Savvis Reports Year-over-Year Fourth Quarter 2010 Revenue Growth of 15% and Adjusted EBITDA Growth of 24%
By Savvis Inc., PRNEMonday, February 7, 2011
Managed Services revenue growth of 32% YoY, includes nearly 100% YoY growth in Cloud; Colocation revenue growth of 11% YoY
ST. LOUIS, February 8, 2011 - Savvis, Inc. (Nasdaq: SVVS), a global leader in cloud infrastructure and
hosted IT solutions for enterprises, today reported its fourth quarter 2010
financial results, with revenue of $252.7 million, compared to $219.8 million
in the fourth quarter of 2009. Adjusted EBITDA* was $67.8 million, compared
to $54.9 million of adjusted EBITDA in the fourth quarter of 2009.
(Logo: photos.prnewswire.com/prnh/20090803/PH55929LOGO )
Income from continuing operations for the fourth quarter of 2010 was
$14.0 million, compared to $10.4 million in the fourth quarter of 2009.
Savvis reported a net loss of ($2.9) million, or ($0.06) per share, in the
fourth quarter of 2010, compared to a fourth quarter 2009 net loss of ($5.4)
million, or ($0.10) per share.
"Our remarkable fourth quarter results were an appropriate end to 2010,
with good growth in Managed Services, Colocation and Network revenue reported
on both an annual and a quarterly basis," said Jim Ousley, chairman and chief
executive officer for Savvis. "Our successful execution and the strategic
changes we made over the past year are reflected in our solid financials. We
expect to see a general continuation of these trends in 2011, with specific
strength in our Managed Services business."
For full year 2010, revenue was $933.0 million, up 7% when compared to
full year 2009 revenue of $874.4 million. Adjusted EBITDA for 2010 was $236.2
million, up 7% over the $220.0 million reported in 2009.
Savvis reported income from continuing operations of $24.5 million in
2010, compared to full year 2009 income from continuing operations of $40.1
million. The company reported a net loss of ($54.0) million in 2010, or
($0.98) per share, and this amount includes approximately $11.8 million in
costs related to the company's debt refinancing. For full year 2009, Savvis
had a net loss of ($20.8) million, or ($0.39) per share.
Fourth Quarter Financial Results
US$ in millions Three months ended
12/31/10 9/30/10 12/31/09
Hosting $185.7 $176.7 $154.7
Network $67.0 $65.2 $65.1
Total revenue $252.7 $241.9 $219.8
------ ------ ------
Cost of revenue(1) $129.6 $131.6 $120.4
SG&A expenses(1) (2) $61.7 $56.5 $50.5
Non-cash, equity-based compensation(1) $5.2 $5.4 $6.0
Income from continuing operations $14.0 $3.5 $10.4
Net income (loss) from continuing
operations ($3.1) ($26.2) ($5.4)
Income (loss) from discontinued
operations, net of income tax(3) $0.2 ($0.0) --
Net income (loss) ($2.9) ($26.2) ($5.4)
Adjusted EBITDA $67.8 $59.7 $54.9
Adjusted EBITDA margin 27% 25% 25%
(1) Both cost of revenue and SG&A expenses exclude depreciation,
amortization and accretion and include non-cash, equity-based compensation.
Total non-cash, equity-based compensation attributed to cost of revenue for
the three months ended Dec. 31, 2010, Sept. 30, 2010, and Dec. 31, 2009, was
$1.3 million, $1.5 million and $1.1 million and to SG&A expenses was $4.0
million, $3.9 million and $4.9 million, respectively. (2) SG&A expenses
include acquisition and integration costs of $1.1 million and $0.5 million
for the three months ended Dec. 31, 2010, and Sept. 30, 2010, respectively.
(3) Includes income (loss) from the application services business acquired
from Fusepoint, which was classified as an asset held for sale at Sept. 30,
2010, and sold on Dec. 13, 2010. Total income (loss) attributed to net income
for the three months ended Dec. 31, 2010, and Sept. 30, 2010, was $160,000
and ($9,000), respectively.
Fourth Quarter Overview
Total Savvis revenue for the fourth quarter was $252.7 million, up 4%
compared to third quarter 2010 revenue of $241.9 million. Strong Managed
Services growth, data center expansions, improved renewals and churn, and a
seasonal increase in network traffic all helped contribute to the
improvement.
Adjusted EBITDA was $67.8 million for the fourth quarter of 2010, up 14%
compared to $59.7 million of adjusted EBITDA in the third quarter of 2010.
Growth in fourth quarter adjusted EBITDA was the result of steady improvement
in the company's renewals, bookings and installations throughout the
preceding three quarters.
Hosting
US$ in millions Three months ended
Percent of Revenue 12/31/10 9/30/10 12/31/09
Managed Services 48% $89.3 $81.5 $67.8
Percentage change 10% 32%
Colocation 52% $96.4 $95.2 $86.9
Percentage change 1% 11%
Total Hosting revenue $185.7 $176.7 $154.7
Percentage change 5% 20%
In the fourth quarter, Managed Services revenue reflected continued
growth in demand for Savvis' traditional managed services and an increase in
traction for its cloud solutions, which represent a growing portion of
Managed Services revenue. Traditional managed services include both utility
and virtualized services, while cloud solutions include the Savvis Symphony
Open, Dedicated and VPDC products.
Colocation revenue was up both quarterly and annually in the fourth
quarter, as the company continued to target and win enterprise clients for
its global data centers. Savvis also continued to reap the benefits of its
revamped renewal program, which resulted in a continued reduction in both
colocation and overall churn.
Network
US$ in millions Percent of Revenue Three months ended
12/31/10 9/30/10 12/31/09
Core(1) 57% $38.4 $36.4 $31.4
Percentage change 6% 22%
Sustaining(2) 43% $28.6 $28.8 $33.7
Percentage change (1%) (15%)
Total Network revenue $67.0 $65.2 $65.1
Percentage change 3% 3%
(1) Core network includes revenue from Thomson Reuters and from other
financial vertical and data center clients, who also purchase bundled network
and hosting services.
(2) Sustaining network includes revenue from services that are either in
slower growth or declining markets or are not directly tied to the future
growth of the company's network and hosting businesses.
The overall Network business showed both quarterly and annual revenue
growth in the fourth quarter, due to a seasonal increase in network traffic
and a quarterly delay in some expected churn. As expected, Core Network
revenue continued to grow, while the decline in Sustaining Network revenue
continued to slow.
Other Highlights
The Financial Vertical represented 28% of total revenue, or $69.7
million, in the fourth quarter of 2010. Revenue in the quarter was up 4%,
compared to the third quarter of 2010, and was up 21%, compared to the fourth
quarter of 2009.
During the quarter, Savvis added two new exchanges in Chicago and Slough.
The company also continued its expansion into additional global financial
markets, as part of its collaboration with Thomson Reuters. To date, orders
for Thomson Reuters Elektron Hosting solution are being taken in 10
locations.
Cash Flow and Balance Sheet
Net cash provided by operating activities was $71.4 million in the fourth
quarter of 2010, compared to $57.5 million in the fourth quarter of 2009.
Cash capital expenditures for the fourth quarter of 2010 totaled $43.8
million.
The company's cash position at Dec. 31, 2010, was $120.3 million,
compared to $88.0 million at Sept. 30, 2010. As of Dec. 31, 2010, the
long-term debt and capital leases for Savvis (net of current portion) totaled
$747.2 million, flat from $747.7 million as of Sept. 30, 2010.
Full Year Financial Results
US$ in millions 12 months ended
12/31/10 12/31/09 % change
Colocation $358.4 $341.3 5%
Managed services $315.0 $266.0 18%
Hosting $673.4 $607.3 11%
Core $139.9 $112.6 24%
Sustaining $119.7 $154.5 (23%)
Network services $259.6 $267.1 (3%)
Total revenue $933.0 $874.4 7%
------ ------ ---
Cost of revenue(1) $500.7 $480.3 4%
SG&A expenses(1) $226.8 $203.2 12%
Non-cash, equity-based compensation(1) $25.7 $29.1 (12%)
Income from continuing operations $24.5 $40.1 (39%)
Net income (loss) from continuing
operations ($54.0) ($20.8) (159%)
Income (loss) from discontinued
operations, net of income tax(2) $0.1 -- --
Net income (loss) ($54.0) ($20.8) (159%)
Adjusted EBITDA $236.2 $220.0 7%
Adjusted EBITDA margin 25% 25% ~15 bps
(1) Both cost of revenue and SG&A expenses exclude depreciation,
amortization and accretion and include non-cash, equity-based compensation.
Total non-cash, equity-based compensation attributed to cost of revenue for
the 12 months ended Dec. 31, 2010, and Dec. 31, 2009, was $5.9 million and
$5.5 million and to SG&A expenses was $19.8 million and $23.6 million,
respectively. (2) Includes income from the application services business
acquired from Fusepoint, which was classified as an asset held for sale at
Sept. 30, 2010, and sold on Dec. 13, 2010. Total income attributed to net
income for the 12 months ended Dec. 31, 2010, was $61,000.
Full Year Highlights
In addition to year-over-year growth in Managed Services, Colocation and
Core Network in 2010, the company also saw significant improvement in
specific verticals and product lines. In the financial vertical, 2010 revenue
was $252.7 million, up 10% over 2009 revenue of $229.1 million. For the
company's Savvis Symphony line of cloud products, which is a part of its
Managed Services offerings, revenue in 2010 was $15.2 million, up 106% over
2009 revenue of $7.4 million.
Savvis closed out the year with the news that it was positioned in the
Leaders Quadrant in the Magic Quadrant for Cloud Infrastructure as a Service
and Web Hosting in 2010. The Gartner Magic Quadrant is widely recognized as
one of the most influential market analyses for enterprises seeking to
evaluate cloud and hosting vendors.
As part of the company's strategic plan to expand its geographic presence
around the world, Savvis acquired Fusepoint for approximately $121 million in
cash in June. Fusepoint is well-positioned in the Canadian hosting market as
a leading provider of managed IT and colocation services, with data centers
in Toronto, Vancouver and Montreal.
In August, Savvis restructured its debt profile and closed on its senior
secured credit facilities, which include a $550 million term loan and a $75
million revolving credit facility. The proceeds were used to fund a tender
offer for the company's 3% Convertible Senior Notes due May 2012, and Savvis
accepted nearly 99% of the outstanding $345 million for payment. Proceeds
were also used to repay outstanding amounts under the company's existing
revolving credit facility and other bank and vendor financing.
Financial Outlook
"The strength in execution we saw throughout 2010, and into the fourth
quarter, gave us the confidence to announce our full year 2011 guidance at
our investor day in early December 2010," said Greg Freiberg, chief financial
officer for Savvis. "Strong fourth quarter financial results and continued
execution of our business model are expected to help position us for success
in 2011."
Savvis continues to expect the following for full year 2011:
- Revenue of $1,030 to $1,060 million
- Adjusted EBITDA of $265 to $290 million
- Total cash capital expenditures of $220 to $240 million
- Cash interest expense (net) of approximately $65 million
Investor Conference Call
Savvis will webcast an investor conference call at 10:00 a.m. ET today,
Feb. 8, 2011. Both the webcast and supporting presentation will be available
at savvis.net on the Investor Relations page. A live conference call will be
available at (866) 261-2650 for analysts in North America or +1-703-639-1221
for international analysts. A replay will be available on the website for six
months. Investors may also access the replay by dialing (888) 266-2081 in
North America or +1-703-925-2533 internationally and using the access code
1505734 through Tuesday, Feb. 22.
About Savvis
Savvis, Inc. (Nasdaq: SVVS) is a global leader in cloud infrastructure
and hosted IT solutions for enterprises. Nearly 2,500 unique clients,
including 32 of the top 100 companies in the Fortune 500, use Savvis to
reduce capital expense, improve service levels and harness the latest
advances in cloud computing. For more information, please visit
www.savvis.net.
Forward-Looking Statements
This document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from Savvis' expectations. Certain factors that could
adversely affect actual results are set forth as risk factors described in
Savvis' SEC reports and filings, including its annual report on Form 10-K for
the year ended Dec. 31, 2009, and subsequent filings. Those risk factors
include, but are not limited to, uncertainties in economic conditions,
including conditions that could pressure enterprise IT spending; introduction
of, demand for and market acceptance of Savvis' products and services;
whether or not Savvis is able to sign additional outsourcing deals;
variability in pricing for those products and services; merger and
acquisition activity by Savvis customers or other customer activity that
affects the level of business done with Savvis; rapid evolution of
technology; changes in the operating environment; and changes or proposed
changes in, or introduction of new, regulatory schemes or environments that
impact Savvis and/or its customers' businesses. The forward-looking
statements contained in this document speak only as of the date of
publication, Feb. 8, 2011. Subsequent events and developments may cause the
company's forward-looking statements to change, and the company will not
undertake efforts to revise those forward-looking statements to reflect
events after this date.
* Non-GAAP Measures
Savvis includes information pertaining to certain non-GAAP measures in
conjunction with reporting of its quarterly and year-end financial results.
Adjusted EBITDA represents income from continuing operations before
depreciation, amortization and accretion, and non-cash, equity-based
compensation and excludes acquisition and integration costs. We have included
information concerning adjusted EBITDA because we believe that in our
industry such information is a relevant measurement of a company's operating
financial performance and liquidity. Leveraged free cash flow represents
adjusted EBITDA less cash paid acquisition and integration costs, less cash
capital expenditures and less cash interest, net. We have included
information concerning leveraged free cash flow because we believe that in
our industry such information is a relevant measurement of a company's
operating financial performance and liquidity. We do not provide forward
looking guidance for certain financial data, such as income from operations,
depreciation, amortization and accretion, non-cash, equity-based
compensation, and interest income. As a result, we are unable to provide a
reconciliation of non-GAAP measures, such as adjusted EBITDA and leveraged
free cash flow, for forward looking data, including 2011 full-year guidance.
The calculations of adjusted EBITDA and leveraged free cash flow are not
specified by United States generally accepted accounting principles. Our
calculations of adjusted EBITDA and leveraged free cash flow may not be
comparable to similarly-titled measures of other companies.
SAVVIS, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
December 31,
------------
2010 2009
---- ----
Revenue $252,740 $219,819
Operating Expenses:
Cost of revenue (including non-cash,
equity-based
compensation of $1,262, $1,068,
$5,919 and $5,498) (1) 129,563 120,428
Sales, general and administrative
expenses (including
non-cash, equity-based compensation
of $3,983, $4,882, $19,759 and
$23,604) (1) 61,746 50,454
Depreciation, amortization and
accretion 47,390 38,519
------ ------
Total Operating Expenses 238,699 209,401
Income from Continuing Operations 14,041 10,418
Loss on debt extinguishment
Other income and expense 17,835 14,916
Loss from Continuing Operations
before
Income Taxes (3,794) (4,498)
Income tax (benefit) expense (688) 861
----
Loss from Continuing Operations, net
of Income Taxes (3,106) (5,359)
------ ------
Income from discontinued operations,
net
of income taxes 160 -
Net Loss $(2,946) $(5,359)
======= =======
Loss per Share from Continuing
Operations
Basic earnings per share $(0.06) $(0.10)
====== ======
Diluted earnings per share $(0.06) $(0.10)
====== ======
Weighted-Average Common Shares
Outstanding
Basic 56,285 54,036
Diluted 56,285 54,036
Year Ended
December 31,
------------
2010 2009
---- ----
Revenue $932,984 $874,414
Operating Expenses:
Cost of revenue (including non-cash,
equity-based
compensation of $1,262, $1,068,
$5,919 and $5,498) (1) 500,749 480,335
Sales, general and administrative
expenses (including
non-cash, equity-based compensation
of $3,983, $4,882, $19,759 and
$23,604) (1) 226,842 203,158
Depreciation, amortization and
accretion 180,903 150,854
------- -------
Total Operating Expenses 908,494 834,347
Income from Continuing Operations 24,490 40,067
Loss on debt extinguishment 8,735
Other income and expense 70,770 58,184
Loss from Continuing Operations
before
Income Taxes (55,015) (18,117)
Income tax (benefit) expense (995) 2,729
----
Loss from Continuing Operations, net
of Income Taxes (54,020) (20,846)
------- -------
Income from discontinued operations,
net
of income taxes 61 -
Net Loss $(53,959) $(20,846)
======== ========
Loss per Share from Continuing
Operations
Basic earnings per share $(0.98) $(0.39)
====== ======
Diluted earnings per share $(0.98) $(0.39)
====== ======
Weighted-Average Common Shares
Outstanding
Basic 55,312 53,786
Diluted 55,312 53,786
(1) Excludes depreciation, amortization and accretion, which is reported
separately.
SAVVIS, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2010 2009
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $120,344 $160,815
Trade accounts receivable, net 65,058 45,754
Prepaid expenses and other
current assets 32,359 21,217
------ ------
Total Current Assets 217,761 227,786
------- -------
Property and equipment, net 843,801 783,852
Goodwill 75,883 -
Intangible assets, net 19,540 404
Other non-current assets 26,665 12,716
------ ------
Total Assets $1,183,650 $1,024,758
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Payables and other trade accruals $73,445 $52,710
Current portion of long-term debt
and lease obligations 17,881 17,479
Other accrued liabilities 84,101 68,314
Total Current Liabilities 175,427 138,503
------- -------
Long-term debt, net of current
portion 530,649 376,089
Capital and financing method lease
obligations, net of current
portion 216,508 223,897
Other accrued liabilities 74,937 76,452
Total Liabilities 997,521 814,941
------- -------
Stockholders' Equity:
Common stock 566 545
Additional paid-in capital 886,593 862,834
Accumulated deficit (688,388) (634,429)
Accumulated other comprehensive
loss (12,642) (19,133)
------- -------
Total Stockholders' Equity 186,129 209,817
------- -------
Total Liabilities and Stockholders'
Equity $1,183,650 $1,024,758
========== ==========
SAVVIS, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended
December 31,
------------
2010 2009
---- ----
Cash Flows from Operating Activities:
Net income (loss) $(2,946) $(5,359)
(Income) loss from discontinued
operations, net of income taxes 160 -
--- ---
Income (loss) from continuing
operations, net of income
taxes (3,106) (5,359)
Reconciliation of net income (loss) from
continuing operations to net cash
provided by operating activities:
Depreciation, amortization and accretion 47,390 38,519
Non-cash, equity-based compensation 5,245 5,950
Accrued interest, net 6,894 (1,702)
Amortization of debt discount 741 3,691
Loss on debt extinguishment - -
Other, net 9 16
Net changes in operating assets and
liabilities:
Trade accounts receivable, net 7,578 859
Prepaid expenses and other current and
non-current assets (1,923) 6,458
Payables and other trade accruals 5,132 7,597
Other accrued liabilities 3,196 1,441
----- -----
Net cash provided by continuing
operations 71,156 57,470
Net cash provided by discontinued
operations 270 -
--- ---
Net cash provided by operating activities 71,426 57,470
------ ------
Cash Flows from Investing Activities:
Payments for capital expenditures (43,811) (57,132)
Acquisition of business, net of cash
acquired - -
Cash received for disposition of business 1,459 -
Net cash used in investing activities (42,352) (57,132)
------- -------
Cash Flows from Financing Activities:
Proceeds from long-term debt - -
Principal payments on long-term debt (1,375) (1,650)
Payments for debt extinguishment - -
Payments for debt issuance costs (65) -
Proceeds from stock option exercises 9,829 37
Payments for employee taxes on equity-
based instruments (229) (130)
Principal payments under capital lease
obligations (3,843) (1,055)
Other, net - (749)
--- ----
Net cash provided by (used in) financing
activities 4,317 (3,547)
----- ------
Effect of exchange rate changes on
cash and cash equivalents (1,095) 526
------ ---
Net Increase (Decrease) in Cash and Cash
Equivalents 32,296 (2,683)
Cash and Cash Equivalents, Beginning of
Period 88,048 163,498
------ -------
Cash and Cash Equivalents, End of Period $120,344 $160,815
======== ========
Supplemental Disclosures of Cash Flow
Information:
Cash paid for interest $10,500 $11,586
Year Ended
December 31,
------------
2010 2009
---- ----
Cash Flows from Operating Activities:
Net income (loss) $(53,959) $(20,846)
(Income) loss from discontinued
operations, net of income taxes 61 -
--- ---
Income (loss) from continuing
operations, net of income
taxes (54,020) (20,846)
Reconciliation of net income (loss) from
continuing operations to net cash
provided by operating activities:
Depreciation, amortization and accretion 180,903 150,854
Non-cash, equity-based compensation 25,678 29,102
Accrued interest, net 10,511 4,578
Amortization of debt discount 10,127 14,319
Loss on debt extinguishment 7,535 -
Other, net 4,244 943
Net changes in operating assets and
liabilities:
Trade accounts receivable, net (15,504) 6,331
Prepaid expenses and other current and
non-current assets (19,559) 5,893
Payables and other trade accruals 17,553 2,322
Other accrued liabilities 9,652 (7,015)
----- ------
Net cash provided by continuing
operations 177,120 186,481
Net cash provided by discontinued
operations 621 -
--- ---
Net cash provided by operating activities 177,741 186,481
------- -------
Cash Flows from Investing Activities:
Payments for capital expenditures (202,554) (132,936)
Acquisition of business, net of cash
acquired (112,790) -
Cash received for disposition of business 1,459 -
Net cash used in investing activities (313,885) (132,936)
-------- --------
Cash Flows from Financing Activities:
Proceeds from long-term debt 643,500 2,865
Principal payments on long-term debt (525,619) (6,600)
Payments for debt extinguishment (1,179) -
Payments for debt issuance costs (12,805) -
Proceeds from stock option exercises 26,367 367
Payments for employee taxes on equity-
based instruments (3,326) (1,749)
Principal payments under capital lease
obligations (23,141) (7,145)
Other, net (4,607) (2,211)
------ ------
Net cash provided by (used in) financing
activities 99,190 (14,473)
------ -------
Effect of exchange rate changes on
cash and cash equivalents (3,517) 459
------ ---
Net Increase (Decrease) in Cash and Cash
Equivalents (40,471) 39,531
Cash and Cash Equivalents, Beginning of
Period 160,815 121,284
------- -------
Cash and Cash Equivalents, End of Period $120,344 $160,815
======== ========
Supplemental Disclosures of Cash Flow
Information:
Cash paid for interest $45,584 $37,228
SAVVIS, Inc. and Subsidiaries
Unaudited Selected Condensed Consolidated Financial Information
(in thousands)
Three Months Ended
------------------
December 31,
------------
2010 2009
---- ----
Segment Revenue:
Hosting $185,697 $154,664
Network 67,043 65,155
Total Revenue $252,740 $219,819
======== ========
Segment Adjusted EBITDA:
Hosting $76,127 $59,326
Network 17,142 16,070
Corporate - Other (1) (25,482) (20,509)
Total Adjusted EBITDA (2) $67,787 $54,887
======= =======
Adjusted EBITDA Reconciliation:
Income from continuing operations $14,041 $10,418
Depreciation, amortization and
accretion 47,390 38,519
Non-cash, equity-based
compensation 5,245 5,950
Acquisition and integration costs 1,111 -
Adjusted EBITDA $67,787 $54,887
======= =======
Reconciliation of Adjusted EBITDA
to Income (Loss) from Continuing
Operations before Income Taxes:
Adjusted EBITDA $67,787 $54,887
Depreciation, amortization and
accretion (47,390) (38,519)
Non-cash, equity-based
compensation (5,245) (5,950)
Acquisition and integration costs (1,111) -
Interest income 34 35
Interest expense (18,132) (14,266)
Other income (expense) 263 (685)
----
Income (Loss) from Continuing
Operations before Income Taxes
$(3,794) $(4,498)
======= =======
Leveraged Free Cash Flow
Reconciliation:
Adjusted EBITDA $67,787 $54,887
Acquisition and integration costs (1,111)
Cash capital expenditures (43,811) (57,132)
Cash interest paid (10,500) (11,586)
Interest income 34 35
Leveraged Free Cash Flow (3) $12,399 $(13,796)
======= ========
Three Months Ended
------------------
September 30,
2010
----
Segment Revenue:
Hosting $176,724
Network 65,177
Total Revenue $241,901
========
Segment Adjusted EBITDA:
Hosting $66,892
Network 15,747
Corporate - Other (1) (22,917)
Total Adjusted EBITDA (2) $59,722
=======
Adjusted EBITDA Reconciliation:
Income from continuing operations $3,469
Depreciation, amortization and
accretion 50,335
Non-cash, equity-based
compensation 5,435
Acquisition and integration costs 483
Adjusted EBITDA $59,722
=======
Reconciliation of Adjusted EBITDA
to Income (Loss) from Continuing
Operations before Income Taxes:
Adjusted EBITDA $59,722
Depreciation, amortization and
accretion (50,335)
Non-cash, equity-based
compensation (5,435)
Acquisition and integration costs (483)
Interest income 41
Interest expense (18,391)
Other income (expense) (12,230)
-------
Income (Loss) from Continuing
Operations before Income Taxes
$(27,111)
========
Leveraged Free Cash Flow
Reconciliation:
Adjusted EBITDA $59,722
Acquisition and integration costs (483)
Cash capital expenditures (56,576)
Cash interest paid (14,298)
Interest income 41
Leveraged Free Cash Flow (3) $(11,594)
========
Year Ended
December 31,
------------
2010 2009
---- ----
Segment Revenue:
Hosting $673,352 $607,296
Network 259,632 267,118
Total Revenue $932,984 $874,414
======== ========
Segment Adjusted EBITDA:
Hosting $261,259 $239,290
Network 65,743 67,610
Corporate - Other (1) (90,824) (86,877)
Total Adjusted EBITDA (2) $236,178 $220,023
======== ========
Adjusted EBITDA Reconciliation:
Income from continuing operations $24,490 $40,067
Depreciation, amortization and
accretion 180,903 150,854
Non-cash, equity-based
compensation 25,678 29,102
Acquisition and integration costs 5,107 -
Adjusted EBITDA $236,178 $220,023
======== ========
Reconciliation of Adjusted EBITDA
to Income (Loss) from Continuing
Operations before Income Taxes:
Adjusted EBITDA $236,178 $220,023
Depreciation, amortization and
accretion (180,903) (150,854)
Non-cash, equity-based
compensation (25,678) (29,102)
Acquisition and integration costs (5,107) -
Interest income 126 226
Interest expense (67,571) (57,976)
Other income (expense) (12,060) (434)
------- ----
Income (Loss) from Continuing
Operations before Income Taxes
$(55,015) $(18,117)
======== ========
Leveraged Free Cash Flow
Reconciliation:
Adjusted EBITDA $236,178 $220,023
Acquisition and integration costs (5,107)
Cash capital expenditures (202,554) (132,936)
Cash interest paid (45,584) (37,228)
Interest income 126 226
Leveraged Free Cash Flow (3) $(16,941) $50,085
======== =======
(1) Corporate -Other adjusted EBITDA includes all costs not directly
associated with hosting services or network services. Costs not
directly associated with hosting services or network services
include, but are not limited to, general and administrative costs.
(2) Adjusted EBITDA represents income from continuing operations
before depreciation, amortization, accretion and non-cash, equity-
based compensation and excludes acquisition and integration costs.
We have included information concerning adjusted EBITDA because we
believe that in our industry such information is a relevant
measurement of a company's operating financial performance and
liquidity. The calculation of adjusted EBITDA is not specified by
United States generally accepted accounting principles. Our
calculation of adjusted EBITDA may not be comparable to similarly
titled measures of other companies.
(3) Leveraged Free Cash Flow represents adjusted EBITDA less cash
paid acquisition and integration costs, less cash capital
expenditures and less cash interest, net. We have included
information concerning leveraged free cash flow because we believe
that in our industry such information is a relevant measurement of a
company's operating financial performance and liquidity.
SAVVIS, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Year
Ended Ended
----- -----
December 31, 2010
-----------------
Revenue $252,740 $932,984
Operating Expenses:
Cost of revenue (including non-
cash, equity-based
compensation of $1,262 and
$5,919) 129,563 500,749
Sales, general and
administrative expenses
(including
non-cash, equity-based
compensation of $3,983 and
$19,759) 61,746 226,842
Depreciation, amortization and
accretion 47,390 180,903
------ -------
Total Operating Expenses 238,699 908,494
Income from Continuing
Operations 14,041 24,490
Loss on debt extinguishment - 8,735
Other income and expense 17,835 70,770
Loss from Continuing Operations
before
Income Taxes (3,794) (55,015)
Income tax expense (688) (995)
---- ----
Loss from Continuing Operations,
net
of Income Taxes (3,106) (54,020)
------ -------
Income from discontinued
operations, net
of income taxes 160 61
Net Loss $(2,946) $(53,959)
======= ========
Adjusted EBITDA $67,787 $236,178
As a percentage of revenue 27% 25%
Acquisition and integration
costs 1,111 5,107
----- -----
Adjusted EBITDA including
acquisition and integration
costs $66,676 $231,071
As a percentage of revenue 26% 25%
SAVVIS, Inc. and Subsidiaries
Unaudited Supplemental Revenue Information
(in thousands, except per square foot amounts)
Three Months Ended
------------------
December 31, March 31, June 30,
2009 2010 2010
---- ---- ----
Data Center Revenue
Colocation $86,892 $82,467 $84,281
Managed hosting 67,772 70,284 73,898
Data Center Metrics (1)
Total raised floor 1,433 1,477 1,477
Revenue space 878 889 885
Billed square feet 591 601 622
Utilization 67% 68% 70%
Average Billed Square
Feet
Colocation 592.3 572.1 586.6
Managed hosting 22.9 23.8 25.1
Total Average Billed
Square Feet 615.2 595.9 611.7
===== ===== =====
Average Monthly Data
Center Revenue
Per Billed Square Foot
(2)
Colocation $48.9 $48.1 $47.5
Managed hosting 985.4 984.5 974.4
Three Months Ended
------------------
September 30, December 31,
2010 2010
---- ----
Data Center Revenue
Colocation $95,211 $96,430
Managed hosting 81,513 89,267
Data Center Metrics (1)
Total raised floor 1,564 1,541
Revenue space 957 938
Billed square feet 678 680
Utilization 71% 73%
Average Billed Square
Feet
Colocation 623.4 651.2
Managed hosting 26.8 28.1
Total Average Billed
Square Feet 650.3 679.2
===== =====
Average Monthly Data Center
Revenue
Per Billed Square Foot
(2)
Colocation $50.9 $49.4
Managed hosting 1,012.7 1,059.5
(1) Data center metrics are calculated as of period end for each
respective quarter.
(2) Average monthly data center revenue per billed square foot is
calculated as the revenue per quarter divided by the average billed
square feet per quarter stated on a monthly basis.
SAVVIS Revenue by Vertical
Three Months Ended
------------------
December 31, March 31, June 30,
2009 2010 2010
---- ---- ----
Financial vertical $57,742 $55,532 $60,417
Other 162,077 161,055 161,339
Total Revenue $219,819 $216,587 $221,756
======== ======== ========
SAVVIS Revenue by Vertical
Three Months Ended
------------------
September 30, December 31,
2010 2010
---- ----
Financial vertical $67,007 $69,698
Other 174,894 183,042
Total Revenue $241,901 $252,740
======== ========
Network Revenue Supplemental
Information: Three Months Ended
------------------
December 31, March 31, June 30,
2009 2010 2010
---- ---- ----
Core (1) $31,483 $31,670 $33,459
Sustaining (2) 33,672 32,166 30,118
Total Network Revenue $65,155 $63,836 $63,577
======= ======= =======
Network Revenue Supplemental
Information: Three Months Ended
------------------
September 30, December 31,
2010 2010
---- ----
Core (1) $36,339 $38,443
Sustaining (2) 28,838 28,600
Total Network Revenue $65,177 $67,043
======= =======
(1) Core network includes revenue from Thomson Reuters and from other
financial vertical and data center customers, who also purchase
bundled network and hosting services.
(2) Sustaining network includes revenue from services that are either
in slower growth or declining markets or are not directly tied to
the future growth of the company's network and hosting businesses.
Investors: Peggy Reilly Tharp, +1-314-628-7491, peggy.tharp at savvis.net, or Media: George Csolak, +1-314-628-7266, george.csolak at savvis.net
Tags: February 8, Missouri, Savvis Inc., St. louis
