ST. LOUIS – October 17, 2007 – Responding to growing customer demand for integrated hosting and network services, SAVVIS, Inc. (NASDAQ:SVVS), a global leader in IT infrastructure services for business applications, today announced plans to open two new data centers in the Boston and Chicago metropolitan areas. The new centers will provide a broad range of IT infrastructure services, including colocation, managed hosting, virtualized and utility computing, managed networks, and security, to meet the growing needs of enterprise IT.
The company also announced that the new Chicago data center will offer SAVVIS Proximity Hosting which provides direct connectivity and low latency network access to major financial exchanges and Electronic Communications Networks located inside the data center.
“SAVVIS is focused on being a market leader by offering our customers highly integrated compute, storage & network infrastructures provisioned as a service,” said Phil Koen, Chief Executive Officer of SAVVIS. “In response to strong customer demand, we are adding new data centers in Chicago and Boston where we have a strong customer base with sales & operations staff in place and well-positioned to capture that demand. Further, since these centers are in final stages of build out to SAVVIS’ high standards for reliability and redundancy, we will be able to make them available to customers in a very short time frame, offering our full portfolio of colocation, managed hosting, utility computing and network solutions.”
SAVVIS anticipates spending approximately $3 million in capital expenditure in 2007 to develop these two new centers, and an additional $12 million in 2008. Funding will be provided by the proceeds of the sale of certain assets to Microsoft announced in June and cash generated by operations.
The Boston data center will provide a total of approximately 40,000 square feet of raised floor space, to be brought on line in two installments, the first in late 2007 followed by a second in the latter half of 2008 yielding a total of approximately 25,000 square feet of revenue-generating space. The Chicago data center will provide a total of 20,000 square feet of raised floor space yielding 10,000 square feet of revenue-generating space, and will be brought on line beginning in the second quarter of 2008. By 2011, the data centers are expected to generate more than $50 million of revenue at approximately 40% Adjusted EBITDA margin.
In addition to the new data centers in Boston and Chicago, SAVVIS developed and opened four new data centers in September and October 2007 in the Atlanta, Washington, DC, Silicon Valley and New York metropolitan areas. With the two new centers announced today, SAVVIS’ total data center footprint exceeds 1.3 million square feet of raised floor encompassing 29 data centers worldwide.
SAVVIS, Inc. (NASDAQ: SVVS) is a global leader in IT infrastructure services for business applications. With an IT services platform spanning North America, Europe, and Asia, SAVVIS leads the industry in delivering secure, reliable, and scalable hosting, network, and application services. These solutions enable customers to focus on their core business while SAVVIS ensures the quality of their IT systems and operations. SAVVIS’ strategic approach combines virtualization technology, a global network and multiple data centers, and automated management and provisioning systems. For more information about SAVVIS, visit www.savvis.net.
* Adjusted EBITDA
“Adjusted EBITDA” represents income (loss) from operations before depreciation, amortization, accretion, interest expense, gains and losses on acquisitions and divestitures, and non-cash equity-based compensation. We have included information concerning Adjusted EBITDA because we believe that in our industry such information is a relevant measurement of a company's operating financial performance and liquidity. The calculation of Adjusted EBITDA is not specified by United States generally accepted accounting principles. Our calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from SAVVIS’ expectations. Certain factors that could adversely affect actual results are set forth as risk factors described in SAVVIS’ SEC reports and filings, including its annual report on Form 10-K for the year ended December 31, 2006, and all subsequent filings. Those risk factors include, but are not limited to, the risk that customer demand, profitability, and cash flow results may be materially different from those set forth in this release, variability in pricing for SAVVIS’ products, highly competitive markets, rapid evolution of technology, uncertainties related to merger and acquisition activity, and changes in our operating environment. The forward-looking statements contained in this document speak only as of the date of publication, October 17, 2007. Subsequent events and developments may cause the company’s forward-looking statements to change, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.