Earnings reports

Savvis Posts Q3

ST. LOUIS -- SAVVIS, Inc. (NASDAQ:SVVS), a global leader in IT infrastructure services for business applications, announced today that its revenue for the third quarter of 2006 totaled $193.7 million, compared to $166.1 million in the third quarter of 2005 and $189.6 million in the second quarter of 2006. SAVVIS achieved income from operations of $4.1 million in the third quarter, and its consolidated net loss was $13.6 million, compared to a net loss of $13.7 million in the third quarter of 2005 and a net loss of $11.1 million in the second quarter of 2006.

Cost of revenue, which excludes depreciation, amortization, and accretion, was $116.5 million, up 9% from a year ago and down 1% from the prior quarter. Gross profit, defined as total revenue less cost of revenue, was $77.3 million, up 31% from a year ago and 7% from the second quarter 2006. Gross profit as a percentage of total revenue was 40% in the current quarter, up from 36% a year earlier and 38% in the prior quarter. Adjusted EBITDA* of $32.8 million increased 50% from $21.9 million a year earlier, and 15% from $28.5 million in the previous quarter. Operating cash flow was $37.6 million and cash capital expenditures were $14.4 million in the quarter. SAVVIS paid down its revolving credit facility with $32.0 million of cash at the beginning of the quarter. Adjusted for that payment, on a pro forma basis the company generated a total of $24.0 million of cash in the quarter.

Chief Executive Officer Phil Koen said, “SAVVIS continues to drive robust financial results through our focus on changing the way businesses manage information technology. Our core hosting and managed IP VPN revenue, combined, rose 31% from a year ago. Revenue growth, strong sales bookings and record-low customer churn in the third quarter attest to the quality and innovation of our broad service array. We’re working to address the areas of our business that present challenges to our growth, including evaluating our strategic options for the digital content services businesses. I am confident that SAVVIS’ long-term prospects are very positive, and excited by the opportunities ahead.”

Savvis (Nasdaq: SVVS)

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