 

Fourth Quarter and Full Fiscal Year 2016 Financial Results

 

- Full Year Net Revenues Reached RMB1.05 Billion, Meeting Guidance -

 

BEIJING, March 27, 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 announced its unaudited condensed consolidated financial results for the fourth quarter and full fiscal year ended December 31, 2016.

 

“We achieved success in stabilizing our core business in the second half of the year, despite continued challenges from HPCC platform issues in the first half of 2016. During the third and fourth quarters of 2016, we improved the performance of our CDN platforms, launched our Internet exchange business, began offering total solution products, and reorganized the Company for better efficiency,” said Mr. Song Wang, Chairman and Chief Executive Officer of ChinaCache. “In particular, we established several Internet exchange centers in Beijing, Shanghai and Guangzhou, and are planning on more expansions in other major cities in China. These are expected to become integral to our total solution offering. In addition to our R&D efforts in selected technologies, including big data analysis, cloud exchange platforms and CDNs for the IoT industry, we also continued to improve our HPCC platform and upgrade our network hardware. Our turnaround initiatives are well underway, and we ended the year with full year 2016 net revenues of RMB1.05 billion, meeting our previous guidance.”

 

“Our strategy is to capitalize on our strengths by integrating our resources to provide a unique, three-layer structured network total solution package that clearly distinguishes ChinaCache as the provider of choice,” said Mr. Song Wang. “Combined with our well diversified products and strong customer relationships, this strategy will enable ChinaCache to compete favorably in our designated markets. Our recent cooperation with PacketZoom, the Silicon Valley-based leading mobile acceleration technology provider, further attests to the markets’ recognition of our compelling value proposition built over fifteen years of proven experience. We anticipate 2017 to be a year of gradual recovery and development,” Mr. Wang continued.

 

“Finally, I’d like to take this opportunity to announce the hiring of Ms. Cynthia Jinhong Meng as Chief Strategy Officer and senior VP at ChinaCache. We believe Ms. Meng’s experience and expertise strongly compliments our management team and will add value to the company’s strategic initiatives,” concluded Mr. Wang.

 

Ms. Meng has 18 years of TMT industry experience in equity research and strategy consulting for Chinese and global TMT companies. Prior to joining ChinaCache, she worked for Jefferies and BofA Merrill Lynch as head of the TMT research team and led the coverage of Chinese technology, Internet and telecom companies. She received an MBA from the Kellogg Graduate School of Management at Northwestern University and completed executive education at Stanford GSB.

 

Fourth Quarter Financial Summary:

 

·                       Net revenues were RMB263.3 million (US$37.9 million), compared with RMB311.4 million in the fourth quarter 2015.

·                       Gross profit was RMB5.7 million (US$0.8 million), compared with RMB44.1 million in the fourth quarter 2015.

·                       Adjusted EBITDA (non-GAAP) was a loss of RMB78.6 million (US$11.3 million),

 



 

compared with an adjusted EBITDA (non-GAAP) of RMB3.9 million in the fourth quarter 2015.

·                       Net loss attributable to ordinary shareholders was RMB155.2 million (US$22.4 million), compared with a net loss of RMB36.8 million in the fourth quarter 2015.

 

Full Year Financial Summary:

 

·                       Net revenues were RMB1.1 billion (US$151.8 million), compared with RMB1.4 billion in 2015.

·                       Gross loss was RMB5.3 million (US$0.8 million), compared with a gross profit of RMB312.2 million in 2015.

·                       Adjusted EBITDA (non-GAAP) was a loss of RMB236.9 million (US$34.1 million), compared with an adjusted EBITDA (non-GAAP) of RMB120.2 million in 2015.

·                       Net loss attributable to ordinary shareholders was RMB496.9 million (US$71.6 million), compared with a net loss of RMB88.7 million in 2015.

 

Fourth Quarter 2016 Financial Results

 

Net revenues for the fourth quarter of 2016 were RMB263.3 million (US$37.9 million), a 0.6% increase from the previous quarter and a 15.5% decrease from the corresponding period in 2015. The sequential revenue stabilization in the fourth quarter of 2016 was largely due to improved performance of the HPCC platform, partially offset by increased competition.

 

Cost of revenues for the fourth quarter increased by 1.0% quarter-over-quarter and decreased by 3.6% year-over-year to RMB257.7 million (US$37.1 million).

 

Gross margin was 2.2%, compared with 2.5% in the previous quarter and 14.2% in the corresponding period in 2015. Non-GAAP gross margin, which excludes share-based compensation, was 2.4%, compared with 2.6% in the third quarter and 14.5% in the corresponding period in 2015.

 

Sales and marketing expenses for the fourth quarter of 2016 were RMB22.5 million (US$3.2 million), or 8.5% of net revenues, representing a 2.4% decrease over the previous quarter and a 25.5% decrease from the corresponding period in 2015.

 

General and administrative expenses for the fourth quarter of 2016 were RMB50.3 million (US$7.2 million), or 19.1% of net revenues, representing a 19.2% decrease from the previous quarter and a 17.7% decrease from the corresponding period in 2015. The Company will continue to work to reduce costs and improve efficiency.

 

Research and development (R&D) expenses for the fourth quarter of 2016 were RMB25.1 million (US$3.6 million), or 9.5% of net revenues, representing a 4.4% increase from the previous quarter and a 1.7% decrease from the corresponding period in 2015.

 

Operating loss was RMB139.3 million (US$20.1 million) in the fourth quarter of 2016, compared with an operating loss of RMB99.5 million in the previous quarter and an operating loss of RMB64.1 million in the corresponding period in 2015. Non-GAAP operating loss, which excludes share-based compensation expenses, transaction tax on assets transfer and impairment of long term investments, was RMB118.4 million (US$17.0 million), compared with a non-GAAP operating loss of RMB90.9 million in the third quarter of 2016 and a non-GAAP operating loss of RMB40.5 million in the fourth quarter of 2015.

 

Income tax expense was RMB21.8 million (US$3.1 million) in the fourth quarter of 2016, compared with an income tax benefit of RMB0.4 million in the third quarter of 2016 and an income tax benefit of RMB22.9 million in the corresponding period in 2015. The income tax expense for the fourth quarter of 2016 mainly includes current income tax expense of RMB1.1

 



 

million and deferred tax expense of RMB20.7 million.

 

Net loss was RMB155.2 million (US$22.4 million) in the fourth quarter of 2016, compared with net loss of RMB94.3 million in the third quarter of 2016, and a net loss of RMB36.8 million in the corresponding period in 2015. Net loss per basic and diluted American depositary share (“ADS”) for the fourth quarter of 2016 was RMB5.92 (US$0.80) each. Each ADS represents 16 ordinary shares of the Company.

 

Adjusted EBITDA (non-GAAP), defined as EBITDA excluding share-based compensation expenses, foreign exchange gain (loss), transaction tax on assets transfer and impairment of long term investments, was a loss of RMB78.6 million (US$11.3 million), compared with a loss of RMB46.0 million in the third quarter of 2016, and adjusted EBITDA (non-GAAP) of RMB3.9 million in the corresponding period in 2015.

 

Adjusted net loss (non-GAAP), defined as net loss before share-based compensation expenses, foreign exchange gain (loss), transaction tax on assets transfer, impairment of long term investments and penalties on uncertain tax positions, was RMB141.6 million (US$20.4 million), compared with adjusted net loss (non-GAAP) of RMB86.6 million in the third quarter of 2016 and adjusted net loss (non-GAAP) of RMB15.8 million in the corresponding period in 2015. Non-GAAP net loss per basic and diluted ADS for the fourth quarter of 2016 was RMB5.44 (US$0.80) each.

 

Full Year 2016 Financial Results

 

For the full year ended December 31, 2016, net revenues were RMB1.1 billion (US$151.8 million), representing a 22.1% decrease from the previous year.

 

Gross loss in 2016 was RMB5.3 million (US$0.8 million), compared with a gross profit of RMB312.2 million in 2015.

 

Adjusted EBITDA (non-GAAP) in 2016 was a loss of RMB236.9 million (US$34.1 million), compared with an adjusted EBITDA of RMB120.2 million in 2015.

 

Net loss in 2016 was RMB496.9 million (US$71.6 million), compared with a net loss of RMB88.7 million in 2015.

 

Adjusted net loss (non-GAAP) was RMB407.2 million (US$58.6 million) in 2016, compared with an adjusted net loss (non-GAAP) of RMB23.4 million in 2015.

 

Balance Sheet

 

As of December 31, 2016, the Company had cash and cash equivalents of RMB134.9 million (US$19.4 million), compared with RMB606.8 million as of December 31, 2015. Capital expenditures for the fourth quarter and full year of 2016 were RMB25.6 million (US$3.7 million) and RMB143.1 million (US$20.6 million), respectively.

 

2017 Revenue Guidance

 

ChinaCache currently expects to generate total net revenues in the range of RMB1.18 billion to RMB1.24 billion for the full year of 2017, representing year-over-year growth of approximately 12% to 18%. On a year-over-year basis, the Company expects to see revenue growth starting from the second half of 2017.

 

This forecast reflects ChinaCache’s current view, which is subject to change.

 



 

Conference Call Information

 

The Company has scheduled a conference call to discuss these results at 8:00 PM Eastern time on March 27, 2017, which corresponds to 8:00 AM Beijing time on March 28, 2017.

 

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

 

·                  U.S. dial-in number: +1 (845) 675-0438

·                  Hong Kong dial-in number: +852 3018-6776

·                  International dial-in number: +65 6713-5440

·                  China dial-in number: 400-1200-654

·                  Conference ID: 88613056

 

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

 

A replay of the conference call will also be available approximately two hours after the conclusion of the live call until April 3, 2017 by dialing:

 

·                  U.S. dial-in number: +1 (855) 452-5696

·                  International dial-in number: +61 (2) 9003-4211

·                  China dial-in number: 400-632-2162

·                  Conference ID: 88613056

 

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.

 

*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 measures to review and assess its operating performance: 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 income (loss), adjusted net income (loss) (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 Non-GAAP to GAAP Financial Measures” set forth at the end of this press release.

 



 

To present 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 expense.

 

To present non-GAAP operating income (loss), the Company excludes share-based compensation expense, transaction tax on assets transfer and impairment of long term investments.

 

The Company defines adjusted net income (loss) as net income (loss) before share-based compensation expense, foreign exchange gain (loss), transaction tax on assets transfer, impairment of long term investments and penalties on uncertain tax positions.

 

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 and penalties on uncertain tax positions and depreciation and amortization. The Company defines adjusted EBITDA as EBITDA before share-based compensation expense, foreign exchange gain (loss), transaction tax on assets transfer and impairment of long term investments 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 structure (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 or non-recurrent 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 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.

 

Exchange Rate Information

 

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. dollars are based on the effective exchange rate of 6.9430 as of December 31, 2016.

 

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

ChinaCache International Holdings

Tel: +86 (10) 6408 5307

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

 



 

FINANCIAL TABLES

 

·                  Unaudited Condensed Consolidated Balance Sheets

·                  Unaudited Condensed Consolidated Statements of Comprehensive Income(loss)

·                  Supplementary Metrics - Reconciliations of Non-GAAP to GAAP Financial Measures

 



 

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

 

387,940

 

55,875

 

Intangible assets, net

 

10,898

 

11,728

 

1,689

 

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

 

470,352

 

67,745

 

 

 

 

 

 

 

 

 

Total Assets

 

2,618,616

 

2,176,491

 

313,480

 

 

 

 

 

 

 

 

 

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

 

34,419

 

4,957

 

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

 

1,845,906

 

265,866

 

 

 

 

 

 

 

 

 

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

 

1,901,065

 

273,810

 

 

 

 

 

 

 

 

 

Total Shareholders’ equity

 

721,687

 

275,426

 

39,670

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

2,618,616

 

2,176,491

 

313,480

 

 



 

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

)

(257,650

)

(37,109

)

(1,041,412

)

(1,059,533

)

(152,604

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (loss)

 

44,108

 

6,510

 

5,662

 

817

 

312,215

 

(5,298

)

(762

)

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 term investments

 

 

 

(18,240

)

(2,627

)

 

(18,240

)

(2,627

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(64,112

)

(99,478

)

(139,306

)

(20,063

)

(118,964

)

(505,220

)

(72,766

)

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

)

(133,384

)

(19,210

)

(111,349

)

(492,653

)

(70,956

)

Income tax benefit (expense)

 

22,861

 

384

 

(21,805

)

(3,141

)

22,614

 

(4,229

)

(609

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(36,798

)

(94,313

)

(155,189

)

(22,351

)

(88,735

)

(496,882

)

(71,565

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

(154,726

)

(22,284

)

(88,691

)

(496,106

)

(71,453

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

249

 

(196

)

(426

)

(61

)

264

 

(666

)

(96

)

Unrealized holding gain on available-for-sale investments

 

1,106

 

36

 

 

 

1,853

 

36

 

5

 

Reclassification adjustments for gains included in net income

 

 

(3,741

)

 

 

 

(3,741

)

(539

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other comprehensive income (loss), net of tax

 

1,355

 

(3,901

)

(426

)

(61

)

2,117

 

(4,371

)

(630

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

(35,443

)

(98,214

)

(155,615

)

(22,412

)

(86,618

)

(501,253

)

(72,195

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

(155,152

)

(22,345

)

(86,574

)

(500,477

)

(72,083

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per ordinary share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

(0.09

)

(0.23

)

(0.37

)

(0.05

)

(0.22

)

(1.22

)

(0.18

)

Diluted

 

(0.09

)

(0.23

)

(0.37

)

(0.05

)

(0.22

)

(1.22

)

(0.18

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per ADS*:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

(1.45

)

(3.68

)

(5.92

)

(0.80

)

(3.49

)

(19.52

)

(2.88

)

Diluted

 

(1.45

)

(3.68

)

(5.92

)

(0.80

)

(3.49

)

(19.52

)

(2.88

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 and impairment of long term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(36,798

)

(94,313

)

(155,189

)

(22,351

)

(88,735

)

(496,882

)

(71,565

)

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 term investments

 

 

 

 

18,240

 

2,627

 

 

18,240

 

2,627

 

Adjusted EBITDA

 

3,911

 

(45,951

)

(78,643

)

(11,326

)

120,183

 

(236,867

)

(34,115

)

Margin%

 

1.3

%

(17.6

)%

(29.9

)%

(29.9

)%

8.9

%

(22.5

)%

(22.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 and impairment of long term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(36,798

)

(94,313

)

(155,189

)

(22,351

)

(88,735

)

(496,882

)

(71,565

)

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 term investments

 

 

 

18,240

 

2,627

 

 

18,240

 

2,627

 

Adjusted net loss

 

(15,784

)

(86,627

)

(141,621

)

(20,396

)

(23,354

)

(407,168

)

(58,644

)

Margin%

 

(5.1

)%

(33.1

)%

(53.8

)%

(53.8

)%

(1.7

)%

(38.6

)%

(38.6

)%

Loss per ordinary share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

(0.05

)

(0.21

)

(0.34

)

(0.05

)

(0.13

)

(1.00

)

(0.14

)

Diluted

 

(0.05

)

(0.21

)

(0.34

)

(0.05

)

(0.13

)

(1.00

)

(0.14

)

Loss per ADS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

(0.84

)

(3.36

)

(5.44

)

(0.80

)

(2.01

)

(16.00

)

(2.24

)

Diluted

 

(0.84

)

(3.36

)

(5.44

)

(0.80

)

(2.01

)

(16.00

)

(2.24

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP gross profit (loss) — defined as gross profit (loss) before share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (loss)

 

44,108

 

6,510

 

5,662

 

817

 

312,215

 

(5,298

)

(762

)

Plus: Share-based compensation

 

945

 

378

 

623

 

90

 

3,670

 

5,961

 

859

 

Non-GAAP gross profit

 

45,053

 

6,888

 

6,285

 

907

 

315,885

 

663

 

97

 

Margin%

 

14.5

%

2.6

%

2.4

%

2.4

%

23.3

%

0.1

%

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

(551

)

Non-GAAP research & development expenses

 

24,785

 

23,775

 

24,901

 

3,586

 

99,852

 

100,190

 

14,431

 

% 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 and impairment of long term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(64,112

)

(99,478

)

(139,306

)

(20,063

)

(118,964

)

(505,220

)

(72,766

)

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 term investments

 

 

 

18,240

 

2,627

 

 

18,240

 

2,627

 

Non-GAAP operating loss

 

(40,459

)

(90,877

)

(118,381

)

(17,049

)

(42,625

)

(401,955

)

(57,893

)

Margin%

 

(13.0

)%

(34.7

)%

(45.0

)%

(45.0

)%

(3.1

)%

(38.1

)%

(38.1

)%