Third Quarter 2001 Results:
equinix.com
Equinix, Inc. Reports Third Quarter 2001 Financial Results; Company Signs Record Number of New Customers and Exceeds Earnings Expectations for the Quarter
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Oct. 17, 2001--Equinix, Inc. (Nasdaq:EQIX, news, msgs)
-- Total of 191 customers -- 41 new wins including MSN, Google, SBC and British Telecom
-- Sequential revenue growth of 6.2% from the previous quarter to
$17.2 million, a more than four-fold increase over same
quarter last year
-- EBITDA losses decrease 24.3% to $8.7 million from the previous
quarter; Company reaffirms target of EBITDA breakeven within
fourth quarter 2001
-- Company successfully renegotiates existing $150 million credit
facility and reaffirms fully-funded plan
Equinix, Inc. (Nasdaq:EQIX, news, msgs), creator and operator of neutral Internet Business Exchange(TM) (IBX(R)) centers, today reported its third quarter results for the period ending September 30, 2001.
Revenues for the third quarter were $17.2 million, compared with $16.2 million reported for the previous quarter, an increase of 6.2%, and a more than four-fold increase over the same quarter last year. EBITDA losses for the quarter were $8.7 million as compared to $11.5 million recorded in the previous quarter, a decrease of 24.3%. Net loss for the third quarter, excluding a restructuring charge, was $33.0 million, or a net loss per share of $0.42 on 79.1 million weighted average shares outstanding. Reported net loss for the third quarter, including the restructuring charge of $48.6 million, was $81.6 million, which represents a net loss per share of $1.03.
As of September 30, cash and cash equivalents, including restricted cash, was $198.4 million. Capital expenditures for the quarter were $34.9 million. Reflecting the strength of its customer base, Equinix's collection efforts remained strong with DSO at 43 days.
"In each quarter since our IPO, Equinix has exceeded earnings expectations," said Peter Van Camp, chairman and CEO of Equinix. "Our ability to continue to increase market share and maintain a solid financial position demonstrates successful execution in all key areas of the business. The Company remains fully funded and we reaffirm our target of EBITDA breakeven within the fourth quarter."
Customer Wins
At the end of the quarter, total customer count stood at 191 with the addition of 41 new customers such as MSN, Google, SBC, and British Telecom. The Company also recognized additional orders in the quarter from 27 existing customers including IBM, Level 3, Williams and Loudcloud. Approximately 30% of customers continue to contract across multiple IBX centers and the Company's exposure to dot-com revenue reduced to 10% of overall revenues.
Other Quarterly Events
As announced in the quarter, the Company has focused its international services strategy around new partnerships with leading international Internet exchange partners InterXion in Europe and Pihana Pacific in Asia/Pacific. These partnerships allow Equinix to address customer requirements in 29 international markets. As a result, the Company has taken a restructuring charge of $48.6 million primarily related to the write-down of European assets. This charge also includes $1.3 million related to an approximate 15% workforce reduction in the quarter. The reduction in force was taken primarily in headquarter positions and will not affect the Company's premium services, customer support or ability to grow the business.
Subsequent to September 30, the Company successfully completed the renegotiation of loan covenants and reduced its existing senior credit facility to $125 million, with a permanent paydown of $25 million. The Company also repaid $20 million, which will be available for borrowing in the future.
"The successful renegotiation of the credit facility, coupled with the cash flow savings resulting from our new international and capital build out strategy have de-leveraged the Company and enhanced our long-term financial stability," said Phil Koen, president, COO and interim CFO of Equinix. "The renegotiation of the facility in this challenging market provides Equinix with relaxed financial covenants that reflect the reality of the current market, and is a vote of confidence in the financial outlook for the Company."
Business Outlook
For the fourth quarter 2001, the Company expects revenue to be in the range of $18.0 to $20.0 million and EBITDA loss for the fourth quarter is expected to be between $3.0 and $4.0 million. Capital expenditures for the year 2001 are expected to be between $110.0 and $120.0 million. The Company is on schedule to open its seventh IBX in the New York metro area in the fourth quarter of 2001, bringing the total IBX square footage to approximately 810,000 square feet.
Full year revenues are projected to be in the range of $64.0 to $66.0 million with EBITDA losses in the range of $39.5 to $40.5 million. The Company reaffirms guidance to achieve EBITDA breakeven within the fourth quarter 2001.
About Equinix
Equinix designs, builds and operates neutral IBX(R) centers (Internet Business Exchange(TM) centers) which provide enterprises, content providers, ASPs and e-commerce companies with the power to choose from a wide variety of Internet partners. These centers facilitate the growth of the Internet and serve as the core of IP network interconnection for the 21st century. Equinix IBX centers are designed from the ground up to provide enterprises and Internet companies with service delivery, availability of bandwidth from multiple networks, scalable interconnection, complete neutrality and multi-level physical security. ISPs, bandwidth providers and infrastructure services providers have access to the services and customers they require to build and expand their businesses. Equinix customers include Cable & Wireless, Charles Schwab & Co., Inc., EYT (formerly Ernst & Young Technologies), IBM, Internap, Loudcloud, MSN, UUNET/WorldCom, and Yahoo! For more information, please visit the company's Web site at www.equinix.com.
Note to Editors: IBX is a registered trademark of Equinix, Inc. Equinix and Internet Business Exchange are trademarks of Equinix, Inc.
This press release contains forward-looking statements, including statements related to Equinix's business outlook, revenues, EBITDA, annual contract value, annual recurring revenue, capital expenditures and bookings. Actual results may differ from expectations due to a number of factors, including: the challenges of building and operating IBX centers and developing, deploying and delivering Equinix services; competition from existing and new competitors; the risk that customers who have placed orders may not install or may delay installations; and the ability to open new IBX centers and deliver services when requested by our customers. The matters discussed in this press release also involve risk and uncertainties described from time to time in Equinix's filings with the SEC. In particular, see Equinix's quarterly and annual reports filed with the SEC. Equinix does not assume any obligation to update the forward-looking information contained in this press release. |
