ChinaCache International Holdings Ltd. Announces Third Quarter 2012 Financial Results

ChinaCache International Holdings Ltd. Announces Third Quarter 2012 Financial
Results

Reports Improved Profitability and Enterprise Market Penetration

BEIJING, Nov. 19, 2012 (GLOBE NEWSWIRE) -- ChinaCache International Holdings
Ltd. ("ChinaCache" or the "Company") (Nasdaq:CCIH), the leading total
solutions provider of Internet content and application delivery services in
China, today announced its unaudited condensed consolidated financial results
for the Company's third quarter ended September 30, 2012.

Highlights for the Third Quarter of 2012

  *Net revenues in the third quarter were RMB209.2 million (US$33.3 million),
    representing a 5.9% increase from the previous quarter and a 30.4%
    increase year-over-year.
  *Gross profit in the third quarter was RMB68.3 million (US$10.9 million),
    an increase of 10.0% from the previous quarter and 39.7% year-over-year.
  *Gross margin in the third quarter was 32.6%, compared to 31.4% in the
    second quarter of 2012 and 30.5% in the corresponding quarter in 2011.
    Adjusted gross margin (non-GAAP) in the third quarter was 38.7%. 
  *Adjusted net income (non-GAAP) in the third quarter was RMB8.2 million
    (US$1.3 million), a 32.3% increase from the previous quarter and a
    decrease of 25.5% year-over-year.
  *Number of active customers in the third quarter was 1,138, compared to
    1,013 in the previous quarter. Third quarter 2012 customer additions
    totaled a record 125, driven primarily by enterprises and e-commerce
    customers.
  *Increased penetration among mobile app developers and platforms, and
    launched new solution for mobile app developers.
  *Expanded International presence through European partnership with
    Interxion.
  *ChinaCache Index, or CCIndex, gained further recognition as a source of
    valuable data for carriers, ISPs, government agencies and others invested
    in China's Internet industry. CCIndex began publishing quarterly China
    Internet Speed Rankings.

"We are pleased to deliver another quarter of financial improvement, while
making important progress toward a number of key strategic initiatives," said
Mr. Song Wang, co-founder, chairman and chief executive officer of ChinaCache.
"Our primary focus, the enterprise vertical, delivered strong performance in
the third quarter. Enterprise demand for our value-added services is
accelerating, and we are investing the necessary resources to strengthen this
segment of the business. These services, together with our Content-aware
Network Services, form a comprehensive solution for customers in a variety of
industries looking to establish or improve an online presence."

"During the quarter, we continued to enhance our operational capabilities on
all fronts," said Ms. Jackie You Kazmerzak, chief financial officer of
ChinaCache. "Given the current macroeconomic environment, we have sharpened
our strategic focus on what we consider Sustainable Markets. We are
allocating more resources to penetrate the enterprise market and taking a more
selective approach to signing new customers.It is this focus that resulted in
improved revenue mix favoring enterprises and e-commerce customers, and
supported a third consecutive quarter of gross margin expansion.Moreover, we
delivered record quarterly increase in customer count.We are confident that
our pursuit of quality growth will pay off in the long run, both for
ChinaCache and for our shareholders."

Third Quarter 2012 Financial Results

Net revenues for the third quarter of 2012 were RMB209.2 million (US$33.3
million), a 5.9% increase from the second quarter of 2012 and a 30.4% increase
from the corresponding period in 2011. Net revenue growth was primarily driven
by strength in the enterprises and e-commerce vertical, which reached 29% of
total revenues.

Cost of revenues for the third quarter increased by 4.0% quarter-over-quarter
and 26.3% year-over-year to RMB140.9 million (US$22.4 million). Gross margin
increased to 32.6%, compared to 31.4% in the previous quarter and 30.5% in the
corresponding period in 2011. Non-GAAP gross margin, which excludes
share-based compensation, depreciation and amortization expenses, was 38.7%,
compared to 39.1% in the second quarter of 2012 and 41.4% in the corresponding
period in 2011.

Sales and marketing expenses for the third quarter increased by 16.9% from the
previous quarter to RMB21.6 million (US$3.4 million) and increased by 16.2%
year-over-year, accounting for 10.3% of net revenues as the Company refined
its incentive plans to boost enterprise customer sales. 

General and administrative expenses for the third quarter decreased by 5.8%
over the previous quarter to RMB22.3 million (US$3.5 million), or 10.6% of net
revenues, and increased by 80.0% year-over-year. This year-over-year increase
is mainly due to enhancement in managerial capabilities and costs arising from
the Company's office relocation plan.

Research and development expenses for the third quarter increased 23.9% over
the previous quarter to RMB18.6 million (US$3.0 million) and increased by
72.7% year-over-year, accounting for 8.9% of net revenues. The increases are
mainly due to the Company's research initiatives on technologies and solutions
targeting mobile Internet and enterprise customers.

Operating profit was RMB5.9 million (US$0.9 million) in the third quarter of
2012, compared to an operating profit of RMB5.0 million in the previous
quarter and RMB6.7 million in the corresponding period in 2011. Non-GAAP
operating profit, which excludes share-based compensation expenses and
post-acquisition settlement consideration, was RMB9.8 million (US$1.6
million), compared to RMB8.0 million in the second quarter of 2012 and RMB12.8
million in the corresponding period in 2011.

Income tax expense was RMB1.2 million (US$0.2 million) in the third quarter of
2012, compared to income tax expense of RMB2.6 million in the second quarter
of 2012 and RMB2.9 million in the corresponding period in 2011.

Net income was RMB2.9 million (US$0.5 million) in the third quarter of 2012,
compared to net income of RMB4.3 million in the second quarter of 2012 and
RMB3.4 million in the corresponding period in 2011. Basic and diluted income
per American depositary share ("ADS") from continuing operations for the third
quarter of 2012 was RMB0.13 (US$0.02) and RMB0.12 (US$0.02), respectively.
Each ADS represents 16 ordinary shares of the Company.

Adjusted net income (non-GAAP), defined as income from continuing operations
before share-based compensation expenses, foreign exchange loss or gain,
penalties on uncertain tax positions and post-acquisition settlement
consideration, was RMB8.2 million (US$1.3 million), compared to RMB6.2 million
in the second quarter of 2012 and RMB11.0 million in the corresponding period
in 2011.Non-GAAP basic and diluted earnings per ADS in the third quarter of
2012 were RMB0.36 (US$0.06) and RMB0.35 (US$0.06), respectively.

Adjusted EBITDA (non-GAAP), defined as EBITDA excluding share-based
compensation expenses, foreign exchange loss or gain and post-acquisition
settlement consideration, was RMB23.6 million (US$3.7 million) compared to
RMB24.4 million in the second quarter of 2012 and RMB31.1 million in the
corresponding period in 2011.

Capital Resources

As of September 30, 2012, the Company had cash and cash equivalents of
RMB274.1 million (US$43.6 million). In addition, the Company had an
available-for-sale investment amounting to RMB 98.6 million (US$15.7 million)
in an RMB denominated short term fixed income fund which is presented as
non-current assets. Capital expenditures for the third quarter of 2012 were
RMB31.3 million (US$5.0 million).

Share Repurchases

In May 2012, the Company's Board authorized a share repurchase program to
repurchase up to US$10 million of the Company's ADSs from May 2012 to May 2013
through open market transactions or in block trades.

As of November 16, 2012, the Company had repurchased a total of 226,006 ADSs
for approximately US$1.1 million at an average price of US$4.93 per ADS under
this buyback program on the open market. The Company currently has
approximately 22.8 million ADSs outstanding.

Outlook for the Company's Fourth Quarter of 2012

ChinaCache currently expects to generate total net revenues in the range of
RMB225 million (US$35.8 million) to RMB230 million (US$36.6 million) for the
fourth quarter of 2012, representing an increase of 7.6% to 9.9% from the
third quarter of 2012, and an increase of 25.3% to 28.1% year-over-year. This
forecast reflects ChinaCache's current view, which is subject to change.

Conference Call Information

The Company has scheduled a corresponding conference call and live webcast to
discuss these results at 7:00 PM Eastern Standard Time on November 19, 2012,
which corresponds to 8:00 AM Beijing time on November 20, 2012.

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

•U.S. dial-in number:                    +1 (646) 254-3515
•Hong Kong dial-in number:               +852 3051-2745
•International dial-in number: +65 6723-9385
•China dial-in number:                   400-1200-654
•Conference ID:                          6523-9296

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

A replay of the conference call will also be available until November 26, 2012
by dialing:

•U.S. dial-in number:                    +1 (855) 452-5696
•International dial-in number: +61 2 8199 0299
•China dial-in number:                   400-1200-932
•Conference ID:                          6523-9296

About ChinaCache International Holdings Ltd.

ChinaCache International Holdings Ltd. (Nasdaq:CCIH) is the 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 en.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 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 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 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 income (loss) from continuing
operations 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 income (loss) from continuing operations before
interest expense, interest income, income tax expense, penalties on uncertain
tax positions, and depreciation and amortization. The Company defines
adjusted EBITDA as EBITDA before share-based compensation expenses, foreign
exchange loss or gain, and post-acquisition settlement consideration 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
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.

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 6.2848 as of September 30, 2012.

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 outlook for the fourth quarter of 2012 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.

FINANCIAL TABLES

  *Unaudited Condensed Consolidated Balance Sheets
  *Unaudited Condensed Consolidated Statements of Operations and
    Comprehensive Income
  *Supplementary Financial Data
  *Supplementary Operating Metrics
  *Reconciliations of Non-GAAP to GAAP Financial Measures

Condensed Consolidated Balance Sheets
(amounts in thousands)
                                                               
                           As of Sept 30 As of Jun   As of Sept  As of Sept
                                           30         30         30
                           2011           2012        2012        2012
                           RMB          RMB       RMB       US$
                           (Unaudited)    (Unaudited) (Unaudited) (Unaudited)
ASSETS                                                         
Current assets                                                  
Cash and cash equivalents  417,692       304,710    274,142    43,620
Accounts receivable, net   177,232       252,422    284,902    45,332
Prepaid expenses and other  20,463        17,974     17,975     2,860
current assets
Deferred tax assets        4,595         8,370      7,912      1,259
Amount due from related     48,654        --        --        --
parties
Total current assets       668,636       583,476    584,931    93,071
                                                               
Non-current assets                                             
Investment at cost         6,254         13,136     13,136     2,090
Available-for-sale          99,014        99,957     100,337    15,965
investments
Property & equipment,net   159,350       163,226    178,332    28,375
Acquired intangible assets, 57            --        --        --
net
Intangible assets, net     --           1,460      2,573      409
Goodwill                   16,989        --        --        --
Deferred tax assets        3,936         5,093      2,934      467
Long-term deposits         2,906         4,668      3,847      612
Total non-current assets   288,506       287,540    301,159    47,918
                                                               
                                                               
Total Assets               957,142       871,016    886,090    140,989
                                                               
LIABILITIES AND                                                 
SHAREHOLDERS' EQUITY
Current Liabilities                                            
Accounts payable           83,489        69,508     83,076     13,219
Accrued employee benefits  24,098        29,624     28,571     4,546
Accrued expenses and other  52,381        58,917     62,117     9,884
payables
Income tax payable         33,889        17,867     16,074     2,558
Liabilities for uncertain   27,739        6,238      6,238      993
tax positions
Deferred tax liabilities   14            --        --        --
Dividend payable           130           --        --        --
Amounts due to related      59,150        18         18         3
parties
Current portion of capital  6,063         1,710      --        --
lease obligations
Total current liabilities  286,953       183,882    196,094    31,203
                                                               
Non-current liabilities                                        
Amounts due to related      3,956         --        --        --
parties
Total non-current           3,956         --        --        --
liabilities
                                                               
Total Liabilities          290,909       183,882    196,094    31,203
                                                               
Total Shareholders' equity 666,233       687,134    689,996    109,786
                                                               
TOTAL LIABILITIES AND       957,142       871,016    886,090    140,989
SHAREHOLDERS' EQUITY



Condensed Consolidated Statements of Operations
(amounts in thousands, except for number of shares, per share and per ADS
data)
                          
                          For the Three Months Ended
                          Sept 30, 2011 Jun 30, 2012 Sept 30,    Sept 30,
                                                       2012       2012
                          RMB           RMB           RMB         US$
                          (Unaudited)   (Unaudited)   (Unaudited) (Unaudited)
                                                               
Net revenues               160,432      197,536      209,202    33,287
Cost of revenues           (111,552)    (135,451)    (140,929)  (22,424)
                                                               
Gross profit               48,880       62,085       68,273     10,863
Sales & marketing expenses (18,561)     (18,447)     (21,567)   (3,432)
General & administrative   (12,364)     (23,621)     (22,250)   (3,540)
expenses
Research & development     (10,755)     (14,989)     (18,575)   (2,956)
expenses
Post-acquisition           (500)        --          --        --
settlement consideration
                                                               
Operating income           6,700        5,028        5,881      935
Interest income            372          596          243        39
Interest expense           (273)        (245)        (209)      (33)
Other income/(expense)     989          414          (443)      (70)
Foreign exchange           (1,547)      1,075        (1,423)    (226)
(loss)/gain, net
                                                               
Income from continuing
operations before income   6,241        6,868        4,049      645
taxes
Income tax expense         (2,874)      (2,568)      (1,187)    (189)
                                                               
Income from continuing     3,367        4,300        2,862      456
operations
                                                               
Discontinued operations                                         
Income from operations of
discontinued component     46           --          --        --
Jnet
                                                               
                                                               
Net income attributable to 3,413        4,300        2,862      456
ordinary shareholders
                                                               
Foreign currency           165          (129)        81         13
translation
Available for sale         (120)        363          382        61
(loss)/income
                                                               
Total other comprehensive  45           234          463        74
loss, net of tax
                                                               
Comprehensive income       3,458        4,534        3,325      530
                                                               
Earnings per ordinary                                           
share:
Income from continuing     0.01          0.01          0.01        0.00
operations
Income from discontinued   0.00          0.00          0.00        0.00
operations
Basic                      0.01          0.01          0.01        0.00
                                                               
Income from continuing     0.01          0.01          0.01        0.00
operations
Income from discontinued   0.00          0.00          0.00        0.00
operations
Diluted                    0.01          0.01          0.01        0.00
                                                               
Earnings per ADS:                                               
Income from continuing     0.14          0.19          0.13        0.02
operations
Income from discontinued   0.00          0.00          0.00        0.00
operations
Basic                      0.14          0.19          0.13        0.02
                                                               
Income from continuing     0.14          0.19          0.12        0.02
operations
Income from discontinued   0.00          0.00          0.00        0.00
operations
Diluted                    0.14          0.19          0.12        0.02
                                                               
Weighted average number of
ordinary shares used in    
earnings per share
computation:
Basic                      383,190,759   364,944,162   364,104,587 364,104,587
Diluted                    392,272,524   371,420,200   370,237,748 370,237,748



Supplementary Financial Data
(amounts in thousands, except for percentages)
                                                               
                         
                         For the Three Months Ended
                         Sept 30, 2011 Jun 30, 2012 Sept 30,    Sept 30,
                                                       2012       2012
                         RMB            RMB           RMB         US$
                         (Unaudited)    (Unaudited)   (Unaudited) (Unaudited)
                                                               
Cost of revenues                                                
breakdown:
Bandwidth, co-location    89,258        112,293      118,374    18,835
and storage fees
Depreciation of network
equipment and             16,457        14,670       11,963     1,903
amortization of acquired
intangible assets
Payroll and other
compensation costs of     4,520         5,495        6,745      1,073
network operations
personnel
Other cost of revenues    1,317         2,993        3,847      612
Total cost of revenues    111,552       135,451      140,929    22,423
                                                               
Allocation of share-based                                       
compensation expenses:
Cost of revenues          1,111         526          698        111
Sales and marketing       2,654         1,257        1,669      266
expenses
General and               616           585          777        124
administrative expenses
Research and development  1,172         556          737        117
expenses
Total share-based         5,553         2,924        3,881      618
compensation expenses
                                                               
Depreciation and                                                
amortization expenses:
Cost of revenues          16,457        14,670       11,963     1,903
Sales and marketing       216           39           312        50
expenses
General and               176           100          282        45
administrative expenses
Research and development  490           1,156        1,674      266
expenses
Total depreciation and    17,339        15,965       14,231     2,264
amortization expenses
                                                               
Capital expenditures,
related to additions of   20,874        29,484       31,316     4,983
property and equipment
As a percentage of net    13.0%          14.9%         15.0%       15.0%
revenues



Supplementary Operating Metrics
(Unaudited)
                                                                
                            For the Three Months Ended
                            
                            Jun 30, Sept 30, Dec 31, Mar 31, Jun 30, Sept 30,
                             2011    2011     2011    2012    2012    2012
                                                                
Revenue breakdown by                                             
industry verticals
                                                                
Internet and software        23%     20%      20%     20%     20%     20%
Mobile internet              16%     17%      17%     17%     18%     18%
Media and entertainment      31%     33%      33%     32%     30%     29%
Enterprises and e-commerce   27%     26%      26%     27%     28%     29%
Government agencies          3%      4%       4%      4%      4%      4%
Total                        100%    100%     100%    100%    100%    100%
                                                                
Revenues contributed by Top
5 customers as a percentage  33%     32%      32%     24%     29%     22%
of net revenues
                                                                
Number of active customers   617     683      775     895     1,013   1,138
                                                                
Number of employees at       442     506      557     690     751     758
period end



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
                                     Sept 30, 2011 Jun 30,      Sept 30, 2012
                                                    2012
                                     RMB           RMB          RMB
Adjusted EBITDA – defined as EBITDA
before share-based compensation
expense, foreign exchange loss or                              
gain, and post acquisition settlement
consideration
                                                              
Net income                            3,367        4,300       2,862
Depreciation                          17,301       15,965      14,231
Amortization                          38           --         --
Interest expense                      273          245         209
Interest income                       (372)        (596)       (243)
Income tax expense                    2,874        2,568       1,187
Share-based compensation              5,553        2,924       3,881
Foreign exchange loss/(gain)          1,547        (1,075)     1,423
Penalties on uncertain tax positions  --          22          --
Post-acquisition settlement           500          --         --
consideration
Adjusted EBITDA                       31,081       24,353      23,550
Margin%                               19.4%         12.3%        11.3%
QoQ growth                            8.6%          (9.8%)       (3.3%)
YoY growth                            (4.2%)        (14.9%)      (24.2%)
                                                              
Adjusted net income – defined as net
income before share-based
compensation expense, foreign
exchange loss or gain, penalty on                              
uncertain tax positions, and
post-acquisition settlement
consideration
                                                              
Net income                            3,367        4,300       2,862
Share-based compensation              5,553        2,924       3,881
Foreign exchange loss/(gain)         1,547        (1,075)     1,423
Penalties on uncertain tax positions  --          22          --
Post-acquisition settlement           500                      
consideration
Adjusted net income                   10,967       6,171       8,166
Margin%                               6.8%          3.1%         3.9%
QoQ growth                            13.0%         (30.8%)      32.3%
YoY growth                            (23.3%)       (36.4%)      (25.5%)
                                                              
                                     
                                     For the Three Months Ended
                                     Sept 30, 2011 Jun 30,      Sept 30, 2012
                                                    2012
Non-GAAP gross profit – defined as
gross profit before share-based                                
compensation expense and depreciation
and amortization
                                                              
Gross profit                          48,880       62,085      68,273
Plus: Depreciation and amortization   16,457       14,670      11,963
Plus: Share-based compensation        1,111        526         698
Non-GAAP gross profit                 66,448       77,281      80,934
Margin%                               41.4%         39.1%        38.7%
QoQ growth                            11.1%         7.6%         4.7%
YoY growth                            30.1%         29.2%        21.8%
                                                              
Non-GAAP operating expenses – defined
as operating expenses before                                   
share-based compensation expense
                                                              
Sales & marketing expenses            18,561       18,447      21,567
Minus: Share-based compensation       (2,654)      (1,257)     (1,669)
Non-GAAP sales & marketing expenses   15,907       17,190      19,898
% of net revenues                     9.9%          8.7%         9.5%
QoQ growth                            8.2%          (1.9%)       15.8%
YoY growth                            58.1%         17.0%        25.1%
                                                              
General & administrative expenses     12,364       23,621      22,250
Minus: Share-based compensation       (616)        (585)       (777)
Non-GAAP general & administrative     11,748       23,036      21,473
expenses
% of net revenues                     7.3%          11.7%        10.3%
QoQ growth                            25.4%         46.1%        (6.8%)
YoY growth                            120.7%        146.0%       82.8%
                                                              
Research & development expenses       10,755       14,989      18,575
Minus: Share-based compensation       (1,172)      (556)       (737)
Non-GAAP research & development       9,583        14,433      17,838
expenses
% of net revenues                     6.0%          7.3%         8.5%
QoQ growth                            20.8%         11.8%        23.6%
YoY growth                            156.2%        82.0%        86.1%
                                                              
Non-GAAP operating profit – defined
as GAAP operating profit before
share-based compensation expense and                           
post-acquisition settlement
consideration
                                                              
Operating income                      6,700        5,028       5,881
Plus: Share-based compensation        5,553        2,924       3,881
Plus: Post acquisition settlement     500          --         --
consideration
Non-GAAP operating profit             12,753       7,952       9,762
Margin%                               7.9%          4.0%         4.7%
QoQ growth                            5.4%          (29.0%)      22.8%
YoY growth                            (30.4%)       (34.3%)      (23.5%)
                                                              
                                                              
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                   10,967       6,171       8,166
Weighted average number of ordinary
shares used in earnings per share                              
computation:
Basic                                 383,190,759  364,944,162 364,104,587
Diluted                               392,272,524  371,420,200 370,237,748
Earnings per ordinary share:                                   
Basic                                 0.03          0.02         0.02
Diluted                               0.03          0.02         0.02
Earnings per ADS:                                              
Basic                                 0.46          0.27         0.36
Diluted                               0.45          0.27         0.35

CONTACT: For investor and media inquiries please contact:
        
         Ms. Yujie Li
         Investor Relations
         ChinaCache International Holdings
         Tel: +86 (10) 6437 3399
         Email: ir@chinacache.com
        
         Mr. Lee Roth
         The Piacente Group | Investor Relations
         Tel: +1 212-481 2050
         Email: chinacache@tpg-ir.com
 
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