First Quarter 2016 Financial Summary |
||||||||||||
YoY |
QoQ |
|||||||||||
1Q 2016 |
1Q 2015 |
4Q 2015 |
Growth |
Growth |
||||||||
Revenues: |
||||||||||||
Data center and network services |
$ 50,872 |
$ 54,068 |
$ 53,010 |
-6% |
-4% |
|||||||
Cloud and hosting services |
$ 25,052 |
$ 26,718 |
$ 25,746 |
-6% |
-3% |
|||||||
Total Revenues |
$ 75,924 |
$ 80,786 |
$ 78,756 |
-6% |
-4% |
|||||||
Operating Expenses |
$ 78,125 |
$ 84,905 |
$ 85,509 |
-8% |
-9% |
|||||||
GAAP Net Loss |
$ (9,644) |
$ (10,442) |
$ (11,269) |
8% |
-14% |
|||||||
Normalized Net Loss2 |
$ (6,108) |
$ (8,598) |
$ (7,409) |
29% |
-18% |
|||||||
Segment Profit1 |
$ 44,847 |
$ 47,440 |
$ 47,322 |
-5% |
-5% |
|||||||
Segment Profit Margin |
59.1% |
58.7% |
60.1% |
40 BPS |
-100 BPS |
|||||||
Adjusted EBITDA |
$ 20,476 |
$ 17,918 |
$ 22,810 |
14% |
-10% |
|||||||
Adjusted EBITDA Margin |
27.0% |
22.2% |
29.0% |
480 BPS |
-200 BPS |
|||||||
Revenue
Net Loss
Segment Profit and Adjusted EBITDA
Balance Sheet and Cash Flow Statement
Business Outlook
We are reaffirming the following guidance for full-year 2016:
Recent Operational Highlights
Historical trends of key financial and operational metrics can be found in a supplementary data schedule on Internap's website at http://ir.internap.com/results.cfm.
1 |
Segment margin and segment profit are non-GAAP financial measures which we define in an attachment to this press release entitled "Non-GAAP (Adjusted) Financial Measures." Reconciliations between GAAP and non-GAAP information related to segment profit and segment margin are contained in the table entitled "Segment Profit and Segment Margin" in the attachment. |
2 |
Adjusted EBITDA, adjusted EBITDA margin and normalized net loss are non-GAAP financial measures which we define in an attachment to this press release entitled "Non-GAAP (Adjusted) Financial Measures." Reconciliations between GAAP information and non-GAAP information related to adjusted EBITDA and normalized net loss are contained in the tables entitled "Reconciliation of Loss from Operations to Adjusted EBITDA," and "Reconciliation of Net Loss and Basic and Diluted Net Loss Per Share to Normalized Net Loss and Basic and Diluted Normalized Net Loss Per Share" in the attachment. |
3 |
Levered free cash flow is a non-GAAP measure which we define in an attachment to this press release entitled "Non-GAAP (Adjusted) Financial Measures." Reconciliations between GAAP and non-GAAP information related to levered free cash flow is contained in the table entitled "Levered Free Cash Flow" in the attachment. |
4 |
Cash operating expense is a non-GAAP measure which we define in an attachment to this press release entitled "Non-GAAP (Adjusted) Financial Measures." Reconciliations between GAAP and non-GAAP information related to cash operating expense is contained in the table entitled "Cash Operating Expense" in the attachment. |
Conference Call Information:
Internap's first quarter 2016 conference call will be held today at 5:00 p.m. ET. Listeners may connect to a webcast of the call, which will include accompanying presentation slides, on the investor relations section of Internap's web site at http://ir.internap.com/events.cfm. The call can be also accessed by dialing 866-515-9839. International callers should dial 631-813-4875. An online archive of the webcast presentation will be available for one month following the call. An audio-only replay will be accessible from Thursday, May 5, 2016 at 8:00 p.m. ET through Wednesday, May 11, 2016 at 855-859-2056 using replay code 91208532. International callers can listen to the archived event at 404-537-3406 with the same code.
About Internap
Internap is the high-performance Internet infrastructure provider that powers the applications shaping the way we live, work and play. Our hybrid infrastructure delivers performance without compromise – blending virtual and bare-metal cloud, hosting and colocation services across a global network of data centers, optimized from the application to the end user and backed by rock-solid customer support and a 100% uptime guarantee. Since 1996, the most innovative companies have relied on Internap to make their applications faster and more scalable. For more information, visitwww.internap.com.
Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements include statements related to (a) our expectations for the benefits to be achieved from the establishment of two distinct business units, including customer service improvements and our ability to grow faster; (b) our expectations for customer churn; (c) our ability to accelerate profitable growth and drive long-term shareholder value; and (d) our expectations for full-year 2016 revenue, adjusted EBITDA and capital expenditures. Our ability to achieve these forward-looking statements is based on certain assumptions, including our ability to execute on our business strategy, leveraging of multiple routes to market, expanded brand awareness for high-performance Internet infrastructure services and customer churn levels. These assumptions may prove to be inaccurate in the future. Because such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, there are important factors that could cause Internap's actual results to differ materially from those in the forward-looking statements. These factors include our ability to execute on our business strategy and drive growth; our ability to maintain current customers and obtain new ones, whether in a cost-effective manner or at all; the robustness of the IT infrastructure services market; our ability to achieve or sustain profitability; our ability to expand margins and drive higher returns on investment; our ability to sell into new and existing data center space; the actual performance of our IT infrastructure services; our ability to correctly forecast capital needs, demand planning and space utilization; our ability to respond successfully to technological change and the resulting competition; the availability of services from Internet network service providers or network service providers providing network access loops and local loops on favorable terms, or at all; failure of third party suppliers to deliver their products and services on favorable terms, or at all; failures in our network operations centers, data centers, network access points or computer systems; our ability to provide or improve Internet infrastructure services to our customers; and our ability to protect our intellectual property, as well as other factors discussed in our filings with the Securities and Exchange Commission. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. We undertake no obligation to update, amend or clarify any forward-looking statement for any reason.
Press Contact: |
Investor Contact: |
Mariah Torpey |
Michael Nelson |
(781) 418-2404 |
(404) 302-9700 |
This email address is being protected from spambots. You need JavaScript enabled to view it. |
This email address is being protected from spambots. You need JavaScript enabled to view it. |
INTERNAP CORPORATION |
||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||
(In thousands, except per share amounts) |
||||
Three Months Ended March 31, |
||||
2016 |
2015 |
|||
Revenues: |
||||
Data center and network services |
$ 50,872 |
$ 54,068 |
||
Cloud and hosting services |
25,052 |
26,718 |
||
Total revenues |
75,924 |
80,786 |
||
Operating costs and expenses: |
||||
Direct costs of sales and services, exclusive of depreciation |
||||
Data center and network services |
24,373 |
26,481 |
||
Cloud and hosting services |
6,704 |
6,865 |
||
Direct costs of customer support |
8,804 |
9,118 |
||
Sales, general and administrative |
18,930 |
21,968 |
||
Depreciation and amortization |
19,113 |
20,208 |
||
Exit activities, restructuring and impairments |
201 |
265 |
||
Total operating costs and expenses |
78,125 |
84,905 |
||
Loss from operations |
(2,201) |
(4,119) |
||
Non-operating expenses: |
||||
Interest expense |
6,985 |
6,865 |
||
Loss (gain) on foreign currency, net |
433 |
(514) |
||
Other, net |
(77) |
(16) |
||
Total non-operating expenses |
7,341 |
6,335 |
||
Loss before income taxes and equity in earnings of equity-method investment |
(9,542) |
(10,454) |
||
Provision for income taxes |
138 |
27 |
||
Equity in earnings of equity-method investment, net of taxes |
(36) |
(39) |
||
Net loss |
$ (9,644) |
$ (10,442) |
||
Basic and diluted net loss per share |
$ (0.19) |
$ (0.20) |
||
Weighted average shares outstanding used in computing net loss per share: |
||||
Basic and diluted |
51,774 |
51,336 |
INTERNAP CORPORATION |
||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||
(In thousands, except par value amounts) |
||||
March 31, |
December 31, |
|||
2016 |
2015 |
|||
ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 13,898 |
$ 17,772 |
||
Accounts receivable, net of allowance for doubtful accounts of $1,514 and $1,751, respectively |
19,570 |
20,292 |
||
Prepaid expenses and other assets |
12,410 |
12,405 |
||
Total current assets |
45,878 |
50,469 |
||
Property and equipment, net |
328,084 |
328,700 |
||
Investment in joint venture |
2,934 |
2,768 |
||
Intangible assets, net |
32,047 |
32,887 |
||
Goodwill |
130,313 |
130,313 |
||
Deposits and other assets |
9,094 |
9,474 |
||
Total assets |
$ 548,350 |
$ 554,611 |
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
Current liabilities: |
||||
Accounts payable |
$ 21,672 |
$ 22,607 |
||
Accrued liabilities |
10,525 |
10,737 |
||
Deferred revenues |
6,784 |
6,603 |
||
Capital lease obligations |
9,290 |
8,421 |
||
Term loan, less discount of $1,806 and $1,784, respectively |
1,194 |
1,215 |
||
Exit activities and restructuring liability |
1,712 |
2,034 |
||
Other current liabilities |
1,631 |
2,566 |
||
Total current liabilities |
52,808 |
54,183 |
||
Deferred revenues |
4,798 |
4,759 |
||
Capital lease obligations |
50,007 |
48,692 |
||
Revolving credit facility |
32,500 |
31,000 |
||
Term loan, less discount of $5,243 and $5,703 respectively |
285,007 |
285,298 |
||
Exit activities and restructuring liability |
1,709 |
1,844 |
||
Deferred rent |
8,395 |
8,879 |
||
Deferred tax liability |
1,211 |
880 |
||
Other long-term liabilities |
4,467 |
4,640 |
||
Total liabilities |
440,902 |
440,175 |
||
Commitments and contingencies |
||||
Stockholders' equity: |
||||
Preferred stock, $0.001 par value; 20,000 shares authorized; no shares issued |
||||
or outstanding |
- |
- |
||
Common stock, $0.001 par value; 120,000 shares authorized; 56,351 and 55,971 shares |
||||
outstanding, respectively |
56 |
56 |
||
Additional paid-in capital |
1,279,490 |
1,277,511 |
||
Treasury stock, at cost; 908 and 826 shares, respectively |
(6,609) |
(6,393) |
||
Accumulated deficit |
(1,163,601) |
(1,153,957) |
||
Accumulated items of other comprehensive loss |
(1,888) |
(2,781) |
||
Total stockholders' equity |
107,448 |
114,436 |
||
Total liabilities and stockholders' equity |
$ 548,350 |
$ 554,611 |
||
INTERNAP CORPORATION |
||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||
(In thousands) |
||||||
Three Months Ended March 31, |
||||||
2016 |
2015 |
|||||
Cash Flows from Operating Activities: |
||||||
Net loss |
$ (9,644) |
$ (10,442) |
||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||
Depreciation and amortization |
19,113 |
20,208 |
||||
Amortization of debt discount and issuance costs |
522 |
490 |
||||
Stock-based compensation expense, net of capitalized amount |
1,922 |
1,579 |
||||
Equity in earnings of equity-method investment |
(36) |
(39) |
||||
Provision for doubtful accounts |
341 |
400 |
||||
Non-cash change in capital lease obligations |
487 |
(760) |
||||
Non-cash change in exit activities and restructuring liability |
347 |
371 |
||||
Non-cash change in deferred rent |
(484) |
(401) |
||||
Deferred taxes |
77 |
54 |
||||
Other, net |
202 |
(242) |
||||
Changes in operating assets and liabilities: |
||||||
Accounts receivable |
537 |
(1,724) |
||||
Prepaid expenses, deposits and other assets |
1,946 |
(1,544) |
||||
Accounts payable |
(1,815) |
(7,652) |
||||
Accrued and other liabilities |
(1,903) |
(903) |
||||
Deferred revenues |
191 |
(256) |
||||
Exit activities and restructuring liability |
(804) |
(663) |
||||
Asset retirement obligation |
(174) |
- |
||||
Other liabilities |
(43) |
17 |
||||
Net cash flows provided by (used in) operating activities |
10,782 |
(1,507) |
||||
Cash Flows from Investing Activities: |
||||||
Purchases of property and equipment |
(12,282) |
(14,990) |
||||
Additions to acquired and developed technology |
(399) |
(712) |
||||
Net cash flows used in investing activities |
(12,681) |
(15,702) |
||||
Cash Flows from Financing Activities: |
||||||
Proceeds from credit agreements |
1,500 |
13,000 |
||||
Principal payments on credit agreements |
(750) |
(750) |
||||
Payments on capital lease obligations |
(2,359) |
(1,770) |
||||
Proceeds from exercise of stock options |
- |
2,583 |
||||
Acquisition of common stock for income tax withholdings |
(216) |
(618) |
||||
Other, net |
(76) |
979 |
||||
Net cash flows (used in) provided by financing activities |
(1,901) |
13,424 |
||||
Effect of exchange rates on cash and cash equivalents |
(74) |
(80) |
||||
Net decrease in cash and cash equivalents |
(3,874) |
(3,865) |
||||
Cash and cash equivalents at beginning of period |
17,772 |
20,084 |
||||
Cash and cash equivalents at end of period |
$ 13,898 |
$ 16,219 |
||||
INTERNAP CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES
In addition to providing financial measurements based on accounting principles generally accepted in the United States of America ("GAAP"), Internap has historically provided additional financial measures that are not prepared in accordance with GAAP ("non-GAAP"), including adjusted EBITDA and adjusted EBITDA margin, normalized net loss, normalized diluted shares outstanding, segment profit and segment margin, levered free cash flow and cash operating expense. The most directly comparable GAAP equivalent to adjusted EBITDA and normalized net loss is loss from operations and net loss, respectively. The most directly comparable GAAP equivalent to normalized diluted shares outstanding is diluted common shares outstanding.
We define non-GAAP measures as follows:
We detail reconciliations of our non-GAAP financial measures to the most directly comparable financial measure in the reconciliations of GAAP to non-GAAP measures below. We believe that presentation of these non-GAAP financial measures provides useful information to investors regarding our results of operations.
We believe that excluding depreciation and amortization and loss on disposals of property and equipment, as well as impairments and restructuring, to calculate adjusted EBITDA provides supplemental information and an alternative presentation that is useful to investors' understanding of our core operating results and trends. Not only are depreciation and amortization expenses based on historical costs of assets that may have little bearing on present or future replacement costs, but also they are based on management estimates of remaining useful lives. Loss on disposals of property and equipment is also based on historical costs of assets that may have little bearing on replacement costs. Impairments and restructuring expenses primarily reflect goodwill impairments and subsequent plan adjustments in sublease income assumptions for certain properties included in our previously disclosed restructuring plans.
We believe that exit activities, restructuring and impairment charges, strategic alternatives and related costs and organizational realignment costs are unique costs that we do not expect to recur on a regular basis, and consequently, we do not consider these charges as a normal component of expenses related to current and ongoing operations.
Similarly, we believe that excluding the effects of stock-based compensation from non-GAAP financial measures provides supplemental information and an alternative presentation useful to investors' understanding of our core operating results and trends. Investors have indicated that they consider financial measures of our results of operations excluding stock-based compensation as important supplemental information useful to their understanding of our historical results and estimating our future results.
INTERNAP CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES (Continued)
We also believe that, in excluding the effects of stock-based compensation, our non-GAAP financial measures provide investors with transparency into what management uses to measure and forecast our results of operations, to compare on a consistent basis our results of operations for the current period to that of prior periods and to compare our results of operations on a more consistent basis against that of other companies, in making financial and operating decisions and to establish certain management compensation.
Stock-based compensation is an important part of total compensation, especially from the perspective of employees. We believe, however, that supplementing GAAP net loss and net loss per share information by providing normalized net loss and normalized net loss per share, excluding the effect of exit activities, restructuring and impairments, stock-based compensation and acquisition costs in all periods, is useful to investors because it enables additional and more meaningful period-to-period comparisons. We consider normalized diluted shares to be another important indicator of our overall performance because it eliminates the effect of non-cash items.
Adjusted EBITDA is not a measure of liquidity calculated in accordance with GAAP, and should be viewed as a supplement to — not a substitute for — our results of operations presented on the basis of GAAP. Adjusted EBITDA does not purport to represent cash flow provided by operating activities as defined by GAAP. Our statements of cash flows present our cash flow activity in accordance with GAAP. Furthermore, adjusted EBITDA is not necessarily comparable to similarly-titled measures reported by other companies.
We believe adjusted EBITDA is used by and is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We believe that:
Our management uses adjusted EBITDA:
Our presentation of segment profit and segment margin excludes direct costs of customer support and depreciation and amortization in order to allow investors to see the business through the eyes of management. Management views direct costs of network, sales and services as generally less controllable, external costs and management regularly monitors the margin of revenues in excess of these direct costs. Similarly, we view the costs of customer support to also be an important component of costs of revenues but believe that the costs of customer support to be more within our control and to some degree discretionary as we can adjust those costs by hiring and terminating employees.
Segment margin is an important metric to our investors and analysts, as we have regularly discussed and disclosed the effects of third party vendors' pricing declines and the corresponding effect on our revenues. The presentation of segment margin highlights the impact of the pricing declines and allows investors and analysts to evaluate our revenue generation performance relative to direct costs of network, sales and services. Conversely, we have much greater latitude in controlling the compensation component of costs of revenues, represented by customer support, and we analyze this component separately from the direct external costs.
We also have excluded depreciation and amortization from segment profit and segment margin because, as noted above, they are based on estimated useful lives of tangible and intangible assets. Further, depreciation and amortization are based on historical costs incurred to build out our deployed network and the historical costs of these assets may not be indicative of current or future capital expenditures.
INTERNAP CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES (Continued)
Although we believe, for the foregoing reasons, that our presentation of non-GAAP financial measures provides useful supplemental information to investors regarding our results of operations, our non-GAAP financial measures should only be considered in addition to, and not as a substitute for, or superior to, any measure of financial performance prepared in accordance with GAAP.
Use of non-GAAP financial measures is subject to inherent limitations because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment of which charges should properly be excluded from the non-GAAP financial measure. Management accounts for these limitations by not relying exclusively on non-GAAP financial measures, but only using such information to supplement GAAP financial measures. Our non-GAAP financial measures may not be the same non-GAAP measures, and may not be calculated in the same manner, as those used by other companies.
RECONCILIATION OF LOSS FROM OPERATIONS TO ADJUSTED EBITDA |
|||||
A reconciliation of loss from operations, the most directly comparable GAAP measure, to adjusted EBITDA for each of the periods indicated is as follows (in thousands): |
|||||
Three Months Ended |
|||||
March 31, 2016 |
December 31, 2015 |
March 31, 2015 |
|||
Loss from operations (GAAP) |
$ (2,201) |
$ (6,753) |
$ (4,119) |
||
Depreciation and amortization |
19,113 |
25,250 |
20,208 |
||
Loss (gain) on disposal of property and equipment, net |
28 |
453 |
(15) |
||
Exit activities, restructuring and impairments |
201 |
1,033 |
265 |
||
Stock-based compensation |
1,922 |
2,582 |
1,579 |
||
Strategic alternatives and related costs |
141 |
245 |
- |
||
Organizational realignment costs |
1,272 |
- |
- |
||
Adjusted EBITDA (non-GAAP) |
$ 20,476 |
$ 22,810 |
$ 17,918 |
RECONCILIATION OF NET LOSS AND BASIC AND DILUTED |
|||||
NET LOSS PER SHARE TO NORMALIZED NET LOSS AND |
|||||
BASIC AND DILUTED NORMALIZED NET LOSS PER SHARE |
|||||
Reconciliations of (1) net loss, the most directly comparable GAAP measure, to normalized net loss, (2) diluted shares outstanding used in per share calculations, the most directly comparable GAAP measure, to normalized diluted shares used in normalized per share outstanding calculations and (3) net loss per share, the most directly comparable GAAP measure, to normalized net loss per share for each of the periods indicated is as follows (in thousands, except per share data): |
|||||
Three Months Ended |
|||||
March 31, 2016 |
December 31, 2015 |
March 31, 2015 |
|||
Net loss (GAAP) |
$ (9,644) |
$ (11,269) |
$ (10,442) |
||
Exit activities, restructuring and impairments |
201 |
1,033 |
265 |
||
Stock-based compensation |
1,922 |
2,582 |
1,579 |
||
Strategic alternatives and related costs |
141 |
245 |
- |
||
Organizational realignment costs |
1,272 |
- |
- |
||
Normalized net loss (non-GAAP) |
(6,108) |
(7,409) |
(8,598) |
||
Normalized net income allocable to participating securities (non-GAAP) |
- |
- |
- |
||
Normalized net loss available to common stockholders (non-GAAP) |
$ (6,108) |
$ (7,409) |
$ (8,598) |
||
Participating securities (GAAP) |
1,369 |
1,260 |
1,151 |
||
Weighted average shares outstanding used in per share calculation: |
|||||
Basic and diluted (GAAP) |
51,774 |
51,727 |
51,336 |
||
Add potentially dilutive securities |
- |
- |
- |
||
Less dilutive effect of stock-based compensation under the treasury stock method |
- |
- |
- |
||
Normalized diluted shares (non-GAAP) |
51,774 |
51,727 |
51,336 |
||
Loss per share (GAAP): |
|||||
Basic and diluted |
$ (0.19) |
$ (0.22) |
$ (0.20) |
||
Normalized net loss per share (non-GAAP): |
|||||
Basic and diluted |
$ (0.12) |
$ (0.14) |
$ (0.17) |
INTERNAP CORPORATION |
|||||
NON-GAAP (ADJUSTED) FINANCIAL MEASURES (Continued) |
|||||
INTERNAP CORPORATION |
|||||
SEGMENT PROFIT AND SEGMENT MARGIN |
|||||
Segment profit and segment margin, which does not include direct costs of customer support or any depreciation or amortization, for each of the periods indicated is as follows (dollars in thousands): |
|||||
Three Months Ended |
|||||
March 31, 2016 |
December 31, 2015 |
March 31, 2015 |
|||
Revenues: |
|||||
Data center and network services: |
|||||
Company-controlled |
$ 22,357 |
$ 23,310 |
$ 21,230 |
||
Partner |
9,938 |
9,955 |
11,151 |
||
IP connectivity |
18,577 |
19,745 |
21,687 |
||
Total data center and network services |
50,872 |
53,010 |
54,068 |
||
Cloud and hosting services |
25,052 |
25,746 |
26,718 |
||
Total |
75,924 |
78,756 |
80,786 |
||
Direct cost of sales and services, exclusive of |
|||||
depreciation and amortization: |
|||||
Data center and network services: |
|||||
Company-controlled |
9,712 |
9,728 |
9,628 |
||
Partner |
7,172 |
7,280 |
7,772 |
||
IP connectivity |
7,489 |
7,760 |
9,081 |
||
Total data center and network services |
24,373 |
24,768 |
26,481 |
||
Cloud and hosting services |
6,704 |
6,666 |
6,865 |
||
Total |
31,077 |
31,434 |
33,346 |
||
Segment Profit: |
|||||
Data center and network services |
|||||
Company-controlled |
12,645 |
13,582 |
11,602 |
||
Partner |
2,766 |
2,675 |
3,379 |
||
IP connectivity |
11,088 |
11,985 |
12,606 |
||
Total data center and network services |
26,499 |
28,242 |
27,587 |
||
Cloud and hosting services |
18,348 |
19,080 |
19,853 |
||
Total |
$ 44,847 |
$ 47,322 |
$ 47,440 |
||
Segment Margin: |
|||||
Data center and network services |
|||||
Company-controlled |
56.6% |
58.3% |
54.6% |
||
Partner |
27.8% |
26.9% |
30.3% |
||
IP connectivity |
59.7% |
60.7% |
58.1% |
||
Total data center and network services |
52.1% |
53.3% |
51.0% |
||
Cloud and hosting services |
73.2% |
74.1% |
74.3% |
||
Total |
59.1% |
60.1% |
58.7% |
||
INTERNAP CORPORATION |
|||||
NON-GAAP (ADJUSTED) FINANCIAL MEASURES (Continued) |
|||||
LEVERED FREE CASH FLOW |
|||||
Levered free cash flow is a non-GAAP measure and is adjusted EBITDA less capital expenditures, net of equipment sale-leaseback transactions and cash paid for interest (in thousands): |
|||||
Three Months Ended |
|||||
March 31, 2016 |
December 31, 2015 |
March 31, 2015 |
|||
Adjusted EBITDA (non-GAAP) |
$ 20,476 |
$ 22,810 |
$ 17,918 |
||
Capital expenditures, net of equipment sale-leaseback transactions |
(12,681) |
(14,738) |
(15,702) |
||
Unlevered free cash flow (non-GAAP) |
7,795 |
8,072 |
2,216 |
||
Cash interest expense |
(6,540) |
(6,715) |
(6,450) |
||
Levered free cash flow (non-GAAP) |
$ 1,255 |
$ 1,357 |
$ (4,234) |
CASH OPERATING EXPENSE |
|||||
Cash operating expense is a non-GAAP measure and is operating expense defined by GAAP, less direct costs of sales and services, depreciation and amortization, (loss) gain on disposal of property and equipment, exit activities, restructuring and impairments, stock-based compensation, acquisition costs and strategic alternatives and related costs (in thousands): |
|||||
Three Months Ended |
|||||
March 31, 2016 |
December 31, 2015 |
March 31, 2015 |
|||
Total operating costs and expenses |
$ 78,125 |
$ 85,509 |
$ 84,905 |
||
Direct costs of sales and services, exclusive of depreciation and amortization |
(31,077) |
(31,434) |
(33,346) |
||
Depreciation and amortization |
(19,113) |
(25,250) |
(20,208) |
||
(Loss) gain on disposal of property and equipment, net |
(28) |
(453) |
15 |
||
Exit activities, restructuring and impairments |
(201) |
(1,033) |
(265) |
||
Stock-based compensation |
(1,922) |
(2,582) |
(1,579) |
||
Strategic alternatives and related costs |
(141) |
(245) |
- |
||
Organizational realignment costs |
(1,272) |
- |
- |
||
Cash operating expense (non-GAAP) |
$ 24,371 |
$ 24,512 |
$ 29,522 |