April 24, 2017

ChinaCache Reports Adjusted Fourth Quarter and Full Year 2016 Results from New Value-added Tax Treatment

BEIJING, April 24, 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 its adjusted unaudited financial results for the fourth quarter and full year 2016.

On April 17, 2017, a Beijing local taxation division notified the Company that it disallowed the value-added tax treatment by the Company on certain transactions that happened in 2016. As a result of this development, the Company recalculated the related value-added taxes and revised the amount of cost of revenues for the fourth quarter of 2016 and full year 2016 from RMB257.7 million and RMB1,059.5 million, respectively, as reported on March 27, 2017, to RMB275.9 million and RMB1,077.8 million, respectively. This revision resulted in an increase in the cost of revenue for the fourth quarter of 2016 and full year 2016 by approximately RMB18.3 million and RMB18.3 million (variance due to rounding), respectively. The revision did not affect the Company's cash flows for 2016.

The following presents the Company's unaudited financial results for the fourth quarter of 2016 and full year 2016 after giving effect to the aforementioned adjustment.

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, net243,431 190,587 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 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 721,687 257,148 37,037 
          
 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) (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 term investments  -  -  (18,240) (2,627) -  (18,240) (2,627)  
                         
 Operating loss  (64,112)  (99,478) (157,583) (22,696) (118,964) (523,497) (75,399)  
  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) (151,661) (21,843) (111,349) (510,930) (73,589)  
  Income tax benefit (expense)  22,861  384  (21,805) (3,141) 22,614  (4,229) (609)  
                        
 Net loss   (36,798) (94,313) (173,466) (24,984) (88,735) (515,159) (74,198)  
                        
 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) (173,003) (24,917) (88,691) (514,383) (74,086)  
                        
 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) (173,892) (25,045) (86,618) (519,530) (74,828)  
                        
 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) (173,429) (24,978) (86,574) (518,754) (74,716)  
                         
                        
 Loss per ordinary share:                 
  Basic   (0.09) (0.23) (0.41) (0.06) (0.22) (1.26) (0.18)  
  Diluted   (0.09) (0.23) (0.41) (0.06) (0.22) (1.26) (0.18)  
                        
 Loss per ADS*:                  
  Basic   (1.45) (3.68) (6.56) (0.96) (3.49) (20.16) (2.88)  
  Diluted   (1.45) (3.68) (6.56) (0.96) (3.49) (20.16) (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) (173,466) (24,984) (88,735) (515,159) (74,198) 
 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) (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 and impairment of long term investments              
                    
 Net loss  (36,798) (94,313) (173,466) (24,984) (88,735) (515,159) (74,198) 
 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) (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 and impairment of long term investments              
                    
 Operating loss (64,112) (99,478) (157,583) (22,696) (118,964) (523,497) (75,399) 
 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) (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.

For investor and media inquiries please contact:



Investor Relations Department

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

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