SAVVIS Records $125.2 Million Gain on Sale of Non-strategic Assets
SAVVIS, Inc. (NASDAQ: SVVS), a global leader in IT infrastructure services for business applications, announced today that its revenue for the first quarter of 2007 totaled $205.2 million. Income from operations, which included $125.2 million from the gain on the sale of non-strategic assets, was $139.0 million in the first quarter 2007, and net income was $114.5 million.
First quarter operating cash flow was $28.3 million, and cash capital expenditures were $35.8 million, of which $12.7 million was for previously-announced growth projects, including the build-out of four new data centers and SAVVISâ next-generation network.
Total cash and cash equivalents were $221.6 million at March 31, 2007. Results for the first quarter of 2007 included a $125.2 million gain on the sale of non-strategic assets, and $3.6 million of non-recurring, colocation revenue related to the resolution of a contractual dispute that had been reserved for in 2006. Excluding the impact of these nonrecurring items:
â¢ first quarter 2007 revenue would be $201.6 million, up 12% from the same period a year ago and essentially flat compared to the prior quarter;
â¢ gross profit, defined as total revenue less cost of revenue, would be $84.9 million, up 27% from the same period a year ago and 3% from the prior quarter, and would be 42% of current-quarter revenue;
â¢ income from operations would be $10.1 million, compared to $3.7 million in the same period a year ago and $11.6 million in the prior quarter; and
â¢ Adjusted EBITDA* would be $39.6 million, up 56% from the same period a year ago and 10% from the prior quarter, resulting in a 20% Adjusted EBITDA margin.
Chief Executive Officer Phil Koen said, âOur first quarter financial results reflect continued strong growth in SAVVISâ core revenue from hosting services, with managed hosting revenue up 37% from a year ago, and 4% from last quarter. Our customers, and industry analysts, agree that SAVVIS provides a unique value proposition in offering IT infrastructure as a service. Our strong Adjusted EBITDA performance in the quarter demonstrates the success of the SAVVIS business model in generating margin improvement.â