Terremark Worldwide Reports Third Quarter Fiscal 2009 Results

Company Exceeds EBITDA Expectations




 -- Revenues for the quarter ended December 31, 2008 were $65.9
    million, representing a 32% year-over-year increase
 -- EBITDA, as adjusted, for the third quarter was $18.4 million,
    representing a 63% year-over-year increase
 -- Income from operations for the third quarter was $8.2 million
 -- 52 new customers were added in the third quarter, bringing the
    total number of customers to 1,091
 -- Bookings were $28.6 million for the quarter ending December 31,
    2008

MIAMI, Feb. 5, 2009 (GLOBE NEWSWIRE) -- Terremark Worldwide, Inc. (Nasdaq:TMRK), a leading global provider of managed IT infrastructure services, today reported its results for the quarter ended December 31, 2008. Terremark exceeded previously announced guidance with EBITDA, as adjusted, of $18.4 million, a 63 percent year-over-year increase, and revenues of $65.9 million.

"The outstanding results Terremark achieved this quarter, despite a tough macroeconomic environment, is a testament to our strategy of having a broad base of commercial and Federal customers and diversified revenue streams from providing our customers a full range of IT infrastructure services in world-class, network-neutral facilities," said Manuel D. Medina, Chairman and CEO of Terremark. "Along with the continued growth of our commercial sales, a key driver of our Company's overall success has been the strategic investment to grow our Federal business, which uniquely positions our Company to capitalize on the many significant opportunities we expect to see in the coming months as the proposed stimulus package is approved and Federal agencies drive to enhance efficiency through the expanded use of IT under the Obama administration."

Medina added, "Given our vast Federal experience, our strong relationships with large integrators and our efforts to target civil agencies, we expect to continue to grow our already robust government business in the coming quarters."

"Our focus on managing the business prudently had a very positive impact on our overall results this quarter, and we will continue to closely monitor our key business metrics and operate with an eye on the long-term success of the Company," said Jose Segrera, Chief Financial Officer of Terremark.



 Q308 Financial Highlights
 -------------------------

  -- Total revenues for the quarter ended December 31, 2008 were $65.9
     million, within previously announced guidance and representing an
     increase of 11% compared to the second quarter of fiscal 2009.
  -- EBITDA, as adjusted, for the quarter ended December 31, 2008 was
     $18.4 million, exceeding 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 for the third quarter was $8.2 million,
     representing a 93% year-over-year increase.
  -- Gross profit margins, excluding depreciation and amortization,
     were 48% during the December 31, 2008 quarter.
  -- Cross connects billed to customers increased to 7,857 as of
     December 31, 2008 from 7,459 the previous quarter and 6,578 a
     year earlier, representing increases of 5% and 19%, respectively.
     This increase highlights the strong demand for Terremark's
     network-neutral model.
  -- Total colocation space utilization increased to 23.9% as of
     December 31, 2008 from 23.3% as of September 30, 2008.
     Utilization of built-out colocation space was 51.1% as of
     December 31, 2008. The utilization rate of built-out colocation
     space decreased due to the activation of additional space
     Terremark's NAP of the Americas in Miami.

 Business Highlights
 -------------------

Sales and Marketing



  -- During the quarter ended December 31, 2008, Terremark added 52
     new customers, for a total of 1,091 customers at the end of the
     period.
  -- Terremark had another strong bookings quarter with $28.6 million
     of new annual contract value booked in the quarter ended December
     31, 2008.

Facilities



  -- In January 2009, Terremark launched construction of the second
     datacenter at its NAP of the Capital Region campus. As of
     December 31, 2008, 80% of the first and 30% of the second
     datacenter were under contract. Terremark also announced the
     availability of its full suite of managed services at the NAP of
     the Capital Region at the start of fourth quarter of its 2009
     fiscal year following the completed deployment of its
     Infinistructure(tm) utility computing platform.
  -- Due to its strategic decision to begin construction on the second
     datacenter at the NAP of the Capital Region, the Company has
     delayed construction of the planned expansion of its facility in
     Silicon Valley.
  -- Computer Sciences Corporation (NYSE: CSC) announced in January
     2009 a strategic partnership with Terremark to provide trusted
     cloud computing services to the U.S. government. Together, CSC
     and Terremark will offer cloud services that include computing,
     storage and disaster recovery/continuity of operations that are
     delivered from a highly secure and reliable environment at
     Terremark's NAP of the Capital Region.

 Business Outlook
 ----------------

  -- For the fourth quarter of fiscal 2009, the Company expects
     revenue to range from $73.4 million to $78.4 million and EBITDA,
     as adjusted, to range from $18.7 million to $20.7 million.
  -- For the 2009 fiscal year, guidance remains between $255 million
     to $260 million of revenues and EBITDA, as adjusted, to range
     between $58 million and $60 million.
  -- For the full 2010 fiscal year, the Company expects revenues
     between $290 million to $300 million and EBITDA, as adjusted, to
     range from $80 million to $85 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 5, 2009
     at 5:00 p.m. ET, to discuss all of the above.
  -- To hear the conference call live, dial 866-831-6267 (domestic) or
     617-213-8857 (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 http://www.terremark.com, under the Investor
     Relations heading.
  -- A replay of the call will be available beginning on Thursday,
     February 5, 2009 at 8:00 p.m. (ET) by dialing 888-286-8010
     (domestic) or 617-801-6888 (international) and providing the
     following replay code: 47272407. In addition, the Webcast will be
     available on the Company's web site at http://www.terremark.com.

Additional information regarding the Company's financial performance as of and for the quarter ended December 31, 2008 and a comparison to the year-to-date fiscal year and quarter ended December 31, 2007 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 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 http://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, 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, share-based payments, including share-settled liabilities and other non-cash expenses.

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, 2008 and 2007 and the three months ended September 30, 2008, presented within this press release.



 Terremark Worldwide, Inc.
 Condensed Consolidated Balance Sheets
 (unaudited)

                            December 31,  September 30,     March 31,
                                2008           2008           2008
                           -------------  -------------  -------------
     Assets
 Current assets
  Cash and cash
   equivalents             $  47,035,356  $  58,781,462  $  96,989,932
  Restricted cash              1,107,424      1,886,215        755,386
  Accounts receivable, net    34,333,006     31,606,550     44,048,075
  Prepaid expenses and
   other current assets        9,687,548     11,283,549     10,354,169
                           -------------  -------------  -------------
   Total current assets       92,163,334    103,557,776    152,147,562
  Property and equipment,
   net                       292,964,357    283,882,758    231,674,274
  Debt issuance costs, net     7,839,101      8,263,986      9,869,503
  Other assets                 9,144,221     11,376,807      8,831,391
  Intangibles, net            13,598,127     14,204,586     15,417,502
  Goodwill                    86,139,201     86,139,201     85,919,431
                           -------------  -------------  -------------
   Total assets            $ 501,848,341  $ 507,425,114  $ 503,859,663
                           =============  =============  =============

 Liabilities and
  Stockholder's Equity
 Current liabilities
  Current portion of
   mortgage payable and
   capital lease
   obligations             $   3,701,119  $   4,235,586  $   2,999,741
  Accounts payable and
   other current
   liabilities                54,945,114     59,879,510     57,947,054
  Current portion of
   convertible debt           31,465,773     30,638,640             --
                           -------------  -------------  -------------
   Total current
    liabilities               90,112,006     94,753,736     60,946,795
  Mortgage payable, less
   current portion           251,845,581    250,951,380    249,222,856
  Convertible debt, less
   current portion            57,192,000     57,192,000     86,284,017
  Deferred rent and other
   liabilities                15,544,819      9,759,983      9,729,736
  Deferred revenue             8,316,194      8,133,079      7,154,424
                           -------------  -------------  -------------
   Total liabilities         423,010,600    420,790,178    413,337,828
                           -------------  -------------  -------------
  Commitments and
   contingencies                      --             --             --
                           -------------  -------------  -------------

 Stockholders' equity
  Series I convertible
   preferred stock                     1              1              1
  Common stock                    59,653         59,436         59,172
  Common stock warrants       10,674,538     11,102,238     11,216,638
  Additional paid-in
   capital                   425,485,408    423,999,756    420,502,619
  Accumulated deficit       (357,141,767)  (348,456,020)  (342,425,836)
  Accumulated other
   comprehensive income         (240,092)       (70,475)     1,169,241
                           -------------  -------------  -------------
   Total stockholders'
    equity                    78,837,741     86,634,936     90,521,835
                           -------------  -------------  -------------
   Total liabilities and
    stockholders' equity   $ 501,848,341  $ 507,425,114  $ 503,859,663
                           =============  =============  =============


 Terremark Worldwide, Inc.
 Condensed Consolidated Statements of Operations
 (unaudited)

                                     For the Three Months Ended
                             ----------------------------------------
                             December 31,  September 30, December 31,
                                 2008          2008          2007
                             ------------  ------------  ------------

 Revenues                    $ 65,876,736  $ 59,581,091  $ 49,963,582
                             ------------  ------------  ------------
 Expenses
  Cost of revenues, excluding
   depreciation and
   amortization                34,242,194    35,130,079    26,358,297

  General and administrative    8,752,485    10,999,927     8,634,422

  Sales and marketing           7,155,119     6,758,551     5,626,935

  Depreciation and
   amortization                 7,537,995     6,904,435     5,095,586
                             ------------  ------------  ------------
   Operating expenses          57,687,793    59,792,992    45,715,240
                             ------------  ------------  ------------
   Income (loss) from
    operations                  8,188,943      (211,901)    4,248,342
                             ------------  ------------  ------------

 Other (expenses) income
  Interest expense             (8,175,480)   (6,596,049)   (9,153,055)

  Interest income                 255,755       367,971     1,735,758

  Change in fair value of
   derivatives                 (8,222,293)   (1,481,083)     (180,257)

  Other expenses                 (503,316)     (160,588)      (17,405)
                             ------------  ------------  ------------
   Total other expenses       (16,645,334)   (7,869,749)   (7,614,959)
                             ------------  ------------  ------------
    Loss before income taxes   (8,456,391)   (8,081,650)   (3,366,617)

  Income taxes                    229,356        93,926       123,877
                             ------------  ------------  ------------

   Net loss                    (8,685,747)   (8,175,576)   (3,490,494)
 Preferred dividend              (195,250)     (195,250)     (195,250)
                             ------------  ------------  ------------
 Net loss attributable
  to common stockholders     $ (8,880,997) $ (8,370,826) $ (3,685,744)
                             ============  ============  ============
 Net loss per common share:

 Basic and diluted           $      (0.15) $      (0.14) $      (0.06)
                             ============  ============  ============
 Weighted average common
  shares outstanding - basic
  and diluted                  59,544,254    59,304,267    58,580,893
                             ============  ============  ============

 Reconciliation of Income
  (loss) from Operations to
  EBITDA, as adjusted:

 Income (loss) from
  operations                    8,188,943      (211,901)    4,248,342

 Depreciation and
  amortization                  7,537,995     6,904,435     5,095,586

 Share-based payments,
  including share-settled
  liabilities                   1,780,099     2,163,467     1,028,199

 Litigation and employment
  settlements                     769,629            --       540,000

 Certain legal and
  professional costs               86,717     1,016,693            --

 Integration expenses                  --            --       355,384
                             ------------  ------------  ------------
 EBITDA, as adjusted         $ 18,363,383  $  9,872,694  $ 11,267,511
                             ============  ============  ============

 Calculation of Gross Profit
  Margin:
 
 Revenues                      65,876,736    59,581,091    49,963,582

 Less:
 Cost of revenues, excluding
  depreciation and
  amortization                 34,242,194    35,130,079    26,358,297
                             ------------  ------------  ------------
 Gross profit                $ 31,634,542  $ 24,451,012  $ 23,605,285
                             ============  ============  ============
 Gross Profit Margin as a %
  of revenues                          48%           41%           47%
                             ============  ============  ============

 Terremark Worldwide, Inc.
 Condensed Consolidated Statements of Operations
 (unaudited)

                                            For the Nine Months Ended
                                           --------------------------
                                           December 31,  December 31,
                                               2008          2007
                                           ------------  ------------

 Revenues                                  $181,574,084  $130,573,357
                                           ------------  ------------
 Expenses

  Cost of revenues, excluding depreciation
   and amortization                         101,458,957    70,610,042

  General and administrative                 28,702,263    23,488,289

  Sales and marketing                        19,633,177    14,959,598

  Depreciation and amortization              20,085,575    13,442,547
                                           ------------  ------------
   Operating expenses                       169,879,972   122,500,476
                                           ------------  ------------
   Income from operations                    11,694,112     8,072,881
                                           ------------  ------------

 Other (expenses) income

  Interest expense                          (21,822,627)  (24,663,278)

  Interest income                             1,203,165     4,084,964

  Change in fair value of derivatives        (4,069,409)    1,424,187

  Loss on early extinguishment of debt               --   (26,949,577)

  Other financing charges                            --    (1,173,079)

  Other expenses                               (695,815)      (46,747)
                                           ------------  ------------
   Total other expenses                     (25,384,686)  (47,323,530)
                                           ------------  ------------
    Loss before income taxes                (13,690,574)  (39,250,649)

  Income taxes                                1,025,357       510,723
                                           ------------  ------------
   Net loss                                 (14,715,931)  (39,761,372)

 Preferred dividend                            (585,750)     (598,813)
                                           ------------  ------------

 Net loss attributable to common
  stockholders                             $(15,301,681) $(40,360,185)
                                           ============  ============

 Net loss per common share:

 Basic and diluted                         $      (0.26) $      (0.70)
                                           ============  ============
 Weighted average common shares
  outstanding - basic and diluted            59,345,160    58,044,864
                                           ============  ============

 Reconciliation of Income from Operations
  to EBITDA, as adjusted:

 Income from operations                      11,694,112     8,072,881

 Depreciation and amortization               20,085,575    13,442,547

 Share-based payments, including share-
  settled liabilities                         4,937,868     2,569,941

 Certain legal and professional costs         1,355,755            --

 Litigation and employment settlements          769,629       540,000

 Other non-cash expenses                        383,425            --

 Integration expenses                                --     1,004,480
                                           ------------  ------------
 EBITDA, as adjusted                       $ 39,226,364  $ 25,629,849
                                           ============  ============

 Calculation of Gross Profit Margin:

 Revenues                                   181,574,084   130,573,357

 Less:
 Cost of revenues, excluding depreciation
  and amortization                          101,458,957    70,610,042
                                           ------------  ------------
 Gross profit                              $ 80,115,127  $ 59,963,315
                                           ============  ============
 Gross Profit Margin as a % of revenues              44%           46%
                                           ============  ============


            

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