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