Internap Reports Third Quarter 2012 Financial Results
-- Revenue of $68.1 million up 10 percent versus the third quarter of 2011; --
Adjusted EBITDA(1) of $12.5 million up 11 percent versus the third quarter of
2011; -- Premium, company-controlled data center space deployed in Los Angeles
and Atlanta in the third quarter of 2012; -- Announces intention to construct a
new premium, company-controlled data center in the New York Metro market.
ATLANTA, Oct. 25, 2012 /PRNewswire via COMTEX/ -- Internap Network Services
Corporation (INAP), a provider of intelligent IT Infrastructure services, today
announced financial results for the third quarter of 2012.
"Continued growth in our data center services segment combined with a keen focus
on operational excellence enabled the solid growth in Adjusted EBITDA
profitability during the third quarter of 2012," said Eric Cooney, President and
Chief Executive Officer of Internap. "As the successful sale of our colocation,
hosting and cloud services fills capacity in our existing NY metro data centers,
we have made the decision to expand to support continued growth in this key metro
market. We are announcing today that we have secured a property and expect to
bring a new premium data center on-line in the NY metro market during the fourth
quarter of 2013."
Third Quarter 2012 Financial Summary
YoYQoQ
3Q 20123Q 20112Q 2012GrowthGrowth
Revenues:
Data center services$42,139$34,114$41,49324%2%
IP services25,99027,90027,194-7%-4%
Total Revenues$68,129$62,014$68,68710%-1%
Operating Expenses$68,213$62,439$68,5969%-1%
GAAP Net Loss$(2,450)$(1,788)$(1,997)37%23%
Normalized Net (Loss)Income2$(963)$(575)$263n/mn/m
Segment Profit$34,556$31,227$36,04611%-4%
Segment Profit Margin50.7%50.4%52.5%30 BPS-180 BPS
Adjusted EBITDA$12,467$11,263$12,19011%2%
Adjusted EBITDA Margin18.3%18.2%17.7%10 BPS60 BPS
Revenue
Revenue totaled $68.1 million compared with $62.0 million in the third quarter of
2011 and $68.7 million in the second quarter of 2012. Revenue from data center
services increased year-over-year and sequentially. IP services revenue decreased
compared with both the third quarter of 2011 and the second quarter of 2012.
Data center services revenue improved 24 percent year-over-year and 2 percent
sequentially to $42.1 million. The year-over-year revenue increase was
attributable to organic growth in the data center services segment and to the
fourth quarter 2011 acquisition of Voxel. The sequential increase was driven by
increased sales of colocation in company-controlled data centers and favorable
growth in hosting services.
IP services revenue totaled $26.0 million, a decrease of 7 percent compared with
the third quarter of 2011 and 4 percent sequentially, as traffic growth was
offset by per unit price declines in IP. The sequential decline was also a result
of higher non-recurring IP equipment sales in the second quarter of 2012.
Net (Loss) Income
GAAP net loss was $(2.5) million, or $(0.05) per share, compared with $(1.8)
million, or $(0.04) per share, in the third quarter of 2011 and $(2.0) million,
or $(0.04) per share, in the second quarter of 2012.
Normalized net loss, which excludes the impact of stock-based compensation
expense and items that management considers non-recurring, was $(1.0) million, or
$(0.02) per share, compared with $(0.6) million, or $(0.01) per share, in the
third quarter of 2011. Normalized net income was $0.3 million or $0.01 per share,
in the second quarter of 2012.
Segment Profit and Adjusted EBITDA
Segment profit totaled $34.6 million in the third quarter, an increase of 11
percent year-over-year. Sequentially, segment profit declined 4 percent. Segment
margin2 was 50.7 percent, increasing 30 basis points compared with the third
quarter of 2011. Segment margin decreased 180 basis points compared with the
second quarter of 2012.
Segment profit in data center services was $18.6 million, or 44.1 percent of data
center services revenue. IP services segment profit was $16.0 million, or 61.4
percent of IP services revenue. An increasing proportion of higher-margin
services, specifically colocation sold in company controlled data centers and
hosting services, benefited data center services segment profit compared with the
third quarter of 2011. Higher seasonal power costs drove a decrease in data
center segment profit compared with the second quarter of 2012. Data center
services segment margin increased 410 basis points year-over-year and decreased
130 basis points sequentially to 44.1 percent. IP services segment profit
decreased 9 percent compared with the third quarter of 2011. Sequentially, IP
segment profit decreased 7 percent. Lower non-recurring IP equipment sales and IP
transit revenue drove the year-over-year and sequential decreases in segment
margins. IP services segment margin decreased 170 basis points year-over-year and
190 basis points sequentially to 61.4 percent.
Adjusted EBITDA totaled $12.5 million in the third quarter, an 11 percent
increase compared with the third quarter of 2011 and a 2 percent increase over
the second quarter of 2012. Adjusted EBITDA margin was 18.3 percent in the third
quarter of 2012, up 10 basis points year-over-year and 60 basis points
sequentially. The year-over-year increase in Adjusted EBITDA was attributable to
increased segment profit in our data center services segment. The sequential
Adjusted EBITDA improvement was driven by lower cash operating expenses.
Balance Sheet and Cash Flow Statement
Cash and cash equivalents totaled $26.4 million at September 30, 2012. Total debt
was $137.6 million, net of discount, at the end of the quarter, including $49.5
million in capital lease obligations.
Cash generated from operations for the three months ended September 30, 2012 was
$7.8 million. Capital expenditures over the same period were $25.1 million.
Recent Operational Highlights
Historical trends of key financial and operational metrics can be found in a
supplementary data schedule on Internap's website at
ir.internap.com.
We had approximately 3,700 customers at September 30, 2012.
In September, we opened our Los Angeles premium data center, which provides the
highest levels of scalability, redundancy and energy efficiency. This facility
will total 55,000 net sellable square feet at full deployment and features the
latest in data center technology including a concurrently maintainable N+1
architecture, high-power density and award winning green initiatives.
State-of-the art technology provides for high-power density configurations of up
to 12kW per rack and high efficiency cooling options.
We expanded our Atlanta premium data center, which features the latest in data
center design elements including modular Uninterruptible Power Supply units and
high-efficiency cooling solutions to enable power configurations of up to 12kW
per rack. This facility will add an incremental 31,000 net sellable square feet
at full deployment and is designed to seamlessly connect colocation, managed
hosting and cloud environments through a secure Layer 2 Virtual Local Area
Network.
We announced that we will construct a new premium, company-controlled data center
in the New York Metro market that we expect to be operational in the fourth
quarter of 2013. Like Internap's other company-controlled data centers, this
facility will offer customers a highly-reliable and flexible IT Infrastructure
platform. It will maintain a full range of customer amenities and will feature a
modular power design that enables our customers to increase their power densities
to over 12kW per rack without taking on additional space.
In August, we amended our credit facility to increase borrowing capacity by $30
million, bringing our total bank facility to $137.25 million.
Internap won top honors in the Golden Bridge Awards for our Agile Hosting
Service, selected as Best Cloud Computing Service in the New Products and
Innovations category.
Internap received the 2012 Cloud Computing Excellence Award for our Agile Hosting
Service.
The U.S. Green Building Council recently awarded Leadership in Energy and
Environmental Design (LEED) Gold certification to our Dallas data center. In
addition to receiving LEED certification, this facility became the first
commercial data center in Texas to achieve the Green Building Initiative's Green
Globe? certification in February 2012.
Internap was named to the InformationWeek 500 List of Top Technology Innovators
for Green Achievements. Ranked number 65 on the list, we were recognized for
energy efficiency and sustainability practices at our state-of-the-art Santa
Clara, California data center.
1 Adjusted EBITDA and Normalized Net Income (Loss) are non-GAAP financial
measures and are defined in an attachment to this press release entitled
"Non-GAAP (Adjusted) Financial Measures." Reconciliations between GAAP
information and non-GAAP information related to Adjusted EBITDA and Normalized
Net (Loss) Income are contained in the tables entitled "Reconciliation of Loss
from Operations to Adjusted EBITDA," and "Reconciliation of Net (Loss) Income and
Basic and Diluted Net (Loss) Income Per Share to Normalized Net (Loss) Income and
Basic and Diluted Normalized Net (Loss) Income Per Share" in the attachment.
2 Segment profit and segment margin are non-GAAP financial measures and are
defined in an attachment to this press release entitled "Non-GAAP (Adjusted)
Financial Measures." Reconciliations between GAAP information and non-GAAP
information related to Segment profit and segment margin are contained in the
table entitled "Segment Profit and Segment Margin" in the attachment.
Conference Call Information:
Internap's third quarter 2012 conference call will be held today at 5:00 p.m. ET.
Listeners may connect to a webcast of the call, which will include accompanying
presentation slides, on the investor services section of Internap's web site at
ir.internap.com. The call can be also accessed by dialing
866-515-9839. International callers should dial 631-813-4875. An online archive
of the webcast presentation will be available for one month following the call.
An audio-only replay will be accessible from Thursday, October 25, 2012 at 8 p.m.
ET through Wednesday, October 31, 2012 at 855-859-2056 using the replay code
40810615. International callers can listen to the archived event at 404-537-3406
with the same code.
About Internap
Internap provides intelligent IT Infrastructure services that combine unmatched
performance and platform flexibility to enable our customers to focus on their
core business, improve service levels and lower the cost of IT operations. Our
unique trio of route-optimized enterprise IP, TCP acceleration and a global
content delivery network improves website performance and delivers superior
end-user experiences. Our scalable colocation, hosting, private cloud, public
cloud and hybrid offerings provide enterprises the flexibility to adapt to
changing business needs and future-proof their IT Infrastructure. Since 1996,
thousands of companies have entrusted Internap with the protection and delivery
of their online applications. Transform your IT Infrastructure into a competitive
advantage with IT IQ from Internap. For more information, visit
internap.com, our blog at internap.com or follow us on
Twitter at twitter.com.
Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking
statements include statements related to our expectations regarding the expansion
of our company-controlled data centers and the timing for bringing new space
online. Because such statements are not guarantees of future performance and
involve risks and uncertainties, there are important factors that could cause
Internap's actual results to differ materially from those in the forward-looking
statements. These factors include our ability to achieve or sustain
profitability; our ability to expand margins and drive higher returns on
investment; our ability to successfully integrate Voxel into our business; our
ability to complete expansion of company-controlled data centers within the
expected timeframe; our ability to sell into new data center space; the actual
performance of our IT Infrastructure services; our ability to maintain current
customers and obtain new ones, whether in a cost-effective manner or at all; our
ability to correctly forecast capital needs, demand planning and space
utilization; our ability to respond successfully to technological change and the
resulting competition; the availability of services from Internet network service
providers or network service providers providing network access loops and local
loops on favorable terms, or at all; failure of third party suppliers to deliver
their products and services on favorable terms, or at all; failures in our
network operations centers, data centers, network access points or computer
systems; our ability to provide or improve Internet infrastructure services to
our customers; and our ability to protect our intellectual property, as well as
other factors discussed in our filings with the Securities and Exchange
Commission. Given these risks and uncertainties, investors should not place undue
reliance on forward-looking statements as a prediction of actual results. We
undertake no obligation to update, amend or clarify any forward-looking statement
for any reason.
Press Contact:Investor Contact:
Mariah TorpeyMichael Nelson
(781) 418-2404(404) 302-9700
internap@daviesmurphy.com ir@internap.com
INTERNAP NETWORK SERVICES CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(In thousands, except per share amounts)
Three Months Ended September 30,
20122011
Revenues:
Data center services$ 42,139$ 34,114
Internet protocol (IP) services25,99027,900
Total revenues68,12962,014
Operating costs and expenses:
Direct costs of network, sales and services, exclusive of
depreciation and amortization, shown below:
Data center services23,53920,480
IP services10,03410,307
Direct costs of customer support6,8985,407
Direct costs of amortization of acquired technologies1,179875
Sales and marketing7,5697,314
General and administrative8,9858,333
Depreciation and amortization9,8859,647
Gain on disposal of property and equipment, net-(47)
Restructuring and impairments124123
Total operating costs and expenses68,21362,439
Loss from operations(84)(425)
Non-operating expenses:
Interest expense1,9961,166
Other, net11820
Total non-operating expenses2,1141,186
Loss before income taxes and equity in (earnings) of
equity method investment(2,198)(1,611)
Provision for income taxes289275
Equity in (earnings) of equity-method investment, net of taxes (37)(98)
Net loss(2,450)(1,788)
Other comprehensive income:
Foreign currency translation adjustment, net of taxes22112
Comprehensive loss$ (2,229)$ (1,776)
Basic and diluted net loss per share$(0.05)$(0.04)
Weighted average shares outstanding used in computing
basic and diluted net loss per share50,57250,217
INTERNAP NETWORK SERVICES CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
September 30,December 31,
20122011
ASSETS
Current assets:
Cash and cash equivalents$26,375$29,772
Accounts receivable, net of allowance for doubtful accounts of $1,963 and $1,668, respectively21,00218,539
Prepaid expenses and other assets13,20413,270
Total current assets60,58161,581
Property and equipment, net247,305198,369
Investment in joint venture3,1372,936
Intangible assets, net22,72826,886
Goodwill59,60559,471
Deposits and other assets5,6535,371
Deferred tax asset, net1,8212,096
Total assets$400,830$356,710
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$26,285$21,746
Accrued liabilities9,9079,152
Deferred revenues2,8012,475
Revolving credit facility-100
Capital lease obligations4,2942,154
Term loan, less discount of $240 and $206, respectively3,4612,794
Restructuring liability2,5672,709
Accrued contingent consideration4,945-
Other current liabilities166151
Total current liabilities54,42641,281
Deferred revenues2,6622,323
Capital lease obligations45,19338,923
Revolving credit facility22,329-
Term loan, less discount of $446 and $367, respectively62,35355,383
Accrued contingent consideration-4,626
Restructuring liability3,5404,884
Deferred rent15,37216,100
Other long-term liabilities9331,020
Total liabilities206,808164,540
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 20,000 shares authorized; no shares issued or outstanding--
Common stock, $0.001 par value; 120,000 shares authorized; 53,436 and 52,528 shares outstanding, respectively 5453
Additional paid-in capital1,242,0031,235,554
Treasury stock, at cost; 248 and 231 shares, respectively(1,717)(1,266)
Accumulated deficit(1,046,211)(1,041,872)
Accumulated items of other comprehensive loss(107)(299)
Total stockholders' equity194,022192,170
Total liabilities and stockholders' equity$400,830$356,710
INTERNAP NETWORK SERVICES CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended September 30,
20122011
Cash Flows from Operating Activities:
Net loss$ (4,339)$ (5,900)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization30,00129,093
Loss on disposal of property and equipment, net-37
Impairment of capitalized software258-
Stock-based compensation expense, net of capitalized amount4,3822,990
Equity in (earnings) from equity-method investment(197)(333)
Provision for doubtful accounts833793
Non-cash changes in capital lease obligations669624
Non-cash change in accrued contingent consideration319-
Non-cash changes in deferred rent(727)(345)
Deferred income taxes292334
Other, net440224
Changes in operating assets and liabilities:
Accounts receivable(3,296)(2,103)
Prepaid expenses, deposits and other assets(297)(1,338)
Accounts payable4,5405,206
Accrued and other liabilities826(1,106)
Deferred revenues664(775)
Restructuring liability(1,486)(364)
Net cash flows provided by operating activities32,88227,037
Cash Flows from Investing Activities:
Purchases of property and equipment(64,614)(50,909)
Net cash flows used in investing activities(64,614)(50,909)
Cash Flows from Financing Activities:
Principal payments on term loan(2,375)(750)
Proceeds from term loan10,000-
Proceeds from revolving credit facility22,229-
Payment of debt issuance costs(543)-
Payments on capital lease obligations(2,296)(903)
Proceeds from exercise of stock options2,2451,062
Tax withholdings related to net share settlements of restricted stock awards(956)(691)
Other, net(90)(100)
Net cash flows provided by (used in) financing activities28,214(1,382)
Effect of exchange rates on cash and cash equivalents121(39)
Net decrease in cash and cash equivalents(3,397)(25,293)
Cash and cash equivalents at beginning of period29,77259,582
Cash and cash equivalents at end of period$ 26,375$ 34,289
INTERNAP NETWORK SERVICES CORPORATION NON-GAAP (ADJUSTED) FINANCIAL MEASURES
In addition to providing financial measurements based on accounting principles
generally accepted in the United States of America ("GAAP"), Internap has
historically provided additional financial measures that are not prepared in
accordance with GAAP ("non-GAAP"), including adjusted EBITDA, normalized net
income (loss), normalized diluted shares outstanding, segment profit and segment
margin. The most directly comparable GAAP equivalent to adjusted EBITDA and
normalized net income (loss) is loss from operations and net loss, respectively.
The most directly comparable GAAP equivalent to normalized diluted shares
outstanding is diluted common shares outstanding.
We define non-GAAP measures as follows:
Adjusted EBITDA is loss from operations plus depreciation and amortization, loss
on disposals of property and equipment, impairments and restructuring and
stock-based compensation.
Adjusted EBITDA margin is adjusted EBITDA as a percentage of revenues.
Normalized net income (loss) is net income (loss) plus impairments and
restructuring and stock-based compensation.
Normalized diluted shares outstanding are diluted shares of common stock
outstanding used in GAAP net loss per share calculations, excluding the dilutive
effect of stock-based compensation using the treasury stock method.
Normalized net income (loss) per share is normalized net income (loss) divided by
basic and normalized diluted shares outstanding.
Segment profit is segment revenues less direct costs of network, sales and
services, exclusive of depreciation and amortization for the segment, as
presented in the notes to our consolidated financial statements. Segment profit
does not include direct costs of customer support, direct costs of amortization
of acquired technologies or any other depreciation or amortization associated
with direct costs.
Segment margin is segment profit as a percentage of segment revenues.
We detail reconciliations of our non-GAAP financial measures to the most directly
comparable financial measure in the reconciliations of GAAP to non-GAAP measures
below. We believe that presentation of these non-GAAP financial measures provides
useful information to investors regarding our results of operations.
We believe that excluding depreciation and amortization and loss on disposals of
property and equipment, as well as impairments and restructuring, to calculate
adjusted EBITDA provides supplemental information and an alternative presentation
that is useful to investors' understanding of Internap's core operating results
and trends. Not only are depreciation and amortization expenses based on
historical costs of assets that may have little bearing on present or future
replacement costs, but also they are based on management estimates of remaining
useful lives. Loss on disposals of property and equipment is also based on
historical costs of assets that may have little bearing on replacement costs.
Impairments and restructuring expenses primarily reflect goodwill impairments and
subsequent plan adjustments in sublease income assumptions for certain properties
included in our previously disclosed restructuring plans.
INTERNAP NETWORK SERVICES CORPORATION NON-GAAP (ADJUSTED) FINANCIAL MEASURES
(Continued)
Internap believes that impairment and restructuring charges are unique costs that
we do not expect to recur on a regular basis, and consequently, we do not
consider these charges as a normal component of expenses related to current and
ongoing operations.
Similarly, we believe that excluding the effects of stock-based compensation from
non-GAAP financial measures provides supplemental information and an alternative
presentation useful to investors' understanding of Internap's core operating
results and trends. Investors have indicated that they consider financial
measures of our results of operations excluding stock-based compensation as
important supplemental information useful to their understanding of our
historical results and estimating our future results.
We also believe that, in excluding the effects of stock-based compensation, our
non-GAAP financial measures provide investors with transparency into what
management uses to measure and forecast our results of operations, to compare on
a consistent basis our results of operations for the current period to that of
prior periods and to compare our results of operations on a more consistent basis
against that of other companies, in making financial and operating decisions and
to establish certain management compensation.
Stock-based compensation is an important part of total compensation, especially
from the perspective of employees. We believe, however, that supplementing GAAP
net loss and net loss per share information by providing normalized net income
(loss) and normalized net income (loss) per share, excluding the effect of
impairments, restructuring and stock-based compensation in all periods, is useful
to investors because it enables additional and more meaningful period-to-period
comparisons. We consider normalized diluted shares to be another important
indicator of our overall performance because it eliminates the effect of non-cash
items.
Adjusted EBITDA is not a measure of liquidity calculated in accordance with GAAP,
and should be viewed as a supplement to -- not a substitute for -- our results of
operations presented on the basis of GAAP. Adjusted EBITDA does not purport to
represent cash flow provided by operating activities as defined by GAAP. Our
statements of cash flows present our cash flow activity in accordance with GAAP.
Furthermore, adjusted EBITDA is not necessarily comparable to similarly-titled
measures reported by other companies.
We believe adjusted EBITDA is used by and is useful to investors and other users
of our financial statements in evaluating our operating performance because it
provides them with an additional tool to compare business performance across
companies and across periods. We believe that:
EBITDA is widely used by investors to measure a company's operating performance
without regard to items such as interest expense, income taxes, depreciation and
amortization, which can vary substantially from company-to-company depending upon
accounting methods and book value of assets, capital structure and the method by
which assets were acquired; and
investors commonly adjust EBITDA information to eliminate the effect of disposals
of property and equipment, impairments, restructuring and stock-based
compensation which vary widely from company-to-company and impair comparability.
INTERNAP NETWORK SERVICES CORPORATION NON-GAAP (ADJUSTED) FINANCIAL MEASURES
(Continued)
Our management uses adjusted EBITDA:
as a measure of operating performance to assist in comparing performance from
period-to-period on a consistent basis;
as a measure for planning and forecasting overall expectations and for evaluating
actual results against such expectations; and
in communications with the board of directors, analysts and investors concerning
our financial performance.
Our presentation of segment profit and segment margin excludes direct costs of
customer support, depreciation and amortization in order to allow investors to
see the business through the eyes of management. Management views direct costs of
network, sales and services as generally less controllable, external costs and
management regularly monitors the margin of revenues in excess of these direct
costs. Similarly, we view the costs of customer support to also be an important
component of costs of revenues but believe that the costs of customer support to
be more within our control and to some degree discretionary as we can adjust
those costs by hiring and terminating employees.
Segment margin is an important metric to our investors and analysts, as we have
regularly discussed and disclosed the effects of third party vendors' pricing
declines and the corresponding effect on our revenues. The presentation of
segment margin highlights the impact of the pricing declines and allows investors
and analysts to evaluate our revenue generation performance relative to direct
costs of network, sales and services. Conversely, we have much greater latitude
in controlling the compensation component of costs of revenues, represented by
customer support, and we analyze this component separately from the direct
external costs.
We also have excluded depreciation and amortization from segment profit and
segment margin because, as noted above, they are based on estimated useful lives
of tangible and intangible assets. Further, depreciation and amortization are
based on historical costs incurred to build out our deployed network and the
historical costs of these assets may not be indicative of current or future
capital expenditures.
Although we believe, for the foregoing reasons, that our presentation of non-GAAP
financial measures provides useful supplemental information to investors
regarding our results of operations, our non-GAAP financial measures should only
be considered in addition to, and not as a substitute for, or superior to, any
measure of financial performance prepared in accordance with GAAP.
Use of non-GAAP financial measures is subject to inherent limitations because
they do not include all the expenses that must be included under GAAP and because
they involve the exercise of judgment of which charges should properly be
excluded from the non-GAAP financial measure. Management accounts for these
limitations by not relying exclusively on non-GAAP financial measures, but only
using such information to supplement GAAP financial measures. Our non-GAAP
financial measures may not be the same non-GAAP measures, and may not be
calculated in the same manner, as those used by other companies.
INTERNAP NETWORK SERVICES CORPORATION RECONCILIATION OF LOSS FROM OPERATIONS TO
ADJUSTED EBITDA
A reconciliation of loss from operations, the most directly comparable GAAP
measure, to adjusted EBITDA for each of the periods indicated is as follows (in
thousands):
Three Months Ended
September 30, 2012June 30, 2012September 30, 2011
(Loss) income from operations (GAAP)$(84)$91$(425)
Stock-based compensation1,3631,6151,090
Depreciation and amortization, including amortization of acquired technologies 11,0649,84310,522
Gain on disposal of property and equipment, net-(4)(47)
Restructuring and impairments124645123
Adjusted EBITDA (non-GAAP)$12,467$12,190$11,263
INTERNAP NETWORK SERVICES CORPORATION RECONCILIATION OF NET (LOSS) INCOME AND
BASIC AND DILUTED NET (LOSS) INCOME PER SHARE TO NORMALIZED NET (LOSS) INCOME AND
BASIC AND DILUTED NORMALIZED NET (LOSS) INCOME PER SHARE
Reconciliations of (1) net loss, the most directly comparable GAAP measure, to
normalized net income (loss), (2) diluted shares outstanding used in per share
calculations, the most directly comparable GAAP measure, to normalized diluted
shares used in normalized per share outstanding calculations and (3) net loss per
share, the most directly comparable GAAP measure, to normalized net income (loss)
per share for each of the periods indicated is as follows (in thousands, except
per share data):
Three Months Ended
September 30, 2012June 30, 2012September 30, 2011
Net loss (GAAP)$(2,450)$(1,997)$(1,788)
Restructuring and impairments124645123
Stock-based compensation1,3631,6151,090
Normalized net (loss) income (non-GAAP)(963)263(575)
Normalized net loss allocable to participating securities (non-GAAP)-(6)-
Normalized net (loss) income available to common stockholders (non-GAAP)$(963)$257$(575)
Weighted average shares outstanding used in per share calculation:
Basic (GAAP)50,57250,45350,217
Participating securities (GAAP)1,1171,1281,074
Diluted (GAAP)50,57250,45350,217
Add potentially dilutive securities-709-
Less dilutive effect of stock-based compensation under the treasury stock method -(251)-
Normalized diluted shares (non-GAAP)50,57250,91150,217
Loss per share (GAAP):
Basic and diluted$(0.05)$(0.04)$(0.04)
Normalized net (loss) income per share (non-GAAP):
Basic and diluted$(0.02)$0.01$(0.01)
INTERNAP NETWORK SERVICES CORPORATION SEGMENT PROFIT AND SEGMENT MARGIN
Segment profit and segment margin, which does not include direct costs of
customer support, direct costs of amortization of acquired technologies or any
other depreciation or amortization, for each of the periods indicated is as
follows (dollars in thousands):
Three Months Ended
September 30, 2012June 30, 2012September 30, 2011
Revenues:
Data center services$42,139$41,493$34,114
IP services25,99027,19427,900
Total68,12968,68762,014
Direct cost of network, sales and services, exclusive of depreciation and amortization:
Data center services23,53922,64920,480
IP services10,0349,99210,307
Total33,57332,64130,787
Segment Profit:
Data center services18,60018,84413,634
IP services15,95617,20217,593
Total$34,556$36,046$31,227
Segment Margin:
Data center services44.1%45.4%40.0%
IP services61.4%63.3%63.1%
Total50.7%52.5%50.4% |
