ST. LOUIS, MO – September 19, 2005 – SAVVIS, Inc. (NASDAQ:SVVS), a leading global IT utility service provider, and one of the world’s largest providers of hosting services, today announced the commissioning of its state-of-the-art, 127,000 square foot, Tier-1 data center in Santa Clara, Ca. The center is expected to open in the first quarter of 2006. SAVVIS currently operates 24 data centers encompassing more than 1.3 million square feet around the world.
SAVVIS Chairman and CEO Rob McCormick noted, “SAVVIS is responding to strong demand for the top-quality hosting services our customers rely on us to provide. Our fully-built out data centers in the Silicon Valley are near capacity, and we continue to have new business opportunities. This center, which is near completion already, will play an important role in our continued growth in Silicon Valley and in the IT infrastructure marketplace.”
SAVVIS acquired the facility’s long-term lease as part of its 2004 purchase of the assets of Cable & Wireless America (CWA). Originally built for Exodus Communications, the facility was approximately 85% complete when construction was halted. SAVVIS is currently in the process of completing the facility and anticipates a total of $12-14 million in capital expenditures, with approximately $8-10 million incurred in 2005 and the remainder in the first quarter of 2006.
Commenting on the financing of the new facility, SAVVIS Chief Financial Officer Jeffrey Von Deylen, said, “Given our growing confidence in the market as well as our recent bank financing, we have made the decision to complete the build-out of this data center. As a result, we are increasing our capital expenditure guidance for 2005 to $53-58 million. Despite the increase in capital expenditures for the remainder of 2005, we continue to expect to generate positive cash flow for the second half of 2005.” Von Deylen added, “Given continued strength in our performance, we believe SAVVIS will perform at the high end of its guidance for revenue and Adjusted EBITDA for the full year 2005. Our refined outlook for the full-year 2005 results is for revenue in the range of $660-670 million, and Adjusted EBITDA in a range of $70-75 million.”
The center will feature a physical infrastructure that meets or exceeds SAVVIS’ industry-leading standards for high performance, power availability, cooling, security, network connectivity, and environmental control. This includes state-of-the-art physical and electronic security systems, next-generation power systems, advanced systems management and monitoring, dual entrance fiber conduits that connect to multiple carriers including SAVVIS’ global private network, and full system redundancy.
SAVVIS named St. Louis-based Ascent Corp. as the program director for the completion and commissioning of the facility, while another St. Louis company, Clayco was selected as the contractor on this fast-track project.
SAVVIS’ new data center opens at a time when demand for hosting services and the price of data center floor space is rising rapidly. Gartner Dataquest now forecasts North American hosting markets will grow from $6.9 billion in 2003 to $32.2 billion in 2008.
SAVVIS offers customers a variety of flexible and cost-effective hosting models that can easily be mixed and interchanged. These range from unmanaged co-location services all the way to fully managed, virtualized utility services that provide the maximum cost and performance benefits.
SAVVIS’ virtualized utility services delivery platform is the first to integrate network, hosting, storage, and compute architectures for delivering on-demand utility services to enterprise customers. The virtualized platform leverages more than 10 years of custom development and is based on highly advanced and automated software management and provisioning systems developed by SAVVIS. It eliminates expensive hardware and gives companies a secure, private and completely “virtual” network and hosting infrastructure that cuts internal IT costs by as much as 50 percent while offering an integrated set of previously unavailable services.
McCormick added, “SAVVIS is committed to developing innovative hosting models that allow our customers to be more agile, improve IT performance, and lower their costs. At the same time we are leveraging new virtualization technologies that allow us to pool and deliver server cycles, storage capacity, and network bandwidth to run customer applications, while significantly reducing floor space required in our data centers. This model is creating enormous efficiencies that are increasing profitability per square foot.”
SAVVIS, Inc. (NASDAQ: SVVS) is a global IT utility services provider that focuses exclusively on IT solutions for businesses. With an IT services platform that extends to 47 countries, SAVVIS has over 5,000 enterprise customers and 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 24 data centers, and automated management and provisioning systems. For more information about SAVVIS, visit: .
*“Adjusted EBITDA” represents results from operations before net restructuring charges, integration costs, depreciation, amortization, accretion, and non-cash equity-based compensation. SAVVIS reports information concerning Adjusted EBITDA because our management believes that, in our industry, such information is a relevant measurement of a company's financial performance and liquidity. The calculation of Adjusted EBITDA is not specified by U.S. generally accepted accounting principles. Our calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Please see SAVVIS’ press release or SEC Form 8K of July 19, 2005, for a reconciliation of Adjusted EBITDA.
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 affect actual results are set forth as risk factors in SAVVIS’ SEC reports and filings, including its annual report on Form 10-K and all subsequent filings. SAVVIS assumes no obligation to update or supplement forward-looking statements.