Terremark Worldwide Reports Fourth Quarter Full Year Fiscal 2007 Results
Terremark Worldwide Reports Fourth Quarter Full Year Fiscal 2007 Results
Thursday June 14, 2007 16:10:32
MIAMI----Terremark Worldwide, Inc. Nasdaq:TMRK:
Revenues increase 61% year over year; 24% sequentially
EBITDA increases from $554 thousand to $16.3 million year over year
Adds 140 new customers for the year and 33 new customers in the fourth
quarter including YouTube, Televideo Services and ICANN
Bookings of $16.5 million for the quarter ending March 31, 2007
Terremark Worldwide, Inc. Nasdaq:TMRK, a leading global operator of
carrier-neutral integrated Internet exchanges and a provider of managed
IT infrastructure solutions utilizing cutting edge virtualization and
utility computing technologies, today reported its results for the
quarter and fiscal year ended March 31, 2007.
Total revenues for the quarter ended March 31, 2007 were $30.7 million,
consistent with previously announced guidance and represented an
increase of 24% compared to the third quarter of fiscal 2007. Total
revenues for the fiscal year were $100.9 million, an increase of 61%
over fiscal 2006. Excluding project type revenue, revenue increased by
4% during the March 2007 quarter compared to the December 2006 quarter.
EBITDA, as adjusted, for the quarter and fiscal year ended March 31,
2007 was $5.4 million and $16.3 million, compared to EBITDA, as
adjusted, of $4.8 million the prior quarter and $554 thousand in the
prior fiscal year, respectively. EBITDA, as adjusted, is defined as
income loss from operations less depreciation, amortization, gain on
sale of asset and share-based payments, including share-settled
liabilities. EBITDA, as adjusted, should be considered in addition to,
but not in lieu of, income loss from operations reported under GAAP.
"We are pleased that our revenue momentum continued in the fourth
quarter, which capped a very important year in the company’s
development," said Manuel D. Medina, Chairman and CEO of Terremark
Worldwide, Inc. "In addition to growing our revenue base by 61% over the
previous year, we increased our utilization of our total footprint by
54% and began to benefit from the leverage in our business model,
increasing EBITDA to $16.3 million. At the same time we took steps to
make Terremark a key factor in the network and IT solutions provider
space, including significant progress on our expansion program and
growing our managed services offerings. Subsequent to the end of the
quarter we completed our acquisition of Data Return, obtained
commitments for a $250 million debt refinancing and launched our new
facility, known as the NAP of the Capital Region, at the previously
announced expansion site in Virginia.”
Mr. Medina continued, “We are excited about
these developments and have now uniquely positioned Terremark as a
carrier neutral operator of world class data centers that also provides
customers with a full suite of managed services including the latest
offerings in utility computing and virtualization. We now have the
products, team and financing in place, and are very optimistic about
2008,” he concluded.
Data center expenses were $17.5 million for the quarter ended March 31,
2007. Gross profit margins, excluding depreciation and amortization,
were 43% during the March 31, 2007 quarter.
As of March 31, 2007, Terremark's cash and cash equivalents were $105
million and working capital was approximately $102 million.
Total colocation space utilization increased to 18.6% as of March 31,
2007 from 17.4% as of December 31, 2006. Utilization of built-out
colocation space increased to 61.1% as of March 31, 2007 from 57.1% as
of December 31, 2006.
Cross connects billed to customers increased to 5,594 as of March 31,
2007 from 5,271 the previous quarter and 4,007 a year earlier,
representing increases of 6% and 40%, respectively.
During the quarter ended March 31, 2007, Terremark added 33 new
customers, for a total of 628 customers at the end of the period.
Terremark booked $16.5 million of new annual contract value during the
quarter ended March 31, 2007, representing eight consecutive quarters of
strong bookings
For the quarter ended March 31, 2007, revenue churn was less than 1% for
the commercial sector and 0% for the Federal government sector. The
Company defines churn as annualized revenue lost as a percentage of
annualized revenue for the most recent quarter.
Business Outlook
For the quarter ending June 30, 2007, the Company expects revenue to
range from $32.5 million to $33.5 million and EBITDA, as adjusted, to
range from $6.0 million to $6.5 million. The revenue estimate includes
approximately $5.0 million from Data Return and $2 million of project
related revenues. The EBITDA estimate includes $250 thousand from Data
Return.
For the full 2008 fiscal year, the Company expects revenues to be in the
range of $185 million to $190 million and EBITDA, as adjusted, to range
from $38 million to $43 million. These figures include 10 months of Data
Return revenue and EBITDA.
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.
The Company will hold a conference call today, June 14, 2007 at 5:00
p.m. ET, to discuss all of the above. To hear the conference call live,
please dial 866-831-6162 domestic or 617-213-8852 international five
to ten minutes before the call and reference the passcode: TMRK Call. A
simultaneous live Webcast of the call will be available over the
Internet at http://www.terremark.com,
under the Investor Relations heading.
A replay of the call will be available beginning on Thursday, June 14,
2007 at 7:00 p.m. ET by dialing 888-286-8010 domestic or
617-801-6888 international and providing the following replay code:
90998467. 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 fiscal year and quarter ended March 31, 2007 and a
comparison to the fiscal year and quarter ended March 31, 2006 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, Inc. Nasdaq:TMRK is the leading global operator
of carrier-neutral integrated Internet Exchanges and provider of managed
IT infrastructure solutions utilizing cutting edge virtualization and
utility computing technologies. Terremark provides the ultimate in
managed IT services to customers around the world, delivering its
portfolio of services from the United States, Europe and Latin America.
Terremark’s utility computing platform,
Infinistructure™, has redefined the standards
for scalable, flexible, high-performance managed infrastructure, and its
innovative digitalOps® service delivery
platform provides a comprehensive systems management solution for
mission-critical IT operations. Terremark delivers a complete range of
solutions from collocation, exchange point, managed hosting and security
services, to a suite of fully managed IT solutions for government and
enterprise. 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, 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. 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 and share-based payments, including share-settled
liabilities.
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 months ended March 30, 2007 and 2006 and December
31, 2006, presented within this press release.
Terremark Worldwide, Inc.
Condensed Balance Sheets
March 31,
March 31,
2007
2006
Assets
Current assets
Cash and cash equivalents
$ 105,090,779
$ 20,401,934
Restricted cash
832,178
474,073
Accounts receivable, net
23,586,471
10,445,114
Current portion of capital lease receivable
2,616,175
2,507,029
Prepaid expenses and other current assets
5,085,263
2,558,942
Total current assets
137,210,866
36,387,092
Restricted cash
1,602,963
3,814,842
Property and equipment, net
137,936,954
129,893,318
Debt issuance costs, net
5,898,355
6,963,232
Other assets
5,439,708
3,202,329
Capital lease receivable, net of current portion
1,885,646
4,004,449
Intangibles, net
2,900,000
3,680,000
Goodwill
16,771,189
16,771,189
Total assets
$ 309,645,681
$ 204,716,451
Liabilities and Stockholder's Equity
Current liabilities
Current portion of debt and capital lease obligations
$ 2,221,677
$ 1,890,108
Accounts payable and other current liabilities
29,752,638
21,469,317
Interest payable
3,663,248
3,833,288
Total current liabilities
35,637,563
27,192,713
Mortgage payable, less current portion
45,531,211
45,795,552
Convertible debt
69,914,065
59,102,452
Derivative embedded within convertible debt, at estimated fair value
16,796,865
24,960,750
Notes payable, less current portion
42,279,711
25,614,140
Deferred rent and other liabilities
3,507,173
3,267,481
Capital leases obligations, less current portion
1,738,314
852,311
Deferred revenue
4,742,258
4,094,735
Total liabilities
220,147,160
190,880,134
Commitments and contingencies
-
-
Stockholders' equity
Series I convertible preferred stock
1
1
Common stock
55,813
44,490
Common stock warrants
12,596,638
13,251,660
Common stock options
582,004
582,004
Additional paid-in capital
376,556,002
291,607,528
Accumulated deficit
300,197,561
283,823,243
Accumulated other comprehensive income loss
89,991
317,756
Treasury stock - and 865,202 shares
-
7,220,637
Note receivable
184,367
287,730
Total stockholders' equity
89,498,521
13,836,317
Total liabilities and stockholders' equity
$ 309,645,681
$ 204,716,451
Terremark Worldwide, Inc.
Consolidated Statement of Operations
For the Three Months Ended
March 31,
December 31,
March 31,
2007
2006
2006
Revenues
$ 30,692,010
$ 24,668,688
$ 19,015,338
Expenses
Cost of revenues, excluding depreciation
17,469,747
12,972,865
11,571,763
General and administrative
5,042,472
4,909,434
4,652,400
Sales and marketing
3,087,560
3,092,271
2,492,072
Depreciation and amortization
2,906,187
2,709,116
2,481,771
Operating expenses
28,505,966
23,683,685
21,198,006
Income loss from operations
2,186,044
985,003
2,182,668
Other income expenses
Change in fair value of derivatives embedded within convertible
debt
1,044,391
4,985,854
13,316,138
Interest expense
7,816,578
6,908,695
6,455,498
Interest income
403,849
270,852
381,982
Other, net
2,509
4,306
269,245
Total other income expenses
6,365,829
11,628,003
19,658,899
Income loss before income taxes
4,179,785
10,643,000
21,841,567
Income taxes
81,981
132,856
-
Net loss
4,261,767
10,775,856
21,841,567
Preferred dividend
188,650
161,700
169,700
Net loss attributable to common stockholders
$ 4,450,417
$ 10,937,556
$ 22,011,267
Net loss per common share:
Basic and diluted
$ 0.10
$ 0.25
$ 0.50
Weighted average common shares outstanding - basic and diluted
45,289,883
43,937,776
42,973,114
Reconciliation of Loss from Operations to EBITDA, as adjusted:
Income loss from operations
2,186,044
985,003
2,182,668
Depreciation and amortization
2,906,187
2,709,116
2,481,771
Share-based payments, including share-settled liabilities
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