Company Delivers Record Bookings, Continues Strong Revenue and EBITDA Growth
- Total revenues for the quarter ended December 31, 2009 were $74.3 million, representing a 13% year-over-year increase
- EBITDA, as adjusted, was $19.8 million for the quarter, representing an 8% year-over-year increase
- Income from operations was $18.9 million for the nine months ended December 31, 2009
- Bookings were a record $37.6 million for the quarter
- Total number of customers as of December 31, 2009 was 1,320, with 46 new customers added in the quarter and 191 customers added through the DS3 DataVaulting acquisition
- Terremark completes construction of second, 50,000-square-foot datacenter at the NAP of the Capital Region
MIAMI, Feb 08, 2010 (BUSINESS WIRE) — Terremark Worldwide, Inc. (NASDAQ:TMRK), a leading global provider of managed IT infrastructure services, today reported its results for the quarter ended December 31, 2009. Terremark delivered a record bookings quarter, with $37.6 million in annual contract value secured, and continued its strong revenue and EBITDA growth with $74.3 million in revenues and EBITDA, as adjusted, of $19.8 million.
“With CIOs increasingly focused on driving business growth while obtaining maximum value for every dollar spent, Terremark’s differentiated business model and complete set of infrastructure services, from cloud computing to cyber security, ideally positions our Company to benefit from the shift in how IT solutions are procured and delivered,” said Manuel D. Medina, Chairman and CEO of Terremark. “Our continued success is further evidence of the compelling value our innovative set of offerings provide Federal and enterprise customers and our ability to effectively execute our business plan.”
“Following Terremark’s strong performance through the first nine months of our fiscal year, we are confident in meeting our key financial targets based on our robust sales pipeline and high-level of visibility into the business,” said Jose Segrera, Terremark’s CFO. “With a sound balance sheet and strong liquidity, our Company is well positioned to continue delivering leading-edge solutions from our global footprint of world-class datacenter facilities.”
Q3 FY10 Financial Highlights
- Total revenues for the quarter ended December 31, 2009 were $74.3 million, which is in-line with previously announced guidance and represents a 13% year-over-year increase.
- EBITDA, as adjusted, for the quarter ended December 31, 2009 was $19.8 million, in-line with previously announced guidance. EBITDA, as adjusted, is defined as income (loss) from operations less depreciation, amortization, integration expenses, certain legal and professional costs, litigation and employment settlements, share-based payments, including share-settled liabilities and other non-cash expenses. EBITDA, as adjusted, should be considered in addition to, but not in lieu of, income (loss) from operations reported under generally accepted accounting principles (GAAP).
- Income from operations was $18.9 million for the nine months ended December 31, 2009.
- Cross connects billed to customers increased to 8,883 as of December 31, 2009 from 7,857 a year earlier, representing a 13% year-over-year increase. The continued increase in cross connects billed to customers underscores the compelling value of Terremark’s network-neutral model.
- Utilization of total colocation space utilization was 29.6% as of December 31, 2009. Utilization of built-out colocation space was 63.9% as of December 31, 2009.
Q3 FY10 Business Highlights
- Terremark increased the annualized cloud computing run rate to $17.2 million during the third quarter, a 30% increase from the previous quarter. The Company’s recently launched Cloud Computing Strike Force Team has helped continue Terremark’s success in increasing cloud revenue and gaining traction with Fortune 500 enterprises and Federal government agencies.
- Terremark booked $37.6 million of new annual contract value in the quarter ended December 31, 2009, which represents the highest bookings quarter in the Company’s history.
- During the quarter ended December 31, 2009, Terremark added 46 new customers, for a total of 1,320 customers as of December 31, 2009. This includes 191 existing DS3 DataVaulting customers that were added through the acquisition.
- Construction of the second datacenter at Terremark’s NAP of the Capital Region campus was completed on budget and on schedule, and is currently open for customer deployments. The Company continues to see robust demand from Federal government agencies and enterprises for services offered from this highly secure datacenter campus.
- In January, Terremark signed a lease agreement with Digital Realty Trust, Inc. (NYSE:DLR, news, filings) to establish a datacenter within one of Digital Realty Trust’s Dallas facilities. Through the agreement, Terremark will occupy 10,000 square feet of raised floor space with the ability to lease additional space to accommodate future growth.
- In November 2009, Terremark announced the acquisition of DS3 DataVaulting, a leading data management solutions Company. The team of experts from DS3, which has been successfully integrated into Terremark, has a proven track record of offering cost-effective, flexible and secure managed storage solutions for remote backup and restore which represented a strategically ideal fit with Terremark’s suite of managed IT infrastructure services.
Business Outlook
- For the fourth quarter of fiscal 2010, the Company expects revenues to range from $80.1 million to $85.1 million and EBITDA, as adjusted, to range from $25.4 million to $30.4 million.
- For the full 2010 fiscal year, the Company expects EBITDA, as adjusted, of $80.0 million to $85.0 million and revenues to range between $290.0 million to $295.0 million.
- For the full 2011 fiscal year, the Company expects revenues between $335.0 million and $340.0 million and EBITDA, as adjusted, to range from $95.0 million to $100.0 million.
The foregoing statements regarding targets for the quarter and full year are forward-looking and actual results may differ materially. These are the Company’s targets, not predictions of actual performance.
Conference Call Information
- The Company will hold a conference call today, February 8, 2010 at 5:00 p.m. ET, to discuss all of the above.
- To hear the conference call live, dial 800-706-7741 (domestic) or 617-614-3471 (international) five to ten minutes before the call and reference the passcode TMRK Call.
- A simultaneous live Webcast of the call will be available on the Internet at www.terremark.com , under the Investor Relations heading.
- A replay of the call will be available beginning on Monday, February 8, 2010 at 8:00 p.m. (ET) by dialing 888-286-8010 (domestic) or 617-801-6888(international) and providing the following replay code: 59963849. In addition, a replay of the Webcast will be available on the Company’s web site at www.terremark.com
Additional information regarding the Company’s financial performance as of and for the three and nine months ended December 31, 2009 and 2008, and the financial performance as of and for the three months ended September 30, 2009 can be found on the attached balance sheet and statement of operations and in the Company’s Quarterly Report on Form 10-Q.
About Terremark Worldwide, Inc.
Terremark Worldwide (NASDAQ:TMRK) is a leading global provider of IT infrastructure services delivered on the industry’s most robust and advanced technology platform. Leveraging data centers in the United States, Europe and Latin America with access to massive and diverse network connectivity, Terremark delivers government and enterprise customers a comprehensive suite of managed solutions including managed hosting, colocation, disaster recovery, security, data storage and cloud computing services. Terremark’s Enterprise Cloud computing architecture delivers the agility, scale and economic benefits of cloud computing to mission-critical enterprise and Web 2.0 applications and its DigitalOps(R) service platform combines end-to-end systems management workflow with a comprehensive customer portal. More information about Terremark Worldwide can be found at www.terremark.com
Statements contained in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Terremark’s actual results may differ materially from those set forth in the forward-looking statements due to a number of risks, ability to cross-sell across an acquired customer base, ability to increase revenue yields within facilities, ability to refinance existing debt, uncertainties and other factors, as discussed in Terremark’s filings with the SEC. These factors include, without limitation, Terremark’s ability to obtain funding for its business plans, uncertainty in the demand for Terremark’s services or products and Terremark’s ability to manage its growth, and the successful integration of operations of acquired companies. Terremark does not assume any obligation to update these forward-looking statements.
Non-GAAP Financial Measures
Terremark continues to provide all information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, Terremark uses non-GAAP financial measures, such as EBITDA, as adjusted. In presenting these non-GAAP financial measures, Terremark excludes certain items that it believes are not good indicators of the Company’s current or future operating performance. These items are depreciation, amortization, integration expenses, certain legal and professional costs, litigation and employment settlements, other non-cash expenses and share-based payments, including share-settled liabilities.
Terremark intends to calculate the various non-GAAP financial measures in future periods on a basis consistent with its calculation of those measures for the three and nine months ended December 31, 2009 and 2008 and the three months ended September 30, 2009, presented within this press release.
| Terremark Worldwide, Inc. | ||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||||
| (in thousands) | ||||||||||||
| (unaudited) | ||||||||||||
| December 31, | September 30, | December 31, | ||||||||||
| 2009 | 2009 | 2008 | ||||||||||
| Assets | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 59,560 | $ | 130,724 | $ | 47,035 | ||||||
| Restricted cash | – | – | 1,107 | |||||||||
| Accounts receivable, net | 41,885 | 37,677 | 34,333 | |||||||||
| Prepaid expenses and other current assets | 13,234 | 11,951 | 9,688 | |||||||||
| Total current assets | 114,679 | 180,352 | 92,163 | |||||||||
| Property and equipment, net | 376,994 | 327,488 | 292,965 | |||||||||
| Debt issuance costs, net | 3,369 | 3,362 | 7,839 | |||||||||
| Other assets | 17,798 | 13,602 | 9,144 | |||||||||
| Intangibles, net | 12,236 | 11,879 | 13,598 | |||||||||
| Goodwill | 95,946 | 86,139 | 86,139 | |||||||||
| Total assets | $ | 621,022 | $ | 622,822 | $ | 501,848 | ||||||
| Liabilities and Stockholder’s Equity | ||||||||||||
| Current liabilities | ||||||||||||
| Current portion of capital lease obligations and secured loans | $ | 4,212 | $ | 3,068 | $ | 3,701 | ||||||
| Accounts payable and other current liabilities | 62,557 | 49,433 | 50,766 | |||||||||
| Interest payable | 3,247 | 14,685 | 4,179 | |||||||||
| Current portion of convertible debt | – | – | 31,466 | |||||||||
| Total current liabilities | 70,016 | 67,186 | 90,112 | |||||||||
| Secured loans, less current portion | 388,207 | 387,596 | 251,846 | |||||||||
| Convertible debt, less current portion | 57,192 | 57,192 | 57,192 | |||||||||
| Deferred rent and other liabilities | 17,514 | 16,114 | 15,545 | |||||||||
| Deferred revenue | 8,424 | 8,028 | 8,316 | |||||||||
| Total liabilities | 541,353 | 536,116 | 423,011 | |||||||||
| Commitments and contingencies | – | – | – | |||||||||
| Stockholders’ equity | ||||||||||||
| Series I convertible preferred stock | – | – | – | |||||||||
| Common stock | 65 | 65 | 59 | |||||||||
| Common stock warrants | 8,901 | 8,927 | 10,674 | |||||||||
| Additional paid-in capital | 454,364 | 452,591 | 425,485 | |||||||||
| Accumulated deficit | (383,486 | ) | (375,408 | ) | (357,141 | ) | ||||||
| Accumulated other comprehensive loss | (175 | ) | 531 | (240 | ) | |||||||
| Total stockholders’ equity | 79,669 | 86,706 | 78,837 | |||||||||
| Total liabilities and stockholders’ equity | $ | 621,022 | $ | 622,822 | $ | 501,848 | ||||||
| Terremark Worldwide, Inc. | |||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| (unaudited) | |||||||||||||
| For the Three Months Ended | |||||||||||||
| December 31, | September 30, | December 31, | |||||||||||
| 2009 | 2009 | 2008 | |||||||||||
| Revenues | $ | 74,272 | $ | 69,803 | $ | 65,877 | |||||||
| Expenses | |||||||||||||
| Cost of revenues, excluding depreciation and amortization | 41,880 | 39,757 | 34,242 | ||||||||||
| General and administrative | 8,807 | 8,479 | 8,752 | ||||||||||
| Sales and marketing | 7,197 | 6,099 | 7,155 | ||||||||||
| Depreciation and amortization | 9,708 | 8,894 | 7,538 | ||||||||||
| Operating expenses | 67,592 | 63,229 | 57,687 | ||||||||||
| Income from operations | 6,680 | 6,574 | 8,190 | ||||||||||
| Other (expenses) income | |||||||||||||
| Interest expense | (13,656 | ) | (13,929 | ) | (8,176 | ) | |||||||
| Loss on early extinguishment of debt | – | – | – | ||||||||||
| Change in fair value of derivatives | (367 | ) | 61 | (8,223 | ) | ||||||||
| Interest income | 85 | 119 | 256 | ||||||||||
| Other | 59 | 265 | (504 | ) | |||||||||
| Total other expenses | (13,879 | ) | (13,484 | ) | (16,647 | ) | |||||||
| Loss before income taxes | (7,199 | ) | (6,910 | ) | (8,457 | ) | |||||||
| Income tax expense | (879 | ) | (326 | ) | (229 | ) | |||||||
| Net loss | (8,078 | ) | (7,236 | ) | (8,686 | ) | |||||||
| Preferred dividend | (234 | ) | (235 | ) | (195 | ) | |||||||
| Net loss attributable to common stockholders | $ | (8,312 | ) | $ | (7,471 | ) | $ | (8,881 | ) | ||||
| Net loss per common share: | |||||||||||||
| Basic and diluted | $ | (0.13 | ) | $ | (0.12 | ) | $ | (0.15 | ) | ||||
| Weighted average common shares outstanding – basic and diluted | 64,803 | 64,669 | 59,544 | ||||||||||
| Reconciliation of Income from Operations to EBITDA, as adjusted: | |||||||||||||
| Income from operations | 6,680 | 6,574 | 8,190 | ||||||||||
| Depreciation and amortization | 9,708 | 8,894 | 7,538 | ||||||||||
| Share-based payments, including share-settled liabilities | 2,307 | 2,116 | 1,780 | ||||||||||
| Certain legal and professional costs | 801 | 288 | 87 | ||||||||||
| Litigation and employment settlements | 278 | 103 | 769 | ||||||||||
| EBITDA, as adjusted | $ | 19,774 | $ | 17,975 | $ | 18,364 | |||||||
| Calculation of Gross Profit Margin: | |||||||||||||
| Revenues | 74,272 | 69,803 | 65,877 | ||||||||||
| Less: | |||||||||||||
| Cost of revenues, excluding depreciation and amortization | 41,880 | 39,757 | 34,242 | ||||||||||
| Gross profit | $ | 32,392 | $ | 30,046 | $ | 31,635 | |||||||
| Gross Profit Margin as a % of Revenues | 44 | % | 43 | % | 48 | % | |||||||
| Terremark Worldwide, Inc. | ||||||||
| Condensed Consolidated Statements of Operations | ||||||||
| (in thousands, except per share data) | ||||||||
| (unaudited) | ||||||||
| For the Nine Months Ended | ||||||||
| December 31, | December 31, | |||||||
| 2009 | 2008 | |||||||
| Revenues | $ | 209,836 | $ | 181,574 | ||||
| Expenses | ||||||||
| Cost of revenues, excluding depreciation and amortization | 118,362 | 101,459 | ||||||
| General and administrative | 25,522 | 28,702 | ||||||
| Sales and marketing | 19,572 | 19,633 | ||||||
| Depreciation and amortization | 27,474 | 20,086 | ||||||
| Operating expenses | 190,930 | 169,880 | ||||||
| Income from operations | 18,906 | 11,694 | ||||||
| Other (expenses) income | ||||||||
| Interest expense | (36,649 | ) | (21,823 | ) | ||||
| Loss on early extinguishment of debt | (10,275 | ) | – | |||||
| Change in fair value of derivatives | (1,806 | ) | (4,069 | ) | ||||
| Interest income | 297 | 1,203 | ||||||
| Other | 814 | (696 | ) | |||||
| Total other expenses | (47,619 | ) | (25,385 | ) | ||||
| Loss before income taxes | (28,713 | ) | (13,691 | ) | ||||
| Income tax expense | (1,779 | ) | (1,025 | ) | ||||
| Net loss | (30,492 | ) | (14,716 | ) | ||||
| Preferred dividend | (703 | ) | (586 | ) | ||||
| Net loss attributable to common stockholders | $ | (31,195 | ) | $ | (15,302 | ) | ||
| Net loss per common share: | ||||||||
| Basic and diluted | $ | (0.49 | ) | $ | (0.26 | ) | ||
| Weighted average common shares outstanding – basic and diluted | 63,636 | 59,345 | ||||||
| Reconciliation of Income from Operations to EBITDA, as adjusted: | ||||||||
| Income from operations | 18,906 | 11,694 | ||||||
| Depreciation and amortization | 27,474 | 20,086 | ||||||
| Share-based payments, including share-settled liabilities | 6,455 | 4,938 | ||||||
| Certain legal and professional costs | 1,194 | 1,356 | ||||||
| Litigation and employment settlements | 420 | 770 | ||||||
| Other non-cash expenses | – | 383 | ||||||
| EBITDA, as adjusted | $ | 54,449 | $ | 39,227 | ||||
| Calculation of Gross Profit Margin: | ||||||||
| Revenues | 209,836 | 181,574 | ||||||
| Less: | ||||||||
| Cost of revenues, excluding depreciation and amortization | 118,362 | 101,459 | ||||||
| Gross profit | $ | 91,474 | $ | 80,115 | ||||
| Gross Profit Margin as a % of Revenues | 44 | % | 44 | % | ||||
SOURCE: Terremark Worldwide, Inc.
Terremark Worldwide, Inc., Miami
Media Relations:
Xavier Gonzalez, 305-961-3134
xgonzalez@terremark.com
or
Investor Relations:
Hunter Blankenbaker, 305-961-3109
hblankenbaker@terremark.com
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