SAVVIS Inc. (SVVS, Financial) filed Quarterly Report for the period ended 2009-06-30.
SAVVIS Inc is a global IT utility services provider that focuses exclusively on IT solutions for businesses. With an IT services platform spanning North America Europe and Asia SAVVIS has over 5000 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 25 data centers and automated management and provisioning systems. SAVVIS Inc. has a market cap of $828 million; its shares were traded at around $15.26 with and P/S ratio of 1.
Other Income and Expense. Other income and expense represents interest on our long-term debt, interest on our capital and financing method lease obligations, certain other non-operating charges, and interest income on our invested cash balances. Other income and expense was $14.9 million for the three months ended June 30, 2009, an increase of $3.6 million, or 32%, from $11.3 million for the three months ended June 30, 2008. The $2.7 million increase in interest expense for the three months ended June 30, 2009 was driven by a $0.9 million increase in interest on capital leases and the Cisco loan, $1.1 million of interest on the Lombard loan, and a $0.5 million decrease in capitalized interest. Interest income decreased $0.7 million due to lower average interest rates and lower average daily cash balances invested during the three months ended June 30, 2009. Other income and expense decreased $0.2 million due to less favorable impact from currency revaluation of foreign denominated balances, combined with recognition of ineffectiveness on our interest rate swap during the three months ended June 30, 2009. The following table presents a quarterly overview of the components of other income and expense (dollars in thousands):
Revenue increased $25.2 million, or 6%, for the six months ended June 30, 2009 compared to the six months ended June 30, 2008, primarily as a result of a 13% increase in total hosting services, partially offset by declines in network services revenue. Income from operations increased to $25.1 million for the six months ended June 30, 2009 compared to income from operations of $0.4 million for the six months ended June 30, 2008. The increase in income from operations of $24.7 million was due to increases in both revenues and operating efficiencies. Loss before income taxes for the six months ended June 30, 2009 was $4.2 million. Loss before income taxes improved $12.7 million from $16.9 million for the six months ended June 30, 2008.
Cost of Revenue. Cost of revenue was $242.0 million for the six months ended June 30, 2009, an increase of $6.7 million, or 3%, from $235.3 million for the six months ended June 30, 2008. This increase was primarily driven by an expanded cost base to support revenue growth, including $9.7 million in rent and utilities on new data centers, which included $0.7 million of costs to exit a network facility, and $1.0 million in real estate taxes, partially offset by a $4.0 million decrease in customer related costs. Cost of revenue, as a percentage of revenue, was 55% for the six months ended June 30, 2009 compared to 57% for the six months ended June 30, 2008.
Other Income and Expense. Other income and expense was $29.4 million for the six months ended June 30, 2009, an increase of $12.0 million, or 69%, from $17.4 million for the six months ended June 30, 2008. The $5.6 million increase in interest expense for the three months ended June 30, 2009 was driven by a $2.2 million increase in interest on capital leases and the Cisco loan, $2.0 million of interest on the Lombard loan, and a $0.8 million decrease in capitalized interest. Interest income decreased $2.2 million due to lower average interest rates and lower average daily cash balances invested during the six months ended June 30, 2009. Other income and expense decreased $4.2 million due to less favorable impact from currency revaluation of foreign denominated balances, combined with the recognition of ineffectiveness on our interest rate swap during the six months ended June 30, 2009. The following table presents a year-to-date overview of the components of other income and expense (dollars in thousands):
As of June 30, 2009, our cash and cash equivalents balance was $154.9 million. We generated $84.0 million in net cash provided by operating activities during the six months ended June 30, 2009, an increase of $30.6 million from net cash provided by operating activities of $53.4 million for the six months ended June 30, 2008. This change was primarily due to overall improvements in our operating results, largely resulting from continued operational efficiencies and cost-savings initiatives. Net cash used in investing activities for the six months ended June 30, 2009 was $45.5 million, a decrease of $94.9 million from net cash used in investing activities of $140.4 million for the six months ended June 30, 2008. This decrease was driven by a decrease in expansion related capital expenditures during the six months ended June 30, 2009. Net cash used in financing activities for the six months ended June 30, 2009 was $5.0 million, a decrease of $31.2 million from net cash provided by financing activities of $26.2 million for the six months ended June 30, 2008. This decrease primarily relates to $33.3 million in proceeds from the Lombard financing agreement in the six months ended June 30, 2008, compared to $2.9 million in the six months ended June 30, 2009.
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SAVVIS Inc is a global IT utility services provider that focuses exclusively on IT solutions for businesses. With an IT services platform spanning North America Europe and Asia SAVVIS has over 5000 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 25 data centers and automated management and provisioning systems. SAVVIS Inc. has a market cap of $828 million; its shares were traded at around $15.26 with and P/S ratio of 1.
Highlight of Business Operations:
Revenue increased $6.9 million, or 3%, for the three months ended June 30, 2009 compared to the three months ended June 30, 2008, primarily as a result of a 9% increase in total hosting services, partially offset by declines in network services revenue. Income from operations increased $8.6 million to $9.5 million for the three months ended June 30, 2009 compared to income from operations of $0.9 million for the three months ended June 30, 2008 primarily on increased revenue and decreased sales, general and administrative expenses. Loss before income taxes for the three months ended June 30, 2009 was $5.4 million compared to a loss before income taxes of $10.4 million for the three months ended June 30, 2008. The improvement of $5.0 million in 2009 was primarily the result of the improvement in income from operations, partially offset by an increase in other expense.Other Income and Expense. Other income and expense represents interest on our long-term debt, interest on our capital and financing method lease obligations, certain other non-operating charges, and interest income on our invested cash balances. Other income and expense was $14.9 million for the three months ended June 30, 2009, an increase of $3.6 million, or 32%, from $11.3 million for the three months ended June 30, 2008. The $2.7 million increase in interest expense for the three months ended June 30, 2009 was driven by a $0.9 million increase in interest on capital leases and the Cisco loan, $1.1 million of interest on the Lombard loan, and a $0.5 million decrease in capitalized interest. Interest income decreased $0.7 million due to lower average interest rates and lower average daily cash balances invested during the three months ended June 30, 2009. Other income and expense decreased $0.2 million due to less favorable impact from currency revaluation of foreign denominated balances, combined with recognition of ineffectiveness on our interest rate swap during the three months ended June 30, 2009. The following table presents a quarterly overview of the components of other income and expense (dollars in thousands):
Revenue increased $25.2 million, or 6%, for the six months ended June 30, 2009 compared to the six months ended June 30, 2008, primarily as a result of a 13% increase in total hosting services, partially offset by declines in network services revenue. Income from operations increased to $25.1 million for the six months ended June 30, 2009 compared to income from operations of $0.4 million for the six months ended June 30, 2008. The increase in income from operations of $24.7 million was due to increases in both revenues and operating efficiencies. Loss before income taxes for the six months ended June 30, 2009 was $4.2 million. Loss before income taxes improved $12.7 million from $16.9 million for the six months ended June 30, 2008.
Cost of Revenue. Cost of revenue was $242.0 million for the six months ended June 30, 2009, an increase of $6.7 million, or 3%, from $235.3 million for the six months ended June 30, 2008. This increase was primarily driven by an expanded cost base to support revenue growth, including $9.7 million in rent and utilities on new data centers, which included $0.7 million of costs to exit a network facility, and $1.0 million in real estate taxes, partially offset by a $4.0 million decrease in customer related costs. Cost of revenue, as a percentage of revenue, was 55% for the six months ended June 30, 2009 compared to 57% for the six months ended June 30, 2008.
Other Income and Expense. Other income and expense was $29.4 million for the six months ended June 30, 2009, an increase of $12.0 million, or 69%, from $17.4 million for the six months ended June 30, 2008. The $5.6 million increase in interest expense for the three months ended June 30, 2009 was driven by a $2.2 million increase in interest on capital leases and the Cisco loan, $2.0 million of interest on the Lombard loan, and a $0.8 million decrease in capitalized interest. Interest income decreased $2.2 million due to lower average interest rates and lower average daily cash balances invested during the six months ended June 30, 2009. Other income and expense decreased $4.2 million due to less favorable impact from currency revaluation of foreign denominated balances, combined with the recognition of ineffectiveness on our interest rate swap during the six months ended June 30, 2009. The following table presents a year-to-date overview of the components of other income and expense (dollars in thousands):
As of June 30, 2009, our cash and cash equivalents balance was $154.9 million. We generated $84.0 million in net cash provided by operating activities during the six months ended June 30, 2009, an increase of $30.6 million from net cash provided by operating activities of $53.4 million for the six months ended June 30, 2008. This change was primarily due to overall improvements in our operating results, largely resulting from continued operational efficiencies and cost-savings initiatives. Net cash used in investing activities for the six months ended June 30, 2009 was $45.5 million, a decrease of $94.9 million from net cash used in investing activities of $140.4 million for the six months ended June 30, 2008. This decrease was driven by a decrease in expansion related capital expenditures during the six months ended June 30, 2009. Net cash used in financing activities for the six months ended June 30, 2009 was $5.0 million, a decrease of $31.2 million from net cash provided by financing activities of $26.2 million for the six months ended June 30, 2008. This decrease primarily relates to $33.3 million in proceeds from the Lombard financing agreement in the six months ended June 30, 2008, compared to $2.9 million in the six months ended June 30, 2009.
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