Exhibit 99.1
Equinix Reports First Quarter 2005 Results
FOSTER CITY, Calif.--(BUSINESS WIRE)--April 27, 2005--Equinix,
Inc. (Nasdaq:EQIX):
-- Increased revenues by 32% over same quarter 2004
-- Increased EBITDA to $14.3 million, up from $5.7 million in
same quarter 2004
-- Added 75 new customers to bring our customer count total to
over 1,000
-- Opened new Silicon Valley IBX with large customer deployments
Equinix, Inc. (Nasdaq:EQIX), the leading provider of
network-neutral data centers and Internet exchange services, today
reported its quarterly results for the period ended March 31, 2005.
Revenues were $48.7 million for the first quarter representing a
32% increase over the same quarter last year and an 8% increase over
the previous quarter. Recurring revenues, consisting of colocation,
interconnection and managed services, were $45.9 million, a 33%
increase over the same quarter last year and an 8% increase over the
previous quarter. Non-recurring revenues, consisting primarily of
professional services and installation fees, were $2.8 million for the
quarter, as compared to $2.3 million in the same quarter last year and
$2.4 million the previous quarter.
Cost of revenues were $36.9 million for the first quarter, a 9%
increase over the same quarter last year and a 6% increase over the
previous quarter. Cost of revenues, excluding depreciation,
amortization, accretion and stock-based compensation of $15.0 million,
were $21.9 million for the first quarter, an 8% increase over same
quarter last year and a 5% increase over the previous quarter. Cash
gross margins, defined as gross profit less depreciation,
amortization, accretion and stock-based compensation, divided by
revenues, for the quarter were 55%, up from 45% the same quarter last
year and 53% the previous quarter.
Selling, general and administrative expenses were $15.3 million
for the first quarter, a 19% increase over the same quarter last year
and a 17% increase over the previous quarter. Selling, general and
administrative expenses, excluding depreciation, amortization and
stock-based compensation of $2.9 million, were $12.4 million for the
first quarter, a 13% increase over same quarter last year and a 6%
increase over the previous quarter.
Net loss for the first quarter was $5.8 million, or a basic and
diluted net loss per share of $0.26. The Company's cash net income,
defined as net income (loss) less depreciation, amortization,
accretion, stock-based compensation expense, restructuring charges and
non-cash interest expense, for the quarter was $12.9 million, a 9%
improvement over the previous quarter.
EBITDA, defined as loss from operations less depreciation,
amortization, accretion, stock-based compensation expense and
restructuring charges, for the first quarter was $14.3 million, up 16%
over the previous quarter and up from $5.7 million the same quarter
2004.
Capital expenditures in the quarter were $5.5 million, of which
$2.2 million was attributed to ongoing capital expenditures and $3.3
million was attributed to expansion capital expenditures.
The company generated cash from operating activities of $15.4
million, a $4.8 million or 45% increase over the previous quarter.
Cash used in investing activities was $6.2 million, an increase of
$1.7 million over the previous quarter. As a result, the company
generated $9.2 million in free cash flow, a $3.1 million increase over
the previous quarter. Free cash flow is defined as net cash generated
from operating activities less net cash used in investing activities
(excluding the purchase, sale and maturities of short-term and
long-term investments).
As of March 31, 2005, the company's cash, cash equivalents and
investments were $118.1 million, an increase of $10.0 million over the
previous quarter.
"First quarter was a strong start to 2005. Particularly pleasing
was the incremental recurring revenue growth achieved, which was the
best we've seen to date," said Peter Van Camp, CEO of Equinix. "Great
anchor bookings in our new Washington, D.C. and Silicon Valley IBX
centers contributed to our momentum."
Other Company Metrics & Developments
-- On a same IBX basis (defined as IBX centers which have been
available for customer installs for at least four full
quarters), revenue was $48.5 million; cost of revenues were
$35.3 million; cost of revenues, excluding depreciation,
amortization, accretion and stock-based compensation were
$21.1 million and cash gross margins for the quarter were 56%.
EBITDA on a same IBX basis was $14.9 million.
-- Equinix added 75 new customers in the quarter including Con
Edison, Gamania Digital Entertainment Co. Ltd, Neighborcare,
New York Magazine, Taiwan Business Bank, TC Group, L.L.C,
Telekom Malaysia (Hong Kong) Ltd and XM Satellite Radio and
ended the quarter with 1,005 customers. The company received
additional orders in the quarter from 47% of its existing U.S.
customers.
-- Based on a total cabinet capacity of 26,100, the number of
cabinets billing at the end of the quarter was approximately
11,700, or 45%, up from approximately 11,100 the previous
quarter, and includes the new Silicon Valley IBX, which opened
in March 2005. On a weighted average basis, the number of
cabinets billing was 11,400, which also represents 45%.
-- U.S. interconnection service revenues remained steady at 23%
of U.S. recurring revenues for the quarter. Interconnection
services represent 20% of total worldwide recurring revenues.
Business Outlook
For the second quarter 2005, the company expects revenue to be in
the range of $51.5 to $52.5 million. Cash gross margins are expected
to be in the range of 52 - 53%. Cash selling, general and
administrative expenses are expected to be in the range of $12.5 to
$13.5 million. EBITDA is expected to be between $14.0 and $15.0
million, as the company continues to invest in growing the business.
Capital expenditures are estimated to be in the range of $9.0 to $10.0
million, including capital required for improvements to the newly
acquired Silicon Valley and Washington, D.C. area IBX centers.
For the full year of 2005, revenues are expected to be in the
range of $209.0 to $215.0 million. Cash gross margins are expected to
be in the range of 53 - 56%. Cash selling, general and administrative
expenses are expected to be in the range of $51.0 to $53.0 million.
EBITDA is expected to be between $61.0 and $65.0 million. Capital
expenditures for 2005 are expected to be in a range of $23.0 to $27.0
million, comprised of $13.0 to $15.0 million of ongoing capital
expenditures and approximately $10.0 to $12.0 million of expansion
capital expenditures.
The company will discuss its results and guidance on its quarterly
conference call on Wednesday, April 27, 2005, at 5:30 p.m. ET (2:30
p.m. PT). To hear the conference call, please dial 1-773-799-3263
(domestic and international) and reference the passcode (EQIX). A
simultaneous live Webcast of the call will be available over the
Internet at www.equinix.com, under the Investor Relations heading. A
replay of the call will be available beginning on Wednesday, April 27,
2005 at 7:30 p.m. (ET) by dialing 1-402-280-1626. In addition, the
Webcast will be available for replay on the company's Web site at
www.equinix.com. No password is required for either method of replay.
A reconciliation between GAAP information and non-GAAP information
contained in this press release is provided in a table immediately
following the Condensed Consolidated Statements of Operations - GAAP
Presentation. This reconciliation is also available at www.equinix.com
under the Investor Relations heading.
About Equinix
Equinix is the leading global provider of network-neutral data
centers and Internet exchange services for enterprises, content
companies, systems integrators and network services providers. Through
the company's 15 Internet Business Exchange(TM) (IBX(R)) centers in
five countries, customers can directly interconnect with every major
global network and ISP for their critical peering, transit and traffic
exchange requirements. These interconnection points facilitate the
highest performance and growth of the Internet by serving as neutral
and open marketplaces for Internet infrastructure services, allowing
customers to expand their businesses while reducing costs.
This press release contains forward-looking statements that
involve risks and uncertainties. Actual results may differ materially
from expectations discussed in such forward-looking statements.
Factors that might cause such differences include, but are not limited
to, the challenges of operating IBX centers and developing, deploying
and delivering Equinix services; a failure to receive significant
revenue from customers in recently-acquired data centers; competition
from existing and new competitors; the ability to generate sufficient
cash flow or otherwise obtain funds to repay outstanding indebtedness;
the loss or decline in business from our key customers and other risks
described from time to time in Equinix's filings with the Securities
and Exchange Commission. In particular, see Equinix's recent quarterly
and annual reports filed with the Securities and Exchange Commission,
copies of which are available upon request from Equinix. Equinix does
not assume any obligation to update the forward-looking information
contained in this press release.
Equinix and IBX are registered trademarks of Equinix, Inc.
Internet Business Exchange is a trademark of Equinix, Inc.
Non-GAAP Financial Measures
Equinix 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, Equinix uses non-GAAP financial measures, such as EBITDA,
cash cost of revenues, cash gross margins, cash operating expenses
(also known as cash selling, general and administrative expenses or
cash SG&A), cash interest expense and cash net income (loss) and free
cash flow to evaluate its operations. In presenting these non-GAAP
financial measures, Equinix excludes certain non-cash or non-recurring
items that it believes are not good indicators of the company's
current or future operating performance. These non-cash or
non-recurring items are depreciation, amortization, accretion,
stock-based compensation, non-cash interest, and, with respect to 2004
results, the non-cash portion of loss on debt extinguishment and
conversion and restructuring charges (there were no such charges or
losses in 2005). Recent legislative and regulatory changes encourage
use of and emphasis on GAAP financial metrics and require companies to
explain why non-GAAP financial metrics are relevant to management and
investors. Equinix excludes these non-cash or non-recurring items in
order for Equinix's lenders, investors, and industry analysts who
review and report on the company, to better evaluate the company's
operating performance and cash spending levels relative to its
industry sector and competitor base.
Equinix excludes depreciation expense as these charges primarily
relate to the initial construction costs of our IBX centers and do not
reflect our current or future cash spending levels to support our
business. Our IBX centers are long-lived assets, and have an economic
life greater than ten years. The construction costs of our IBX centers
do not recur and future capital expenditures remain minor relative to
our initial investment. This is a trend we expect to continue. In
addition, depreciation is also based on the estimated useful lives of
our IBX centers. These estimates could vary from actual performance of
the asset, are based on historic costs incurred to build out our IBX
centers, and are not indicative of current or expected future capital
expenditures. Therefore, Equinix excludes depreciation from its
operating results when evaluating its operations.
In addition, in presenting the non-GAAP financial measures,
Equinix excludes amortization expense related to certain intangible
assets, as it represents a non-cash cost that may not recur and is not
a good indicator of the company's current or future operating
performance. Equinix excludes accretion expense, both as it relates to
its asset retirement obligations as well as its accrued restructuring
charge liability, as these expenses represent costs, which Equinix
believes are not meaningful in evaluating the Company's current
operations. Equinix excludes non-cash stock-based compensation expense
as it represents expense attributed to stock awards that have no
current or future cash obligations. As such, we, and our investors and
analysts, exclude this stock-based compensation expense when assessing
the cash generating performance of our operations. Equinix excludes
interest expense associated with the amortization of debt issuance
costs and discounts, as well as the interest expense associated with
its convertible secured notes as such interest expenses do not require
any cash in the periods presented nor will they in future periods.
Lastly, with respect to its 2004 results, Equinix excludes
restructuring charges and the non-cash portion of the loss on debt
extinguishment and conversion. The restructuring charges relate to the
company's decision to exit leases for excess space adjacent to several
of our IBX centers, which we do not intend to build out now or in the
future. The non-cash portion of the loss on debt extinguishment and
conversion, which represents the write-off of the unamortized debt
issuance costs and discounts associated with the debt facilities
extinguished or converted as no cash was expended in the periods
presented for such write-offs nor will there be in the future.
Management believes such restructuring charges and write-offs of debt
issuance costs and discounts were unique costs that are not expected
to recur, and consequently, does not consider these charges as a
normal component of expenses related to current and ongoing
operations.
Our management does not itself, nor does it suggest that investors
should, consider such non-GAAP financial measures in isolation from,
or as a substitute for, financial information prepared in accordance
with GAAP. However, we have presented such non-GAAP financial measures
to provide investors with an additional tool to evaluate our operating
results in a manner that focuses on what management believes to be our
ongoing business operations. Management believes that the inclusion of
these non-GAAP financial measures provide consistency and
comparability with past reports and provide a better understanding of
the overall performance of the business and its ability to perform in
subsequent periods. Equinix believes that if it did not provide such
non-GAAP financial information, investors would not have all the
necessary data to analyze Equinix effectively.
Investors should note, however, that the non-GAAP financial
measures used by Equinix may not be the same non-GAAP financial
measures, and may not be calculated in the same manner, as that of
other companies. In addition, whenever Equinix uses such non-GAAP
financial measures, it provides a reconciliation of non-GAAP financial
measures to the most closely applicable GAAP financial measure.
Investors are encouraged to review the related GAAP financial measures
and the reconciliation of these non-GAAP financial measures to their
most directly comparable GAAP financial measure.
Equinix intends to calculate the various non-GAAP financial
measures in future periods consistent with how it was calculated for
the three months ended March 31, 2005 and 2004, presented within this
press release.
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP PRESENTATION
(in thousands, except per share detail)
Three Months Ended
---------------------------------
March 31, Dec. 31, March 31,
2005 2004 2004
----------- ---------- ----------
(unaudited)
Recurring revenues $45,892 $42,638 $34,483
Non-recurring revenues 2,792 2,351 2,337
----------- ---------- ----------
Revenues 48,684 44,989 36,820
Cost of revenues 36,873 34,705 33,785
----------- ---------- ----------
Gross profit 11,811 10,284 3,035
----------- ---------- ----------
Operating expenses:
Sales and marketing 4,819 5,106 4,642
General and administrative 10,489 7,950 8,242
Restructuring charges - 17,685 -
----------- ---------- ----------
Total operating expenses 15,308 30,741 12,884
----------- ---------- ----------
Loss from operations (3,497) (20,457) (9,849)
----------- ---------- ----------
Interest and other income (expense):
Interest income 667 472 242
Interest expense and other (2,459) (2,731) (4,130)
Loss on debt extinguishment and
conversion - - (16,211)
----------- ---------- ----------
Total interest and other, net (1,792) (2,259) (20,099)
----------- ---------- ----------
Net loss before income taxes (5,289) (22,716) (29,948)
Income taxes (505) 47 (194)
----------- ---------- ----------
Net loss $(5,794) $(22,669) $(30,142)
=========== ========== ==========
Basic and diluted net loss per share $(0.26) $(1.21) $(2.00)
=========== ========== ==========
Shares used in computing basic and
diluted net loss per share 21,898 18,766 15,104
=========== ========== ==========
Pro forma basic and diluted net loss
per share (1) $(0.26) $(0.27) $(0.92)
=========== ========== ==========
Shares used in computing pro forma
basic and diluted net loss per share 21,898 18,766 15,104
=========== ========== ==========
- -------------------------------------
(1) Pro forma basic and diluted net loss per share excludes the
$17,685,000 restructuring charge during the three months ended
December 31, 2004 and the $16,211,000 loss on debt extinguishment
and conversion during the three months ended March 31, 2004.
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP
PRESENTATION
(in thousands)
Three Months Ended
---------------------------------
March 31, Dec. 31, March 31,
2005 2004 2004
----------- ---------- ----------
(unaudited)
Recurring revenues $45,892 $42,638 $34,483
Non-recurring revenues 2,792 2,351 2,337
----------- ---------- ----------
Revenues (1) 48,684 44,989 36,820
Cash cost of revenues (2) 21,929 20,928 20,220
----------- ---------- ----------
Cash gross profit (3) 26,755 24,061 16,600
----------- ---------- ----------
Cash operating expenses (4):
Cash sales and marketing
expenses(5) 4,357 4,613 4,138
Cash general and administrative
expenses (6) 8,061 7,085 6,805
----------- ---------- ----------
Total cash operating
expenses (7) 12,418 11,698 10,943
----------- ---------- ----------
EBITDA (8) 14,337 12,363 5,657
----------- ---------- ----------
Cash interest and other income
(expense) (9):
Interest income 667 472 242
Cash interest expense and other
(10) (1,554) (972) (1,515)
Cash loss on debt extinguishment
and conversion (11) - - (2,505)
Income taxes (505) 47 (194)
----------- ---------- ----------
Total cash interest and other,
net (1,392) (453) (3,972)
----------- ---------- ----------
Cash net income (12) $12,945 $11,910 $1,685
=========== ========== ==========
Cash gross margins (13) 55% 53% 45%
=========== ========== ==========
EBITDA flow-through rate (14) 53% 90% 70%
=========== ========== ==========
- -------------------------------------
(1) The geographic split of our revenues is presented below:
U.S. revenues $42,016 $38,705 $32,021
Asia-Pacific revenues 6,668 6,284 4,799
----------- ---------- ----------
Revenues $48,684 $44,989 $36,820
=========== ========== ==========
Revenues on a services basis is
presented below:
Colocation $33,235 $30,814 $24,806
Interconnection 9,315 8,901 6,937
Managed infrastructure 3,342 2,923 2,740
----------- ---------- ----------
Recurring revenues 45,892 42,638 34,483
Non-recurring revenues 2,792 2,351 2,337
----------- ---------- ----------
Revenues $48,684 $44,989 $36,820
=========== ========== ==========
New IBX centers are IBX centers which have not been available for
customer installs for at least four full quarters. Revenues on a
same IBX versus new IBX basis is presented below:
Same IBX centers $48,457 $43,165 $35,737
New IBX centers 227 1,824 1,083
----------- ---------- ----------
Revenues $48,684 $44,989 $36,820
=========== ========== ==========
(2) We define cash cost of revenues as cost of revenues less
depreciation, amortization, accretion and stock-based compensation
as presented below:
Cost of revenues $36,873 $34,705 $33,785
Depreciation, amortization and
accretion expense (14,944) (13,777) (13,545)
Stock-based compensation expense - - (20)
----------- ---------- ----------
Cash cost of revenues $21,929 $20,928 $20,220
=========== ========== ==========
The geographic split of our cash cost of revenues is presented
below:
U.S. cash cost of revenues $18,061 $16,962 $16,731
Asia-Pacific cash cost of
revenues 3,868 3,966 3,489
----------- ---------- ----------
Cash cost of revenues $21,929 $20,928 $20,220
=========== ========== ==========
New IBX centers are IBX centers which have not been available for
customer installs for at least four full quarters. Cost of
revenues and cash cost of revenues on a same IBX versus new IBX
basis is presented below:
Same IBX centers-cash cost of
revenues $21,091 $18,703 $18,376
Same IBX centers-depreciation,
amortization and accretion
expense 14,196 13,312 13,324
Same IBX centers-stock-based
compensation expense - - 20
----------- ---------- ----------
Same IBX centers cost of
revenues 35,287 32,015 31,720
----------- ---------- ----------
New IBX centers-cash cost of
revenues 838 2,225 1,844
New IBX centers-depreciation,
amortization and accretion
expense 748 465 221
New IBX centers-stock-based
compensation expense - - -
----------- ---------- ----------
New IBX centers cost of
revenues 1,586 2,690 2,065
----------- ---------- ----------
Cost of revenues $36,873 $34,705 $33,785
=========== ========== ==========
(3) We define cash gross profit as revenues less cash cost of revenues
(as defined above).
(4) We define cash operating expenses as operating expenses less
depreciation, amortization and stock-based compensation. We also
refer to cash operating expenses as cash selling, general and
administrative expenses or "cash SG&A".
(5) We define cash sales and marketing expenses as sales and marketing
expenses less depreciation, amortization and stock-based
compensation as presented below:
Sales and marketing expenses $4,819 $5,106 $4,642
Depreciation and amortization
expense (15) (484) (474)
Stock-based compensation expense (447) (9) (30)
----------- ---------- ----------
Cash sales and marketing
expenses $4,357 $4,613 $4,138
=========== ========== ==========
(6) We define cash general and administrative expenses as general and
administrative expenses less depreciation, amortization and
stock-based compensation as presented below:
General and administrative
expenses $10,489 $7,950 $8,242
Depreciation and amortization
expense (431) (426) (810)
Stock-based compensation expense (1,997) (439) (627)
----------- ---------- ----------
Cash general and administrative
expenses $8,061 $7,085 $6,805
=========== ========== ==========
(7) Our cash operating expenses, or cash SG&A, as defined above, is
presented below:
Cash sales and marketing expenses $4,357 $4,613 $4,138
Cash general and administrative
expenses 8,061 7,085 6,805
----------- ---------- ----------
$12,418 $11,698 $10,943
=========== ========== ==========
The geographic split of our cash operating expenses, or cash SG&A,
is presented below:
U.S. cash SG&A $9,908 $9,408 $8,620
Asia-Pacific cash SG&A 2,510 2,290 2,323
----------- ---------- ----------
Cash SG&A $12,418 $11,698 $10,943
=========== ========== ==========
(8) We define EBITDA as loss from operations less depreciation,
amortization, accretion, stock-based compensation expense and
restructuring charges as presented below:
Loss from operations $(3,497) $(20,457) $(9,849)
Depreciation, amortization and
accretion expense 15,390 14,687 14,829
Stock-based compensation expense 2,444 448 677
Restructuring charges - 17,685 -
----------- ---------- ----------
EBITDA $14,337 $12,363 $5,657
=========== ========== ==========
The geographic split of our
EBITDA is presented below:
U.S. loss from operations $(2,614) $(18,877) $(7,402)
U.S. depreciation, amortization
and accretion expense 14,217 13,079 13,395
U.S. stock-based compensation
expense 2,444 448 677
U.S. restructuring charges - 17,685 -
----------- ---------- ----------
U.S. EBITDA 14,047 12,335 6,670
----------- ---------- ----------
Asia-Pacific loss from operations (883) (1,580) (2,447)
Asia-Pacific depreciation,
amortization and accretion
expense 1,173 1,608 1,434
Asia-Pacific stock-based
compensation expense - - -
Asia-Pacific restructuring
charges - - -
----------- ---------- ----------
Asia-Pacific EBITDA 290 28 (1,013)
----------- ---------- ----------
EBITDA $14,337 $12,363 $5,657
=========== ========== ==========
New IBX centers are IBX centers which have not been available for
customer installs for at least four full quarters. EBITDA on a
same IBX versus new IBX basis is presented below:
Same IBX centers-loss from
operations $(2,138) $(19,591) $(8,867)
Same IBX centers-depreciation,
amortization and accretion
expense 14,642 14,222 14,608
Same IBX centers-stock-based
compensation expense 2,444 448 677
Same IBX centers-restructuring
charges - 17,685 -
----------- ---------- ----------
Same IBX center EBITDA 14,948 12,764 6,418
----------- ---------- ----------
New IBX centers-loss from
operations (1,359) (866) (982)
New IBX centers-depreciation,
amortization and accretion
expense 748 465 221
New IBX centers-stock-based
compensation expense - - -
New IBX centers-restructuring
charges - - -
----------- ---------- ----------
New IBX center EBITDA (611) (401) (761)
----------- ---------- ----------
EBITDA $14,337 $12,363 $5,657
=========== ========== ==========
(9) We define cash interest and other income (expense) as interest
expense plus income taxes less interest income, non-cash interest
expense and non-cash loss on debt extinguishment and conversion.
Non-cash interest expense is comprised of amortization of debt
discounts and debt issuance costs and non-cash interest on our
convertible secured notes. Non-cash loss on debt extinguishment
and conversion is comprised of the non-cash write-off of debt
issuance costs and discounts.
(10) Cash interest expense and other is defined as interest expense
less amortization of debt discounts and debt issuance costs and
non-cash interest on our convertible secured notes as presented
below:
Interest expense and other $(2,459) $(2,731) $(4,130)
Amortization of debt discounts
and debt issuance costs 198 442 1,309
Non-cash interest on convertible
secured notes 707 1,317 1,306
----------- ---------- ----------
Non-cash interest expense 905 1,759 2,615
----------- ---------- ----------
Cash interest expense and other $(1,554) $(972) $(1,515)
=========== ========== ==========
(11) Loss on debt extinguishment and
conversion $- $- $(16,211)
Non-cash write-off of debt
issuance costs and discounts - - 13,706
----------- ---------- ----------
Non-cash loss on debt
extinguishment and conversion - - 13,706
----------- ---------- ----------
Cash loss on debt
extinguishment and conversion $- $- $(2,505)
=========== ========== ==========
(12) We define cash net income as net income (loss) less depreciation,
amortization, accretion, stock-based compensation expense,
restructuring charges, non-cash interest expense and non-cash loss
on debt extinguishment and conversion as presented below:
Net income (loss) $(5,794) $(22,669) $(30,142)
Depreciation, amortization and
accretion expense 15,390 14,687 14,829
Stock-based compensation expense 2,444 448 677
Restructuring charges - 17,685 -
Non-cash interest expense
(defined above) 905 1,759 2,615
Non-cash loss on debt
extinguishment and conversion
(defined above) - - 13,706
----------- ---------- ----------
Cash net income $12,945 $11,910 $1,685
=========== ========== ==========
(13) We define cash gross margins as cash gross profit divided by
revenues.
Our cash gross margins by geographic region is presented below:
U.S. cash gross margins 57% 56% 48%
=========== ========== ==========
Asia-Pacific cash gross margins 42% 37% 27%
=========== ========== ==========
Same IBX centers are IBX centers which have been available for
customer installs for at least four full quarters. Our cash gross
margins for same IBX centers is presented below:
Same IBX cash gross margins 56% 57% 49%
=========== ========== ==========
(14) We define EBITDA flow-through rate as incremental EBITDA growth
divided by incremental revenue growth as follows:
EBITDA - current period $14,337 $12,363 $5,657
Less EBITDA - prior period (12,363) (10,066) (3,103)
----------- ---------- ----------
EBITDA growth $1,974 $2,297 $2,554
=========== ========== ==========
Revenues - current period $48,684 $44,989 $36,820
Less revenues - prior period (44,989) (42,439) (33,154)
----------- ---------- ----------
Revenue growth $3,695 $2,550 $3,666
=========== ========== ==========
EBITDA flow-through rate 53% 90% 70%
=========== ========== ==========
EQUINIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Assets March 31, Dec. 31,
2005 2004
----------- ----------
(unaudited)
Cash, cash equivalents and investments $118,136 $108,092
Accounts receivable, net 14,241 11,919
Property and equipment, net 350,986 343,361
Goodwill and other intangible assets, net 22,062 22,253
Debt issuance costs, net 2,659 3,164
Prepaid expenses 3,351 3,603
Deposits 3,453 6,062
Other assets 3,158 3,344
----------- ----------
Total assets $518,046 $501,798
=========== ==========
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $18,205 $18,116
Accrued restructuring charges 14,492 14,750
Accrued property and equipment 2,269 2,912
Accrued interest payable 382 1,706
Debt facility and capital lease obligation 50,695 35,204
Convertible secured notes 1,803 35,824
Convertible subordinated debentures 86,250 86,250
Deferred rent 23,478 22,915
Deferred installation revenue 6,351 3,745
Customer deposits 945 3,360
Other liabilities 3,826 3,310
----------- ----------
Total liabilities 208,696 228,092
----------- ----------
Preferred stock 2 2
Common stock 24 19
Additional paid-in capital 829,302 776,123
Deferred stock-based compensation (11,449) (260)
Accumulated other comprehensive income 1,700 2,257
Accumulated deficit (510,229) (504,435)
----------- ----------
Total stockholders' equity 309,350 273,706
----------- ----------
Total liabilities and stockholders' equity $518,046 $501,798
=========== ==========
- -----------------------------------------------------------
Ending headcount by geographic region is as follows:
U.S. headcount 332 315
Asia-pacific headcount 153 153
----------- ----------
Total headcount 485 468
=========== ==========
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (1)
(in thousands)
Three Months Ended
----------------------
March 31, March 31,
2005 2004
----------- ----------
(unaudited)
Cash flows from operating activities:
Net loss $(5,794) $(30,142)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation, amortization and accretion 15,390 14,829
Amortization of stock-based compensation 2,444 677
Non-cash interest expense 905 2,615
Loss on debt extinguishment and conversion - 16,211
Other reconciling items 508 1,711
Changes in operating assets and liabilities:
Accounts receivable (2,264) 29
Accounts payable and accrued expenses 89 190
Accrued restructuring charges (482) (458)
Accrued interest payable (539) (36)
Other assets and liabilities 5,136 855
----------- ----------
Net cash provided by operating
activities 15,393 6,481
----------- ----------
Cash flows from investing activities:
Purchases of property and equipment (5,523) (4,908)
Accrued property and equipment (643) (196)
----------- ----------
Net cash used in investing activities (6,166) (5,104)
----------- ----------
Cash flows from financing activities:
Proceeds from warrants, stock options and
employee stock purchase plans 4,347 2,060
Proceeds from convertible subordinated
debentures - 86,250
Repayment of debt facilities and capital lease
obligations (3,222) (3,527)
Repayment of credit facility - (34,281)
Repayment of senior notes - (30,475)
Debt issuance and extinguishment costs - (5,727)
----------- ----------
Net cash provided by financing
activities 1,125 14,300
----------- ----------
Effect of foreign currency exchange rates on
cash and cash equivalents (308) (10)
----------- ----------
Net increase in cash, cash equivalents and
investments 10,044 15,667
Cash, cash equivalents and investments at
beginning of period 108,092 72,971
----------- ----------
Cash, cash equivalents and investments at end of
period $118,136 $88,638
=========== ==========
Free cash flow (2) $9,227 $1,377
=========== ==========
- ------------------------------------------------
(1) The cash flow statements presented herein combine our short-term
and long-term investments with our cash and cash equivalents in an
effort to present our total unrestricted cash and equivalent
balances. In our quarterly filings with the SEC on Forms 10-Q and
10-K, the purchase, sale and maturities of our short-term and
long-term investments will be presented as activities within the
investing activities portion of the cash flow statements.
(2) We define free cash flow as net cash provided by operating
activities plus net cash used in investing activities (excluding
the purchase, sale and maturities of short-term and long-term
investments) as presented below:
Net cash provided by operating activites as
presented above $15,393 $6,481
Net cash used in investing activities as
presented above (6,166) (5,104)
------------ ---------
Free cash flow $9,227 $1,377
============ =========
CONTACT: Equinix, Inc.
Jason Starr, 650-513-7402 (Investor Relations)
jstarr@equinix.com
or
K/F Communications, Inc.
David Fonkalsrud, 415-255-6506 (Media)
dave@kfcomm.com