-- 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%
============ ============