Exhibit 99.1
Equinix Reports First Quarter 2006 Results
FOSTER CITY, Calif.--(BUSINESS WIRE)--April 26, 2006--Equinix,
Inc. (Nasdaq:EQIX):
-- Increased revenues to $64.9 million, a 5% increase over the
previous quarter and a 33% increase over the same quarter last
year
-- Increased EBITDA, a non-GAAP financial measure, to $22.8
million
-- Signed 61 new customers including McGraw-Hill, Trip Advisor
and YouTube
-- Raises annual revenue guidance to $280.0 to $286.0 million and
EBITDA guidance to $100.0 to $105.0 million
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, 2006.
Revenues were $64.9 million for the first quarter, a 5% increase
over the previous quarter and a 33% increase over the same quarter
last year. Recurring revenues, consisting primarily of colocation,
interconnection and managed services, were $61.8 million, a 6%
increase over the previous quarter and a 35% increase over the same
quarter last year. Non-recurring revenues were $3.1 million in the
quarter, consisting primarily of professional services and
installation fees.
Note: 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), non-GAAP net income (loss), free cash flow and adjusted
free cash flow to evaluate its operations. A reconciliation of these
non-GAAP financial measures to the most closely applicable GAAP
financial measure is attached to this release and commences at the
bottom of our condensed consolidated statements of operations -- GAAP
presentation.
Cost of revenues were $43.3 million for the first quarter,
including $758,000 of stock-based compensation, a 4% increase over the
previous quarter and an 18% increase over the same quarter last year.
Cost of revenues, excluding depreciation, amortization, accretion and
stock-based compensation of $18.0 million, were $25.3 million for the
first quarter, flat over the previous quarter and a 15% increase over
the same quarter last year. Cash gross margins, defined as gross
profit less depreciation, amortization, accretion and stock-based
compensation, divided by revenues, for the quarter were 61%, up from
59% the previous quarter and 55% the same quarter last year.
Selling, general and administrative expenses were $24.3 million
for the first quarter, including $7.0 million of stock-based
compensation, a 41% increase over the previous quarter and a 59%
increase over the same quarter last year. Selling, general and
administrative expenses, excluding depreciation, amortization and
stock-based compensation of $7.5 million, were $16.8 million for the
first quarter, a 13% increase over the previous quarter and a 35%
increase over same quarter last year.
Net loss for the first quarter, including stock-based compensation
expense of $7.8 million, was $5.1 million. This represents a basic and
diluted net loss per share of $0.18 based on a weighted average share
count of 27.8 million. Excluding stock-based compensation, the Company
was net income positive for the first quarter, with a non-GAAP net
income of $2.7 million. This was down $508,000 from the previous
quarter's result of $3.2 million, and a $6.0 million improvement over
the same quarter last year.
EBITDA, defined as income or loss from operations before
depreciation, amortization, accretion, stock-based compensation
expense and restructuring charges, for the first quarter was $22.8
million, up 5% over the previous quarter and up from $14.3 million the
same quarter last year.
Capital expenditures in the first quarter were $26.6 million, of
which $6.9 million was attributed to ongoing capital expenditures and
$19.7 million was attributed to expansion capital expenditures.
The Company generated cash from operating activities of $12.8
million as compared to $18.6 million in the previous quarter. Cash
used in investing activities was $24.1 million as compared to $65.9
million in the previous quarter. Adjusted free cash flow was a
negative $11.3 million in the first quarter. Adjusted free cash flow
is defined as net cash generated from operating activities less net
cash used in investing activities (excluding the purchases, sales and
maturities of short-term and long-term investments and the purchase
and sale of real estate).
As of March 31, 2006, the Company's cash, cash equivalents and
investments were $162.2 million after repaying $30.0 million under the
Silicon Valley Bank line of credit, as compared to $188.9 million in
the previous quarter.
Other Company Developments & Metrics
-- On a same IBX basis (defined as IBX centers which have been
available for new customer installs for at least four full
quarters), revenues were $62.5 million; cost of revenues were
$38.8 million; cost of revenues, excluding depreciation,
amortization, accretion and stock-based compensation, were
$22.5 million and cash gross margins for the quarter were 64%.
EBITDA on a same IBX basis was $23.5 million. These results
now include Equinix's Washington, D.C. area center opened in
December 2004.
-- Equinix added 61 new customers in the quarter including iGames
Online, LeBoeuf Lamb, McGraw-Hill, MovieClick, Packet
Exchange, Trip Advisor and YouTube.
-- Over 50 percent of Equinix's new bookings in the quarter came
from existing customers including Akamai Technologies, Cisco
Systems, IBM, Salesforce.com and Sony Computer Entertainment.
-- Based on a total cabinet capacity of approximately 26,000, the
number of cabinets billing at the end of the quarter was
approximately 14,750, or 57%, up from approximately 14,100 the
previous quarter. On a weighted average basis, the number of
cabinets billing was approximately 14,500, representing a
utilization rate of 56%.
-- U.S. interconnection service revenues were 21% of U.S.
recurring revenues for the quarter. Interconnection services
represent greater than 19% of total worldwide recurring
revenues. Equinix signed additional customers on its new 10
Gigabit Ethernet service including Hurricane Electric and UPC
Broadband.
-- After more than six years on the Equinix Board of Directors,
Mike Volpi will not stand for re-election to the Board. Mr.
Volpi has decided to dedicate more time to his business
priorities at Cisco. He will remain on the Equinix Board until
June 8, 2006.
Business Outlook
For the second quarter 2006, revenues are expected to be in the
range of $67.5 to $68.5 million. Cash gross margins will be
approximately 60%. Cash selling, general and administrative expenses
are expected to be approximately $16.5 million. EBITDA for the second
quarter is expected to be $24.0 to $25.0 million. Net loss is expected
to be approximately $5.0 million, including the impact of
approximately $8.0 million of stock-based compensation expense. Net
interest expense will be approximately $2.0 million. The weighted
average shares outstanding will be approximately 28.4 million. Capital
expenditures are expected to be approximately $30.0 to $35.0 million,
including $20.0 to $25.0 million of expansion capital expenditures.
For the full year of 2006, total revenues are expected to be in
the range of $280.0 to $286.0 million. Cash gross margins are expected
to be in the range of 58% to 60%, including the full year impact of
approximately $4.0 million of additional cost of revenues from three
new IBX centers. Cash selling, general and administrative expenses are
expected to be approximately $64.0 million, including approximately
$4.4 million of investments in expansion efforts. EBITDA for the year
is expected to be $100.0 to $105.0 million. Net loss for the year is
expected to be approximately $15.0 million, including the impact of
approximately $30.0 million of stock-based compensation expense. Net
interest expense will be approximately $9.0 million. Capital
expenditures for 2006 are expected to be in a range of $100.0 to
$105.0 million, comprised of approximately $25.0 million of ongoing
capital expenditures and $75.0 to $80.0 million of expansion capital
expenditures for the build out of the Chicago, Los Angeles and Silicon
Valley expansions, as well as the expansion build out in the
Washington, D.C. area campus. We expect our adjusted free cash flow to
be in a range of negative $5.0 to $10.0 million for the year. Adjusted
free cash flow is defined as net cash generated from operating
activities less net cash used in investing activities (excluding the
purchases, sales and maturities of short-term and long-term
investments, as well as purchases and sales of real estate).
The Company will discuss first quarter results on Wednesday, April
26, 2006, at 5:30 p.m. ET (2:30 p.m. PT). To hear the conference call
live, please dial 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 26, 2006 at 7:30 p.m. (ET) by dialing
203-369-3395. In addition, the Webcast will be available 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 Internet Business Exchange(TM) (IBX(R)) centers in 11
markets in the U.S. and Asia, 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 acquiring, operating and constructing IBX
centers and developing, deploying and delivering Equinix services; a
failure to receive significant revenue from customers in
recently-acquired data centers; failure to complete any financing
arrangements contemplated from time to time; competition from existing
and new competitors; the ability to generate sufficient cash flow or
otherwise obtain funds to repay new or 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 and registration statement on Form S-3 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), non-GAAP net income (loss), free cash flow and adjusted
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 and restructuring charges. 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 IBX
expansion projects or acquired 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 liabilities, 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. 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. Management believes such
restructuring charges 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 does not provide forward-looking guidance for certain
financial data, such as depreciation, amortization, accretion, net
income (loss) from operations, interest income, cash generated from
operating activities and cash used in investing activities, and as a
result, is not able to provide a reconciliation of GAAP to non-GAAP
financial measures for forward-looking data. 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, 2006 and 2005, presented within this press release.
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP PRESENTATION
(in thousands, except per share detail)
(unaudited)
Three Months Ended
------------------------------------
March 31, December 31, March 31,
2006 2005 2005
------------ ------------ ----------
Recurring revenues $61,752 $58,380 $45,901
Non-recurring revenues 3,117 3,418 2,783
------------ ------------ ----------
Revenues 64,869 61,798 48,684
Cost of revenues 43,345 41,715 36,873
------------ ------------ ----------
Gross profit 21,524 20,083 11,811
------------ ------------ ----------
Operating expenses:
Sales and marketing 7,198 5,759 4,819
General and administrative 17,130 11,516 10,489
Restructuring charges - 33,814 -
------------ ------------ ----------
Total operating expenses 24,328 51,089 15,308
------------ ------------ ----------
Income (loss) from operations (2,804) (31,006) (3,497)
------------ ------------ ----------
Interest and other income
(expense):
Interest income 1,611 940 667
Interest expense and other (3,868) (2,548) (2,459)
------------ ------------ ----------
Total interest and other,
net (2,257) (1,608) (1,792)
------------ ------------ ----------
Net loss before income taxes and
cumulative effect of a change in
accounting principle (5,061) (32,614) (5,289)
Income taxes (385) 10 (505)
Net loss before cumulative effect
of a change in accounting ------------ ------------ ----------
principle (5,446) (32,604) (5,794)
Cumulative effect of a change
in accounting principle 376 - -
------------ ------------ ----------
Net loss $(5,070) $(32,604) $(5,794)
============ ============ ==========
Net loss per share:
Basic and diluted net loss per share before
cumulative effect of a change in
accounting principle $(0.20) $(1.25) $(0.26)
Cumulative effect of a change in
accounting principle 0.02 - -
------------ ------------ ----------
Basic and diluted net loss per
share $(0.18) $(1.25) $(0.26)
============ ============ ==========
Shares used in computing basic and
diluted net loss per share 27,848 26,100 21,898
============ ============ ==========
- ----------------------------------------------------------------------
Non-GAAP net income (loss)(1) $2,688 $3,196 $(3,350)
============ ============ ==========
(1) Non-GAAP net income (loss) excludes stock-based compensation and
restructuring charges as follows:
Net loss $(5,070) $(32,604) $(5,794)
Stock-based compensation 7,758 1,986 2,444
Restructuring charges - 33,814 -
------------ ------------ ----------
Non-GAAP net income (loss) $2,688 $3,196 $(3,350)
============ ============ ==========
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS -
NON-GAAP PRESENTATION
(in thousands)
(unaudited)
Three Months Ended
----------------------------------
March 31, December 31, March 31,
2006 2005 2005
---------- ------------ ----------
Recurring revenues $61,752 $58,380 $45,901
Non-recurring revenues 3,117 3,418 2,783
---------- ------------ ----------
Revenues (1) 64,869 61,798 48,684
Cash cost of revenues (2) 25,272 25,192 21,929
---------- ------------ ----------
Cash gross profit (3) 39,597 36,606 26,755
---------- ------------ ----------
Cash operating expenses (4):
Cash sales and marketing
expenses (5) 5,291 5,332 4,357
Cash general and administrative
expenses (6) 11,471 9,446 8,061
---------- ------------ ----------
Total cash operating
expenses (7) 16,762 14,778 12,418
---------- ------------ ----------
EBITDA (8) $22,835 $21,828 $14,337
========== ============ ==========
Cash gross margins (9) 61% 59% 55%
========== ============ ==========
EBITDA flow-through rate (10) 33% 106% 53%
========== ============ ==========
- ------------------------------------
(1) The geographic split of our revenues is presented below:
U.S. revenues $55,840 $53,463 $42,016
Asia-Pacific revenues 9,029 8,335 6,668
---------- ------------ ----------
Revenues $64,869 $61,798 $48,684
========== ============ ==========
Revenues on a services basis is presented below:
Colocation $45,569 $43,127 $33,236
Interconnection 11,804 11,181 9,324
Managed infrastructure 3,933 3,760 3,341
Rental 446 312 -
---------- ------------ ----------
Recurring revenues 61,752 58,380 45,901
Non-recurring revenues 3,117 3,418 2,783
---------- ------------ ----------
Revenues $64,869 $61,798 $48,684
========== ============ ==========
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 $62,530 $56,752 $48,457
New IBX centers 2,339 5,046 227
---------- ------------ ----------
Revenues $64,869 $61,798 $48,684
========== ============ ==========
(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 $43,345 $41,715 $36,873
Depreciation, amortization and
accretion expense (17,315) (16,523) (14,944)
Stock-based compensation expense (758) - -
---------- ------------ ----------
Cash cost of revenues $25,272 $25,192 $21,929
========== ============ ==========
The geographic split of our cash cost of revenues is
presented below:
U.S. cash cost of revenues $20,951 $20,954 $18,061
Asia-Pacific cash cost of
revenues 4,321 4,238 3,868
---------- ------------ ----------
Cash cost of revenues $25,272 $25,192 $21,929
========== ============ ==========
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 $22,476 $21,605 $21,091
Same IBX centers-depreciation,
amortization and accretion
expense 15,532 14,277 14,196
Same IBX centers-stock-based
compensation expense 758 - -
---------- ------------ ----------
Same IBX centers cost of
revenues 38,766 35,882 35,287
---------- ------------ ----------
New IBX centers-cash cost of
revenues 2,796 3,587 838
New IBX centers-depreciation,
amortization and accretion
expense 1,783 2,246 748
New IBX centers-stock-based
compensation expense - - -
---------- ------------ ----------
New IBX centers cost of
revenues 4,579 5,833 1,586
---------- ------------ ----------
Cost of revenues $43,345 $41,715 $36,873
========== ============ ==========
(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 $7,198 $5,759 $4,819
Depreciation and amortization
expense (15) (15) (15)
Stock-based compensation expense (1,892) (412) (447)
---------- ------------ ----------
Cash sales and marketing
expenses $5,291 $5,332 $4,357
========== ============ ==========
(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 $17,130 $11,516 $10,489
Depreciation and amortization
expense (551) (496) (431)
Stock-based compensation expense (5,108) (1,574) (1,997)
---------- ------------ ----------
Cash general and
administrative expenses $11,471 $9,446 $8,061
========== ============ ==========
(7) Our cash operating expenses, or cash SG&A, as defined above, is
presented below:
Cash sales and marketing
expenses $5,291 $5,332 $4,357
Cash general and administrative
expenses 11,471 9,446 8,061
---------- ------------ ----------
Cash SG&A $16,762 $14,778 $12,418
========== ============ ==========
The geographic split of our cash operating expenses, or
cash SG&A, is presented below:
U.S. cash SG&A $13,327 $12,026 $9,908
Asia-Pacific cash SG&A 3,435 2,752 2,510
---------- ------------ ----------
Cash SG&A $16,762 $14,778 $12,418
========== ============ ==========
(8) We define EBITDA as income (loss) from operations less
depreciation, amortization, accretion, stock-based compensation
expense and restructuring charges as presented below:
Income (loss) from operations $(2,804) $(31,006) $(3,497)
Depreciation, amortization and
accretion expense 17,881 17,034 15,390
Stock-based compensation expense 7,758 1,986 2,444
Restructuring charges - 33,814 -
---------- ------------ ----------
EBITDA $22,835 $21,828 $14,337
========== ============ ==========
The geographic split of our EBITDA is presented below:
U.S. income (loss) from
operations $(2,247) $(31,504) $(2,614)
U.S. depreciation, amortization
and accretion expense 16,866 16,187 14,217
U.S. stock-based compensation
expense 6,943 1,986 2,444
U.S. restructuring charges - 33,814 -
---------- ------------ ----------
U.S. EBITDA 21,562 20,483 14,047
---------- ------------ ----------
Asia-Pacific income (loss) from
operations (557) 498 (883)
Asia-Pacific depreciation,
amortization and accretion
expense 1,015 847 1,173
Asia-Pacific stock-based
compensation expense 815 - -
Asia-Pacific restructuring
charges - - -
---------- ------------ ----------
Asia-Pacific EBITDA 1,273 1,345 290
---------- ------------ ----------
EBITDA $22,835 $21,828 $14,337
========== ============ ==========
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-income (loss)
from operations $(368) $(29,882) $(1,955)
Same IBX centers-depreciation,
amortization and accretion
expense 16,098 14,788 14,642
Same IBX centers-stock-based
compensation expense 7,758 1,986 2,444
Same IBX centers-restructuring
charges - 33,814 -
---------- ------------ ----------
Same IBX center EBITDA 23,488 20,706 15,131
---------- ------------ ----------
New IBX centers-income (loss)
from operations (2,436) (1,124) (1,542)
New IBX centers-depreciation,
amortization and accretion
expense 1,783 2,246 748
New IBX centers-stock-based
compensation expense - - -
New IBX centers-restructuring
charges - - -
---------- ------------ ----------
New IBX center EBITDA (653) 1,122 (794)
---------- ------------ ----------
EBITDA $22,835 $21,828 $14,337
========== ============ ==========
(9) 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 62% 61% 57%
========== ============ ==========
Asia-Pacific cash gross margins 52% 49% 42%
========== ============ ==========
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 64% 62% 56%
========== ============ ==========
(10) We define EBITDA flow-through rate as incremental adjusted EBITDA
growth divided by incremental revenue growth as follows:
EBITDA - current period $22,835 $21,828 $14,337
Less EBITDA - prior period (21,828) (17,919) (12,363)
---------- ------------ ----------
EBITDA growth $1,007 $3,909 $1,974
========== ============ ==========
Revenues - current period $64,869 $61,798 $48,684
Less revenues - prior period (61,798) (58,096) (44,989)
---------- ------------ ----------
Revenue growth $3,071 $3,702 $3,695
========== ============ ==========
EBITDA flow-through rate 33% 106% 53%
========== ============ ==========
EQUINIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
Assets March 31, December 31,
2006 2005
------------ ------------
Cash, cash equivalents and investments $162,223 $188,855
Accounts receivable, net 18,470 17,237
Property and equipment, net 449,236 438,790
Goodwill and other intangible assets, net 23,434 21,829
Debt issuance costs, net 2,867 3,075
Prepaid expenses 5,284 5,098
Deposits 4,193 3,548
Other assets 3,709 2,565
------------ ------------
Total assets $669,416 $680,997
============ ============
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $21,185 $22,557
Accrued property and equipment 18,295 15,783
Accrued restructuring charges 47,718 49,831
Borrowings under credit line - 30,000
Mortgage payable 59,795 60,000
Capital lease obligations 34,332 34,530
Other financing obligations 61,509 61,675
Convertible subordinated debentures 86,250 86,250
Deferred installation revenue 7,137 7,658
Customer deposits 923 1,188
Deferred rent 21,119 18,792
Asset retirement obligations 3,773 3,649
Other liabilities 480 411
------------ ------------
Total liabilities 362,516 392,324
------------ ------------
Common stock 29 27
Additional paid-in capital 857,040 839,497
Deferred stock-based compensation - (4,930)
Accumulated other comprehensive income 1,948 1,126
Accumulated deficit (552,117) (547,047)
------------ ------------
Total stockholders' equity 306,900 288,673
------------ ------------
Total liabilities and stockholders'
equity $669,416 $680,997
============ ============
- --------------------------------------------------------- ------------
Ending headcount by geographic region is as follows:
U.S. headcount 403 372
Asia-pacific headcount 167 165
------------ ------------
Total headcount 570 537
============ ============
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (1)
(in thousands)
(unaudited)
Three Months Ended
-------------------------------
March 31, December 31, March 31,
2006 2005 2005
--------- ----------- ---------
Cash flows from operating activities:
Net loss $(5,070) $(32,604) $(5,794)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation, amortization and
accretion 17,881 17,034 15,390
Stock-based compensation 7,758 1,986 2,444
Non-cash interest expense 208 224 905
Restructuring charges - 33,814 -
Other reconciling items (727) (507) 508
Changes in operating assets and
liabilities:
Accounts receivable (1,251) (1,031) (2,264)
Accounts payable and accrued
expenses (993) 153 (450)
Accrued restructuring charges (2,957) (1,618) (482)
Other assets and liabilities (2,058) 1,108 5,136
--------- ----------- ---------
Net cash provided by operating
activities 12,791 18,559 15,393
--------- ----------- ---------
Cash flows from investing activities:
Purchase of Ashburn campus property - (53,759) -
Purchase of Los Angeles IBX property - (21) -
Purchases of other property and
equipment (26,613) (22,920) (5,523)
Accrued property and equipment 2,512 10,626 (643)
Other investing activities 6 125 -
--------- ----------- ---------
Net cash used in investing
activities (24,095) (65,949) (6,166)
--------- ----------- ---------
Cash flows from financing activities:
Proceeds from warrants, stock
options and employee stock purchase
plans 14,714 1,772 4,347
Proceeds from borrowing under credit
line - 30,000 -
Proceeds from Los Angeles IBX
financing - 38,142 -
Proceeds from mortgage payable - 60,000 -
Repayment of borrowings under credit
line (30,000) - -
Repayment of capital lease
obligations (197) (186) (160)
Repayment of other financing
obligations (167) (1,124) (3,062)
Repayment of mortgage payable (205) - -
Other financing activities 370 (655) -
--------- ----------- ---------
Net cash provided by (used in)
financing activities (15,485) 127,949 1,125
--------- ----------- ---------
Effect of foreign currency exchange
rates on cash and cash equivalents 157 6 (308)
--------- ----------- ---------
Net increase (decrease) in cash, cash
equivalents and investments (26,632) 80,565 10,044
Cash, cash equivalents and investments
at beginning of period 188,855 108,290 108,092
--------- ----------- ---------
Cash, cash equivalents and investments
at end of period $162,223 $188,855 $118,136
========= =========== =========
Free cash flow (2) $(11,304) $(47,390) $9,227
========= =========== =========
Adjusted free cash flow (3) $(11,304) $6,390 $9,227
========= =========== =========
- ---------------------------------------
(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 purchases, sales 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 purchases, sales and maturities of short-term and long-term
investments) as presented below:
Net cash provided by operating
activities as presented above $12,791 $18,559 $15,393
Net cash used in investing
activities as presented above (24,095) (65,949) (6,166)
--------- ----------- ---------
Free cash flow $(11,304) $(47,390) $9,227
========= =========== =========
(3) We define adjusted free cash flow as free cash flow (as defined
above) excluding any purchases or sales of real estate as
presented below:
Free cash flow (as defined above) $(11,304) $(47,390) $9,227
Less purchase of Ashburn campus
property - 53,759 -
Less purchase of Los Angeles IBX
property - 21 -
--------- ----------- ---------
Adjusted free cash flow $(11,304) $6,390 $9,227
========= =========== =========
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