SAN JOSE, Ca. – December 6, 2007 – Responding to growing global 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 for a new data center in London and expansion of existing data centers in Singapore and the New York metropolitan area. All three facilities will provide a broad range of IT infrastructure services including colocation, managed hosting, virtualized and utility computing, managed networks, and security, to meet the global requirements of enterprise IT. The announcement was made today from SAVVIS’ 2007 Investor Forum in San Jose, Ca.
The company also announced that both the London and Singapore facilities will offer SAVVIS Proximity Hosting to key financial exchanges colocated within the data centers. Initially, the expanded Singapore facility will offer direct connectivity and low latency network access to the Singapore Exchange.
“SAVVIS has had great success with our managed hosting offering in the United Kingdom and the New York area, and has seen significant indications of growing demand for those services in the Asia/Pacific region,” said Phil Koen, Chief Executive Officer of SAVVIS. “We are delighted to be able to build on our existing presence and strong sales and operations teams already in place in these three excellent markets for SAVVIS’ services. Additionally, as major global financial centers, London and Singapore are ideally situated for expansion of our Proximity Hosting service, already in place in the New York area and in development in Chicago, which enables direct connectivity for our customers to major financial exchanges.”
The London data center will provide a total of approximately 35,000 square feet of raised floor space, which SAVVIS anticipates will be brought online in late 2008 yielding a total of approximately 25,000 square feet of sellable space. SAVVIS will expand its space in the Singapore data center to provide a total of approximately 18,000 square feet of raised floor space, including 2,000 square feet in which SAVVIS currently offers managed hosting services. The 16,000 square feet of expansion space will be brought online in two installments in 2008, SAVVIS Responds to Global Demand yielding a total of approximately 13,000 square feet of sellable space. The New York area expansion will comprise approximately 26,000 additional square feet in an existing facility, yielding approximately 17,000 square feet of sellable space that will be available in late 2008. Together, the three facilities increase SAVVIS’ total data-center footprint by approximately 79,000 square feet, yielding approximately 55,000 square feet of sellable space.
SAVVIS anticipates that costs associated with running the new and expanded data centers ahead of customer installation in 2007 will reduce Adjusted EBITDA* for the fourth quarter by approximately $1 million, and costs incurred in 2008 will reduce Adjusted EBITDA for the year by approximately $10 million. As a result, the company is revising its outlook for fourth quarter 2007 Adjusted EBITDA to $38-40 million from $39-41 million previously announced, and revising 2008 Adjusted EBITDA to $200-210 million from $210-220 million previously announced. By 2010, the new London data center and expanded Singapore and New York-area data centers are expected to generate more than $80 million of revenue with an Adjusted EBITDA margin greater than 40%.
SAVVIS will spend approximately $5 million in 2007 to acquire the lease and certain assets in the Singapore data center. In 2008, the company expects to spend approximately $100-110 million of cash capital expenditures to develop the three centers to meet SAVVIS’ standards for connectivity, security and reliability. Funding will be provided by proceeds from the sale of certain assets to Microsoft in June and available cash.
Mr. Rama Pillai, Senior Vice President, Head of Intermediaries and Market Access at the Singapore Exchange said, “We welcome the expansion of SAVVIS' data centre in Singapore. SAVVIS’ Proximity Hosting provides low latency connectivity to our electronic trading platform and market data feeds that our international customers demand. In enhancing market participation and positioning SGX as an Asian risk management centre offering an array of Asian investment opportunities, delivering reliable direct market access is paramount.”
In addition to the new and expanded data centers in London, the New York area and Singapore, SAVVIS has additional data centers in development in the Boston, Chicago and Dallas areas. Upon completion of the development of these data centers, including the new London data center and expanded Singapore and New York area facilities, SAVVIS’ total data center footprint will exceed 1.45 million square feet of raised floor encompassing 31 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 is an industry leader 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, gains and losses on sales of assets, 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, including financial performance and product growth, 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, variability in pricing for SAVVIS’ products, highly competitive markets, rapid evolution of technology, variability in the availability and terms of financing, uncertainties related to merger and acquisition activity, changes in our operating environment, and changes in regulatory environments. The forward-looking statements contained in this document speak only as of the date of publication, December 6, 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.