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: [email protected]
Mr. Ross Warner The Piacente Group | Investor Relations Tel: +86 10 5730-6200 Email: [email protected]
Ms. Brandi Piacente The Piacente Group | Investor Relations Tel: +1 212-481-2050 Email: [email protected]