Terremark Worldwide Reports Fourth Quarter, Fiscal Year 2010 Results
Company Delivers Another Record Bookings Quarter, Strong Revenue and EBITDA Results
- Total revenues for the fiscal year ended March 31, 2010 were $292.3 million, representing a 17% increase over the prior fiscal year; Total revenues for the quarter ended March 31, 2010 were $82.5 million, representing increases of 11% compared to the third quarter of fiscal 2010 and 20% over the previous fiscal year, respectively.
- EBITDA, as adjusted, for fiscal year 2010 was $81.0 million, representing a 32% increase over the prior fiscal year; EBITDA, as adjusted, for the fourth quarter was $26.5 million, representing increases of 34% compared to the third quarter of fiscal 2010 and 20% over the previous fiscal year, respectively.
- Bookings were a record $45.5 million for the quarter ended March 31, 2010
- Income from operations for the fourth quarter was $12.4 million, representing a 15% year-over-year increase
- 56 new customers were added in the fourth quarter, bringing the total number of customers to 1,350
MIAMI--(BUSINESS WIRE)-- Terremark Worldwide, Inc. (NASDAQ:TMRK), a leading global provider of managed IT infrastructure services, today reported its results for the quarter and fiscal year ended March 31, 2010.
The company delivered record bookings of $45.5 for the quarter ended March 31, 2010. For fiscal year 2010, Terremark produced total revenues of $292.3 million and EBITDA, as adjusted, of $81.0 million, respectively, in line with previously announced guidance.
“With another very strong quarter and fiscal year, Terremark continues to produce the positive results that reflect the strong demand among federal and enterprise customers for our suite of industry-leading solutions across our global footprint and our proven ability to successfully execute our strategic plan,” said Manuel D. Medina, Chairman and CEO of Terremark. “Our consecutive quarters of record bookings, robust pipeline and strategic expansion create a solid base for fiscal 2011 and a clear path for sustained growth.”
“Our strong performance across all our key financial metrics, and the positive momentum we have generated in previous quarters, validates the confidence we have in our ability to deliver strong results,” said Jose Segrera, Chief Financial Officer of Terremark.
Q4 FY10 Financial Highlights
- Total revenues for the quarter and fiscal year ended March 31, 2010 were $82.5 million, representing increases of 11% compared to the third quarter of fiscal 2010 and 20% over the previous fiscal year, respectively. Total revenues for the fiscal year ended March 31, 2010 were $292.3 million, representing a 17% increase over the prior fiscal year.
- EBITDA, as adjusted, for the fourth quarter was $26.5 million, representing a 20% year-over-year increase and a 34% sequential increase; EBITDA, as adjusted, for fiscal year 2010 was $81.0 million, representing a 32% increase over the prior fiscal year. 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 fourth quarter was $12.4 million, representing a 15% year-over-year increase.
- Gross profit margins, excluding depreciation and amortization, were 50% for the quarter and 45% for the fiscal year ended March 31, 2010.
- Cross connects billed to customers increased to 9,154 as of March 31, 2010 from 8,883 the previous quarter and 8,339 a year earlier, representing increases of 3% and 10%, respectively. The consistent increase in cross connects billed to customers underscores the compelling value of Terremark’s network-neutral model.
- Utilization of total colocation space utilization was 29.0% as of March 31, 2010. Utilization of built-out colocation space was 54.4% as of March 31, 2010.
Q4 FY10 Business Highlights
- Terremark increased the annualized cloud computing run rate to $21.9 million during the fourth quarter, a 27% increase from the previous quarter. The company’s cloud computing solutions continue to gain traction with Fortune 500 enterprises and federal government agencies looking to deploy and manage applications faster, while substantially reducing their total cost of ownership.
- During the quarter ended March 31, 2010, Terremark added 56 new customers, for a total of 1,350 customers at the end of the period.
- Terremark had another quarter of record bookings with $45.5 million of new annual contract value booked in the quarter ended March 31, 2010. The company had $30.1 million of recurring bookings in the quarter, also the best in the company’s history.
- Terremark recently announced the launch of the third datacenter at its Network Access Point (NAP) of the Capital Region campus. With more than 65 percent of the available datacenter space at the campus contracted, including the recently launched third datacenter, the company acquired 27 acres of land adjacent to the campus to accommodate future success-based growth. The $5-million land acquisition provides Terremark the ability to add at least 250,000 square feet of high-quality datacenter space and close to 100,000 square feet of Class A office space, effectively doubling the size of the campus. Terremark also unveiled the NAP of the Capital Region’s 72,000-square-foot headquarters building, which includes a 150-seat auditorium built to the Federal government’s Physical Security Standards for Sensitive Compartmented Information Facilities (SCIF) and approximately 50,000 square feet of Class A office space that can be built to SCIF specifications in order to meet customer demands.
Business Outlook
- For the first quarter of fiscal 2011, the Company expects revenues to range from $77 million to $79 million and EBITDA, as adjusted, to range from $18 million to $20 million.
- For the full 2011 fiscal year, the Company raises guidance of revenues to range from $338 million to $343 million and EBITDA, as adjusted, to range from $98 million to $101 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, May 27, 2010 at 5:00 p.m. ET, to discuss all of the above.
- To participate on the conference call, please dial 800-573-4840 (domestic) or 617-224-4326 (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, May 27, 2010 at 8:00 p.m. (ET) by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and providing the following replay code: 33029808. 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 and fiscal year ended March 31, 2010 and a comparison to the quarter and fiscal year ended March 31, 2009 and the quarter ended December 31, 2009 can be found on the attached balance sheet and statement of operations and in the Company's Annual Report on Form 10-K.
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® 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, including uncertainties inherent in government contracting, its 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, 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, 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 twelve months ended March 31, 2010 and 2009 and the three months ended December 31, 2009, presented within this press release.
| Terremark Worldwide, Inc. | ||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2010 | 2009 | 2009 | ||||||||||
| Assets | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 53,468 | $ | 59,560 | $ | 51,786 | ||||||
| Restricted cash | - | - | 1,107 | |||||||||
| Accounts receivable, net | 50,266 | 41,885 | 35,816 | |||||||||
| Prepaid expenses and other current assets | 13,023 | 13,234 | 9,246 | |||||||||
| Total current assets | 116,757 | 114,679 | 97,955 | |||||||||
| Property and equipment, net | 404,656 | 376,994 | 301,002 | |||||||||
| Debt issuance costs, net | 3,384 | 3,369 | 7,409 | |||||||||
| Other assets | 17,578 | 17,798 | 10,845 | |||||||||
| Intangibles, net | 11,759 | 12,236 | 12,992 | |||||||||
| Goodwill | 96,112 | 95,946 | 86,139 | |||||||||
| Total assets | $ | 650,246 | $ | 621,022 | $ | 516,342 | ||||||
| Liabilities and Stockholder's Equity | ||||||||||||
| Current liabilities | ||||||||||||
| Current portion of capital lease obligations and secured loans | $ | 4,919 | $ | 4,212 | $ | 3,823 | ||||||
| Accounts payable and other current liabilities | 74,640 | 62,557 | 55,517 | |||||||||
| Interest payable | 17,308 | 3,247 | 4,835 | |||||||||
| Current portion of convertible debt | - | - | 32,376 | |||||||||
| Total current liabilities | 96,867 | 70,016 | 96,551 | |||||||||
| Secured loans, less current portion | 388,835 | 388,207 | 252,728 | |||||||||
| Convertible debt, less current portion | 57,192 | 57,192 | 57,192 | |||||||||
| Deferred rent and other liabilities | 18,351 | 17,514 | 19,133 | |||||||||
| Deferred revenue | 8,514 | 8,424 | 7,740 | |||||||||
| Total liabilities | 569,759 | 541,353 | 433,344 | |||||||||
| Commitments and contingencies | - | - | - | |||||||||
| Stockholders' equity | ||||||||||||
| Series I convertible preferred stock | - | - | - | |||||||||
| Common stock | 65 | 65 | 60 | |||||||||
| Common stock warrants | 8,901 | 8,901 | 8,960 | |||||||||
| Additional paid-in capital | 456,860 | 454,364 | 428,251 | |||||||||
| Accumulated deficit | (384,667 | ) | (383,486 | ) | (352,994 | ) | ||||||
| Accumulated other comprehensive loss | (672 | ) | (175 | ) | (1,279 | ) | ||||||
| Total stockholders' equity | 80,487 | 79,669 | 82,998 | |||||||||
| Total liabilities and stockholders' equity | $ | 650,246 | $ | 621,022 | $ | 516,342 | ||||||
| Terremark Worldwide, Inc. | ||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||
| (In thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| For the Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2010 | 2009 | 2009 | ||||||||||
| Revenues | $ | 82,511 | $ | 74,272 | $ | 68,896 | ||||||
| Expenses | ||||||||||||
| Cost of revenues, excluding depreciation and amortization | 41,234 | 41,880 | 34,975 | |||||||||
| General and administrative | 9,260 | 8,807 | 8,092 | |||||||||
| Sales and marketing | 9,202 | 7,197 | 6,916 | |||||||||
| Depreciation and amortization | 10,408 | 9,708 | 8,139 | |||||||||
| Operating expenses | 70,104 | 67,592 | 58,122 | |||||||||
| Income from operations | 12,407 | 6,680 | 10,774 | |||||||||
| Other (expenses) income | ||||||||||||
| Interest expense | (12,994 | ) | (13,656 | ) | (8,157 | ) | ||||||
| Interest income | 59 | 85 | 129 | |||||||||
| Change in fair value of derivatives | 342 | (367 | ) | 184 | ||||||||
| Financing charges and other | (754 | ) | 59 | 113 | ||||||||
| Total other expenses | (13,347 | ) | (13,879 | ) | (7,731 | ) | ||||||
| (Loss) income before income taxes | (940 | ) | (7,199 | ) | 3,043 | |||||||
| Income tax expense (benefit) | 241 | 879 | (1,103 | ) | ||||||||
| Net (loss) income | (1,181 | ) | (8,078 | ) | 4,146 | |||||||
| Preferred dividend | (234 | ) | (234 | ) | (221 | ) | ||||||
| Earnings attributable to participating security holders | - | - | (462 | ) | ||||||||
| Net (loss) income attributable to common stockholders | $ | (1,415 | ) | $ | (8,312 | ) | $ | 3,463 | ||||
| Net (loss) income per common share: | ||||||||||||
| Basic and diluted | $ | (0.02 | ) | $ | (0.13 | ) | $ | 0.06 | ||||
| Weighted average common shares outstanding - basic and diluted | 65,017 | 64,803 | 59,723 | |||||||||
| Reconciliation of Income from Operations to EBITDA, as adjusted: | ||||||||||||
| Income from operations | 12,407 | 6,680 | 10,774 | |||||||||
| Depreciation and amortization | 10,408 | 9,708 | 8,139 | |||||||||
| Share-based payments, including share-settled liabilities | 3,093 | 2,307 | 2,791 | |||||||||
| Certain legal and professional costs | 615 | 801 | 257 | |||||||||
| Litigation and employment settlements | - | 278 | 127 | |||||||||
| EBITDA, as adjusted | $ | 26,523 | $ | 19,774 | $ | 22,088 | ||||||
| Calculation of Gross Profit Margin: | ||||||||||||
| Revenues | 82,511 | 74,272 | 68,896 | |||||||||
| Less: | ||||||||||||
| Cost of revenues, excluding depreciation and amortization | 41,234 | 41,880 | 34,975 | |||||||||
| Gross profit | $ | 41,277 | $ | 32,392 | $ | 33,921 | ||||||
| Gross Profit Margin as a % of Revenues | 50 | % | 44 | % | 49 | % | ||||||
| Terremark Worldwide, Inc. | ||||||||
| Condensed Consolidated Statements of Operations | ||||||||
| (In thousands, except per share data) | ||||||||
| (Unaudited) | ||||||||
| For the Twelve Months Ended | ||||||||
| March 31, | March 31, | |||||||
| 2010 | 2009 | |||||||
| Revenues | $ | 292,347 | $ | 250,470 | ||||
| Expenses | ||||||||
| Cost of revenues, excluding depreciation and amortization | 159,596 | 136,434 | ||||||
| General and administrative | 34,782 | 36,795 | ||||||
| Sales and marketing | 28,774 | 26,549 | ||||||
| Depreciation and amortization | 37,882 | 28,224 | ||||||
| Operating expenses | 261,034 | 228,002 | ||||||
| Income from operations | 31,313 | 22,468 | ||||||
| Other (expenses) income | ||||||||
| Interest expense | (49,643 | ) | (29,980 | ) | ||||
| Interest income | 356 | 1,332 | ||||||
| Change in fair value of derivatives | (1,464 | ) | (3,886 | ) | ||||
| Financing charges and other | 60 | (582 | ) | |||||
| Loss on early extinguishment of debt | (10,275 | ) | - | |||||
| Total other expenses | (60,966 | ) | (33,116 | ) | ||||
| Loss before income taxes | (29,653 | ) | (10,648 | ) | ||||
| Income tax expense (benefit) | 2,020 | (79 | ) | |||||
| Net loss | (31,673 | ) | (10,569 | ) | ||||
| Preferred dividend | (937 | ) | (807 | ) | ||||
| Net loss attributable to common stockholders | $ | (32,610 | ) | $ | (11,376 | ) | ||
| Net loss per common share: | ||||||||
| Basic and diluted | $ | (0.51 | ) | $ | (0.19 | ) | ||
| Weighted average common shares outstanding - basic and diluted |
63,977 |
59,438 | ||||||
| Reconciliation of Income from Operations to EBITDA, as adjusted: | ||||||||
| Income from operations | 31,313 | 22,468 | ||||||
| Depreciation and amortization | 37,882 | 28,224 | ||||||
| Share-based payments, including share-settled liabilities | 9,548 | 7,729 | ||||||
| Certain legal and professional costs | 1,809 | 1,613 | ||||||
| Litigation and employment settlements | 420 | 897 | ||||||
| Other non-cash expenses | - | 383 | ||||||
| EBITDA, as adjusted | $ | 80,972 | $ | 61,314 | ||||
| Calculation of Gross Profit Margin: | ||||||||
| Revenues | 292,347 | 250,470 | ||||||
| Less: | ||||||||
| Cost of revenues, excluding depreciation and amortization | 159,596 | 136,434 | ||||||
| Gross profit | $ | 132,751 | $ | 114,036 | ||||
| Gross Profit Margin as a % of Revenues | 45 | % | 46 | % | ||||
CONTACT:
Terremark Worldwide, Inc.
Media Relations
Xavier Gonzalez, 305-961-3134
xgonzalez@terremark.com
or
Investor Relations
Hunter Blankenbaker, 305-961-3109
hblankenbaker@terremark.com
KEYWORDS: United States North America Florida
INDUSTRY KEYWORDS: Technology Data Management Electronic Design Automation Hardware Internet Networks Software Telecommunications Nanotechnology Other Technology Security Mobile/Wireless
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