Savvis Reports Second Quarter 2010 Results


    
    Quarter-on-Quarter Revenue Results Show Improvement




    
</pre>
<p><span class="xn-location">ST. LOUIS</span>, <span class="xn-chron">July 26</span> /CNW/ -- Savvis, Inc. (Nasdaq:   SVVS), a global leader in cloud infrastructure and hosted IT solutions for enterprises, today reported its second quarter 2010 financial results, with revenue of <span class="xn-money">$221.8 million</span>, compared to <span class="xn-money">$219.9 million</span> in the second quarter of 2009.  Adjusted EBITDA* was <span class="xn-money">$54.7 million</span>, excluding <span class="xn-money">$3.5 million</span> of Fusepoint acquisition and integration costs, compared to <span class="xn-money">$55.1 million</span> of adjusted EBITDA in the second quarter of 2009.</p>
<p/>
<p>Income from continuing operations for the second quarter of 2010 was <span class="xn-money">$2.6 million</span>, compared to <span class="xn-money">$9.5 million</span> in the second quarter of 2009.  The company reported a net loss of (<span class="xn-money">$13.2</span>) million, or (<span class="xn-money">$0.24</span>) per share, in the second quarter of 2010, compared to a second quarter 2009 net loss of (<span class="xn-money">$6.2</span>) million, or (<span class="xn-money">$0.12</span>) per share.  Leveraged free cash flow* in the second quarter of 2010 was (<span class="xn-money">$13.2</span>) million, down from <span class="xn-money">$15.3 million</span> in the second quarter of 2009.</p>
<p/>
<p>"Once again, Savvis outperformed internal plans for revenue, bookings, installs, churn and renewals," said <span class="xn-person">Jim Ousley</span>, chairman and chief executive officer for Savvis.  "The organic growth we are seeing - in combination with our strategic acquisition of Fusepoint - has left us poised to exit the year at double digit growth run rates for both revenue and adjusted EBITDA.  We look forward to building on our successive quarterly strength, as we continue implementing our new programs and process improvements and benefiting from our efforts."</p>
<p/>
<p> </p>
<p>Second Quarter Financial Results</p>
<p> </p>
<pre>
    
    US dollars in millions                          Three months ended
                                              6/30/10  3/31/10      6/30/09
    Hosting                                    $158.2   $152.8       $152.2
    Network                                     $63.6    $63.8        $67.7
      Total revenue                            $221.8   $216.6       $219.9
    
</pre>
<p> </p>
<pre>
    
    Cost of revenue(1)                         $120.2   $119.4       $121.4
    SG&A expenses(1)                            $56.9    $51.7        $51.1
    Non-cash, equity-based compensation(1)       $6.5     $8.5         $7.8
    Income from continuing operations            $2.6     $4.8         $9.5
    Net income (loss) from continuing
     operations                                ($13.1) ($11.3)        ($6.2)
    Income (loss) from discontinued
     operations, net of income tax(2)          ($0.05)      --           --
    Net income (loss)                          ($13.2) ($11.3)        ($6.2)
    
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<p> </p>
<pre>
    
    Adjusted EBITDA                             $54.7    $54.0        $55.1
    Adjusted EBITDA margin                         25%      25%          25%
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    The Fusepoint acquisition was completed on June 16, 2010.  (1) Both
    cost of revenue and SG&A expenses exclude depreciation, amortization
    and accretion and include non-cash, equity-based compensation.
    Total non-cash, equity-based compensation attributed to cost of
    revenue for the three months ended June 30, 2010, March 31, 2010,
    and June 30, 2009, was $1.5 million, $1.6 million and $1.5 million
    and to SG&A expenses was $5.1 million, $6.8 million and $6.3
    million, respectively.  (2) Includes a ($49,000) loss from the
    application services business acquired from Fusepoint, which has
    been classified as an asset held for sale, as of June 30, 2010.



    Second Quarter Overview
    
</pre>
<p>Total Savvis revenue for the second quarter was <span class="xn-money">$221.8 million</span>, up 2% compared to first quarter 2010 revenue of <span class="xn-money">$216.6 million</span>.  Excluding revenue from the Fusepoint acquisition, revenue for the second quarter was <span class="xn-money">$220.3 million</span>, up 2% compared to the first quarter of 2010.</p>
<p/>
<p>Adjusted EBITDA was <span class="xn-money">$54.7 million</span> for the second quarter of 2010, up 1% compared to <span class="xn-money">$54.0 million</span> of adjusted EBITDA recorded in the first quarter of 2010.    As expected, the company increased its sales and marketing spend, as it continued to ramp up its efforts in this area.</p>
<p/>
<p>For the second quarter of 2010, income from continuing operations of <span class="xn-money">$2.6 million</span> was down when compared to the <span class="xn-money">$4.8 million</span> recorded in the first quarter of 2010.  A net loss from continuing operations of (<span class="xn-money">$13.1</span>) million was recorded in the second quarter of 2010, compared to a net loss of (<span class="xn-money">$11.3</span>) million in the first quarter of 2010.  Savvis recorded a loss per share of (<span class="xn-money">$0.24</span>) in the second quarter of 2010, compared to a loss per share of (<span class="xn-money">$0.21</span>) in the first quarter of 2010.  For the second quarter, leveraged free cash flow was (<span class="xn-money">$13.2</span>) million, down from (<span class="xn-money">$4.5</span>) million in the first quarter of 2010.</p>
<p/>
<p> </p>
<p>Hosting</p>
<p> </p>
<pre>
    
    US dollars in millions                Three months ended
                                      6/30/10   3/31/10  6/30/09
    Colocation                          $84.3     $82.5    $84.9
    Managed Services                    $73.9     $70.3    $67.3
       Total Hosting revenue           $158.2    $152.8   $152.2
    Percentage change                                 4%       4%


    
</pre>
<p>Overall Hosting revenue was <span class="xn-money">$158.2 million</span> in the second quarter, up 4% on a quarter-over-quarter basis.  On a year-over-year basis, Hosting revenue was up 4%.  Excluding revenue from the Fusepoint acquisition, overall Hosting revenue was <span class="xn-money">$156.8 million</span> in the second quarter, up 3% on a year-over-year basis and up 3% on a quarter-over-quarter basis.</p>
<p/>
<p>For the quarter, Managed Services contributed <span class="xn-money">$73.9 million</span> to overall Hosting revenue, or 47%.  Managed Services revenue was up 5% on a quarterly basis and year-over-year it was up 10%.  Excluding revenue from the Fusepoint acquisition, Managed Services revenue was <span class="xn-money">$73.2 million</span> in the second quarter, up 4% on a quarter-over-quarter basis and up 9% on a year-over-year basis.  The growth in revenue reflects client interest in both standard managed services and cloud services.  For the second quarter of 2010, cloud revenue was up 24% on a quarter-over-quarter basis and up 129% year-over-year.</p>
<p/>
<p>Colocation contributed <span class="xn-money">$84.3 million</span> to overall Hosting revenue in the quarter, or 53%.  Quarter-over-quarter, Colocation revenue was up 2%.  On a year-over-year basis, Colocation revenue was roughly flat.  Excluding revenue from the Fusepoint acquisition, Colocation revenue was <span class="xn-money">$83.6 million</span> in the second quarter, up 1% on a quarter-over-quarter basis and down (2%) on a year-over-year basis.  The company is experiencing strong trends in colocation bookings, with increased interest from financial and cloud related clients.</p>
<p/>
<p> </p>
<p>Network</p>
<p> </p>
<pre>
    
    US dollars in millions                Three months ended
                                       6/30/10   3/31/10   6/30/09
    Core                                 $33.5     $31.7     $26.9
    Sustaining                           $30.1     $32.2     $40.8
       Total Network revenue             $63.6     $63.8     $67.7
    Percentage change                                 --       (6%)


    
</pre>
<p>Overall Network revenue was <span class="xn-money">$63.6 million</span> in the second quarter and was flat on a quarterly basis.  On an annual basis, Network revenue was down (6%).  As of the second quarter, Core Network revenue surpassed Sustaining Network revenue, as the Core Network continued to grow while the Sustaining Network decline continued to slow.  The Network business has continued to stabilize, as the company has refocused its efforts in this area, and it should begin to show overall growth by the end of 2010.  The Network has also benefited from increased client interest in converged cloud.</p>
<p/>
<p>For the quarter, Core Network contributed <span class="xn-money">$33.5 million</span> to overall Network revenue.  Core Network revenue was up 6% on a quarter-over-quarter basis and was up 24% on a year-over-year basis.  Sustaining Network contributed <span class="xn-money">$30.1 million</span> to overall Network revenue in the quarter.  Quarter-over-quarter, Sustaining Network revenue was down (6%).  On a year-over-year basis, Sustaining Network revenue declined (26%).</p>
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    Highlights
    
</pre>
<p>The Financial Vertical represented 27% of total revenue, or <span class="xn-money">$60.4 million</span>, in the second quarter of 2010.  Revenue in the quarter was up 9% compared to the first quarter of 2010 and was flat compared to the second quarter of 2009.</p>
<p/>
<p>During the second quarter, the company announced the addition of Barclays Capital's dark liquidity crossing network and UBS Investment Bank's Alternative Trading System to its financial vertical ecosystem, in addition to many other new financial vertical clients.</p>
<p/>
<p>Savvis continues to lead in the Financial Vertical, by functioning as a vital component of the fabric that interconnects the financial industry.  In addition, the company remains well-positioned in this area, with infrastructure resources in the key financial markets, such as New York, <span class="xn-location">Chicago</span>, <span class="xn-location">Toronto</span>, <span class="xn-location">London</span>, <span class="xn-location">Frankfurt</span>, <span class="xn-location">Tokyo</span>, <span class="xn-location">Hong Kong</span> and <span class="xn-location">Singapore</span>.</p>
<p/>
<p>In June, Savvis announced that its Savvis Symphony Virtual Private Data Center (VPDC) had successfully transitioned from beta to general availability.  VPDC is one of the industry's first enterprise-class virtual private data center solutions, with multi-tiered security, service and network profiles.</p>
<p/>
<p>Savvis Symphony is the centerpiece of a converged cloud solution that blends cloud with traditional infrastructure services such as colocation and managed services.  This unique combination, coupled with Savvis' Tier1 network and global data center footprint, enables enterprises to have a consistent, secure, low-latency solution anywhere in the world.</p>
<pre>
    

    Cash Flow and Balance Sheet
    
</pre>
<p>Net cash provided by operating activities was <span class="xn-money">$32.3 million</span> in the second quarter of 2010, compared to <span class="xn-money">$38.4 million</span> in the second quarter of 2009.  Cash capital expenditures for the second quarter of 2010 totaled <span class="xn-money">$51.5 million</span>.</p>
<p/>
<p>The company's cash position at <span class="xn-chron">June 30, 2010</span>, was <span class="xn-money">$118.7 million</span>, compared to <span class="xn-money">$145.9 million</span> at <span class="xn-chron">March 31, 2010</span>.  As of <span class="xn-chron">June 30, 2010</span>, the long-term debt and capital leases for Savvis (net of current portion) totaled <span class="xn-money">$712.8 million</span>, up from <span class="xn-money">$595.8 million</span> as of <span class="xn-chron">March 31, 2010</span>.</p>
<p/>
<p>The company's debt position increased during the second quarter of 2010, as the company borrowed <span class="xn-money">$110.0 million</span> on its revolving credit facility to fund the acquisition of Fusepoint.  As part of the acquisition, Savvis added <span class="xn-money">$9.3 million</span> of capital leases.</p>
<pre>
    

    Financial Outlook
    
</pre>
<p>"In addition to a 2% quarterly increase in revenue, we saw a slight quarterly increase in adjusted EBITDA, excluding Fusepoint acquisition and integration costs of <span class="xn-money">$3.5 million</span>.  This improvement was despite our expected investment in cloud sales and marketing spend, performance driven sales and support costs, and an increase in commissions related to new business," said <span class="xn-person">Greg Freiberg</span>, chief financial officer for Savvis.  "Thanks to our continued strong organic growth, we have decided to provide full year 2010 revenue guidance of <span class="xn-money">$912 to $927 million</span>, which includes the Fusepoint acquisition."</p>
<p/>
<p>In addition, Savvis now expects the following for full year 2010, which includes the Fusepoint acquisition:</p>
<pre>
    
    --  Adjusted EBITDA of $220 to $240 million, which is an increase from
        previous guidance of $210 to $225 million and does not include the $5
        to $6 million of acquisition and integration costs
    --  Total cash capital expenditures of $190 to $210 million, which is an
        increase from previous guidance of $180 to $200 million and includes
        $50 to $55 million for data center expansion
    --  Cash interest expense (net) of approximately $55 to $60 million, which
        is an increase over previous guidance of $40 to $50 million and is due
        to expected changes in the company's debt structure

    Investor Conference Call
    
</pre>
<p>Savvis will webcast an investor conference call at <span class="xn-chron">10:00 a.m. ET</span> today, <span class="xn-chron">July 26, 2010</span>.  Both the webcast and supporting presentation will be available at savvis.net on the Investor Relations page.  A live conference call will also be available by telephone at (866) 835-8906 for financial analysts in <span class="xn-location">North America</span> or (703) 639-1413 for international analysts.  A replay will be available on the web site for six months.  Investors may also access the replay by telephone through <span class="xn-chron">Saturday, Aug. 7</span>, by dialing (888) 266-2081 in <span class="xn-location">North America</span> or (703) 925-2533 internationally and using the access code 1469201.</p>
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    About Savvis
    
</pre>
<p>Savvis, Inc. (Nasdaq:   SVVS) is a global leader in cloud infrastructure and hosted IT solutions for enterprises. More than 2,500 unique clients, including 30 of the top 100 companies in the Fortune 500, use Savvis to reduce capital expense, improve service levels and harness the latest advances in cloud computing. For more information, please visit savvis.net.</p>
<pre>
    

    Forward-Looking Statements
    
</pre>
<p>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 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 <span class="xn-chron">December 31, 2009</span>, and subsequent filings.  Those risk factors include, but are not limited to, uncertainties in economic conditions, including conditions that could pressure enterprise IT spending; introduction of, demand for and market acceptance of Savvis' products and services; whether or not Savvis is able to sign additional outsourcing deals; variability in pricing for those products and services; merger and acquisition activity by Savvis customers or other customer activity that affects the level of business done with Savvis; rapid evolution of technology; changes in the operating environment; and changes or proposed changes in, or introduction of new, regulatory schemes or environments that impact Savvis and/or its customers' businesses.  The forward-looking statements contained in this document speak only as of the date of publication, <span class="xn-chron">July 26, 2010</span>.  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.</p>
<pre>
    

    * Non-GAAP Measures
    
</pre>
<p>Savvis includes information pertaining to certain non-GAAP measures in conjunction with reporting of its quarterly and year-end financial results.  "Adjusted EBITDA" represents income from continuing operations before depreciation, amortization and accretion, and non-cash, equity-based compensation and excludes acquisition and integration costs.  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.  "Leveraged free cash flow" represents adjusted EBITDA less cash paid acquisition and integration costs, less cash capital expenditures and less cash interest, net.  We have included information concerning leveraged free cash flow because we believe that in our industry such information is a relevant measurement of a company's operating financial performance and liquidity.  We do not provide forward looking guidance for certain financial data, such as income from operations, depreciation, amortization and accretion, non-cash, equity-based compensation, and interest income.  As a result, we are unable to provide a reconciliation of non-GAAP measures, such as adjusted EBITDA and leveraged free cash flow for forward looking data, including 2010 full-year guidance.  The calculations of adjusted EBITDA and leveraged free cash flow are not specified by <span class="xn-location">United States</span> generally accepted accounting principles.  Our calculations of adjusted EBITDA and leveraged free cash flow may not be comparable to similarly-titled measures of other companies.</p>
<pre>
    



    
</pre>
<p> </p>
<pre>
    
                              SAVVIS, Inc. and Subsidiaries
                Unaudited Condensed Consolidated Statements of Operations
                          (in thousands, except per share data)
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                            Three Months Ended             Six Months Ended
                                 June 30,                      June 30,
                                 --------                      --------
                              2010          2009           2010          2009
                              ----          ----           ----          ----
    
</pre>
<p> </p>
<pre>
    
    Revenue               $221,756      $219,861       $438,343      $441,384
    Operating
     Expenses:
      Cost of revenue
       (including non-
       cash, equity-
       based
        compensation of
         $1,491, $1,474,
         $3,121 and
         $2,957)           120,221       121,441        239,589       241,962
      Sales, general and
       administrative
       expenses
       (including
        non-cash, equity-
         based
         compensation of
         $5,054, $6,311,
         $11,877 and
         $11,719)           56,877     51,084     108,596    100,153
      Depreciation,
       amortization and
       accretion            42,089        37,799         82,826        74,134
                            ------        ------         ------        ------
    Total Operating
     Expenses              219,187       210,324        431,011       416,249
                           -------       -------        -------       -------
    Income from
     Continuing
     Operations              2,569         9,537          7,332        25,135
      Other income and
       expense              15,487        14,955         31,244        29,381
                            ------        ------         ------        ------
    Income (Loss) from
     Continuing
     Operations before
      Income Taxes         (12,918)       (5,418)       (23,912)       (4,246)
      Income tax expense       224           756            579         1,311
                               ---           ---            ---         -----
    Income (Loss) from
     Continuing
     Operations, net
      of Income Taxes      (13,142)       (6,174)       (24,491)       (5,557)
                           -------        ------        -------        ------
      Income (loss) from
       discontinued
       operations, net
        of income taxes        (49)            -            (49)            -
                               ---           ---            ---           ---
    Net Income (Loss)     $(13,191)      $(6,174)      $(24,540)      $(5,557)
                          ========       =======       ========       =======
    
</pre>
<p> </p>
<pre>
    
    Income (Loss) per
     Share from
     Continuing
     Operations
      Basic earnings per
       share                $(0.24)       $(0.12)        $(0.45)       $(0.10)
                            ======        ======         ======        ======
      Diluted earnings
       per share            $(0.24)       $(0.12)        $(0.45)       $(0.10)
                            ======        ======         ======        ======
    
</pre>
<p> </p>
<pre>
    
    Weighted-Average
     Common Shares
     Outstanding
      Basic                 55,005        53,664         54,775        53,650
                            ======        ======         ======        ======
      Diluted               55,005        53,664         54,775        53,650
                            ======        ======         ======        ======




    
</pre>
<p> </p>
<pre>
    
                       SAVVIS, Inc. and Subsidiaries
              Unaudited Condensed Consolidated Balance Sheets
                              (in thousands)
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                                                   December
                                                  June 30,            31,
                                                        2010            2009
                                                        ----            ----
                       ASSETS
    Current Assets:
    Cash and cash equivalents                       $118,729        $160,815
    Trade accounts receivable, net                    59,517          45,754
    Prepaid expenses and other current assets         40,741          21,217
    Total Current Assets                             218,987         227,786
                                                     -------         -------
    Property and equipment, net                      834,316         783,852
    Goodwill and intangibles                          95,336               -
    Other non-current assets                          20,102          13,120
                                                      ------          ------
    Total Assets                                  $1,168,741      $1,024,758
                                                  ==========      ==========
    
</pre>
<p> </p>
<p>    LIABILITIES AND STOCKHOLDERS' EQUITY</p>
<p> </p>
<pre>
    
    Current Liabilities:
    Payables and other trade accruals                $76,972         $52,710
    Current portion of long-term debt and
     lease obligations                                21,506          17,479
    Other accrued liabilities                         75,562          68,314
    Total Current Liabilities                        174,040         138,503
                                                     -------         -------
    Long-term debt, net of current portion           486,873         376,089
    Capital and financing method lease
     obligations, net of current portion             225,927         223,897
    Other accrued liabilities                         77,358          76,452
    Total Liabilities                                964,198         814,941
                                                     -------         -------
    
</pre>
<p> </p>
<pre>
    
    Stockholders' Equity:
    Common stock                                         551             545
    Additional paid-in capital                       884,354         862,834
    Accumulated deficit                             (658,969)       (634,429)
    Accumulated other comprehensive loss             (21,393)        (19,133)
    Total Stockholders' Equity                       204,543         209,817
                                                     -------         -------
    Total Liabilities and Stockholders' Equity    $1,168,741      $1,024,758
                                                  ==========      ==========




    
</pre>
<p> </p>
<pre>
    
                               SAVVIS, Inc. and Subsidiaries
                 Unaudited Condensed Consolidated Statements of Cash Flows
                                       (in thousands)
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                             Three Months Ended      Six Months Ended
                                  June 30,               June 30,
                                  --------               --------
                                2010         2009      2010         2009
                                ----         ----      ----         ----
    Cash Flows from
     Operating
     Activities:
    Net income (loss)       $(13,191)     $(6,174) $(24,540)     $(5,557)
      (Income) loss from
       discontinued
       operations, net of
       income taxes              (49)           -       (49)           -
                                 ---          ---       ---          ---
        Income (loss) from
         continuing
         operations, net of
         income taxes        (13,142)      (6,174)  (24,491)      (5,557)
    Reconciliation of
     net income (loss)
     from continuing
     operations to
      net cash provided by
       operating
       activities:
    Depreciation,
     amortization and
     accretion                42,089       37,799    82,826       74,134
    Non-cash, equity-
     based compensation        6,545        7,785    14,998       14,676
    Accrued interest,
     net                      (1,948)      (1,293)    1,338        2,264
    Amortization of debt
     discount                  3,845        3,542     7,612        7,013
    Other, net                   261         (595)      593         (542)
    Net changes in
     operating assets
     and liabilities:
      Trade accounts
       receivable, net        (2,843)       3,261    (9,424)       5,464
      Prepaid expenses and
       other current and
       non-current assets    (15,192)      (3,268)  (21,764)      (2,277)
      Payables and other
       trade accruals          1,794       (3,018)    9,249       (2,991)
      Other accrued
       liabilities            10,910          357    10,354       (8,138)
                              ------          ---    ------       ------
    Net cash provided by
     continuing
     operations               32,319       38,396    71,291       84,046
    Net cash provided by
     discontinued
     operations                    1            -         1            -
                                 ---          ---       ---          ---
    Net cash provided by
     operating
     activities               32,320       38,396    71,292       84,046
                              ------       ------    ------       ------
    
</pre>
<p> </p>
<pre>
    
    Cash Flows from
     Investing
     Activities:
    Payments for capital
     expenditures            (51,476)    (27,224)  (102,167)    (45,476)
    Acquisition of
     business, net of
     cash acquired          (112,537)           -  (112,537)           -
    Net cash used in
     investing
     activities             (164,013)    (27,224)  (214,704)    (45,476)
                            --------      -------  --------      -------
    
</pre>
<p> </p>
<pre>
    
    Cash Flows from
     Financing
     Activities:
    Proceeds from long-
     term debt               110,000          799   110,000        2,865
    Payments for debt
     issuance costs           (2,550)           -    (2,550)           -
    Proceeds from stock
     option exercises          2,683           38     9,331           42
    Payments for
     employee taxes on
     equity-based
     instruments                  (2)           -    (2,814)        (444)
    Principal payments
     on long-term debt        (1,650)      (1,650)   (3,300)      (3,300)
    Principal payments
     under capital lease
     obligations              (2,651)      (2,208)   (5,189)      (4,158)
    Other, net                  (586)           -    (1,198)           -
    Net cash provided by
     (used in) financing
     activities              105,244       (3,021)  104,280       (4,995)
                             -------       ------   -------       ------
    Effect of exchange
     rate changes on
      cash and cash
       equivalents              (750)         935    (2,954)          89
                                ----          ---    ------          ---
    
</pre>
<p> </p>
<pre>
    
    Net Increase
     (Decrease) in Cash
     and Cash
     Equivalents             (27,199)       9,086   (42,086)      33,664
    Cash and Cash
     Equivalents,
     Beginning of Period     145,928      145,862   160,815      121,284
                             -------      -------   -------      -------
    Cash and Cash
     Equivalents, End of
     Period                 $118,729     $154,948  $118,729     $154,948
                            ========     ========  ========     ========
    
</pre>
<p> </p>
<pre>
    
    Supplemental
     Disclosures of Cash
     Flow Information:
    Cash paid for
     interest                $12,953      $12,613   $20,786      $20,101




    
</pre>
<p> </p>
<pre>
    
                       SAVVIS, Inc. and Subsidiaries
       Unaudited Selected Condensed Consolidated Financial Information
                              (in thousands)
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                              Three Months Ended
                                              ------------------
                                           June 30,             March 31,
                                           --------
                                        2010         2009            2010
                                        ----         ----            ----
    Segment Revenue:
    Hosting                         $158,179     $152,159        $152,751
    Network                           63,577       67,702          63,836
    Total Revenue                   $221,756     $219,861        $216,587
                                    ========     ========        ========
    
</pre>
<p> </p>
<pre>
    
    Segment Adjusted EBITDA:
    Hosting                          $59,280      $60,221         $58,960
    Network                           16,589       16,804          16,265
    Corporate - Other (1)            (21,153)    (21,904)         (21,272)
    Total Adjusted EBITDA (2)        $54,716      $55,121         $53,953
                                     =======      =======         =======
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    Adjusted EBITDA
     Reconciliation:
    Income from continuing
     operations                       $2,569       $9,537          $4,763
    Depreciation, amortization
     and accretion                    42,089       37,799          40,737
    Non-cash, equity-based
     compensation                      6,545        7,785           8,453
    Acquisition and integration
     costs                             3,513            -               -
    Adjusted EBITDA                  $54,716      $55,121         $53,953
                                     =======      =======         =======
    
</pre>
<p> </p>
<pre>
    
    Reconciliation of Adjusted
     EBITDA to Income (Loss)
      from Continuing Operations
       before Income Taxes:
    Adjusted EBITDA                  $54,716      $55,121         $53,953
    Depreciation, amortization
     and accretion                   (42,089)    (37,799)         (40,737)
    Non-cash, equity-based
     compensation                     (6,545)      (7,785)         (8,453)
    Acquisition and integration
     costs                            (3,513)           -               -
    Interest income                       20           44              30
    Interest expense                 (15,573)    (14,661)         (15,475)
    Other income (expense)                66         (338)           (312)
                                         ---         ----            ----
    Income (Loss) from Continuing
     Operations
      before Income Taxes           $(12,918)     $(5,418)       $(10,994)
                                    ========      =======        ========
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
    Leveraged Free Cash Flow
     Reconciliation:
    Adjusted EBITDA                  $54,716      $55,121         $53,953
    Acquisition and integration
     costs                            (3,513)           -               -
    Cash capital expenditures        (51,476)    (27,224)         (50,691)
    Cash interest paid               (12,953)    (12,613)          (7,832)
    Interest income                       20           44              30
    Leveraged Free Cash Flow (3)    $(13,206)     $15,328         $(4,540)
                                    ========      =======         =======
    
</pre>
<p> </p>
<pre>
    
    (1) Corporate -Other adjusted EBITDA includes all costs not directly
        associated with hosting services or network services. Costs not
        directly associated with hosting services or network services
        include, but are not limited to, general and administrative costs.
    (2) Adjusted EBITDA represents income from continuing operations before
        depreciation, amortization, accretion and non-cash, equity-based
        compensation and excludes acquisition and integration costs.  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.
    (3) Leveraged Free Cash Flow represents adjusted EBITDA less cash paid
        acquisition and integration costs, less cash capital expenditures
        and less cash interest, net. We have included information concerning
        leveraged free cash flow because we believe that in our industry
        such information is a relevant measurement of a company's operating
        financial performance and liquidity.




    
</pre>
<p> </p>
<pre>
    
                      SAVVIS, Inc. and Subsidiaries
         Unaudited Condensed Consolidated Statements of Operations
                  (in thousands, except per share data)
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                                   Three
                                                   Months       Six Months
                                                   Ended           Ended
                                                   -----           -----
                                                        June 30, 2010
                                                        -------------
    
</pre>
<p> </p>
<pre>
    
    Revenue                                       $221,756         $438,343
    Operating Expenses:
      Cost of revenue (including non-cash,
       equity-based
        compensation of $1,491, $1,474, $3,121
         and $2,957)                               120,221          239,589
      Sales, general and administrative
       expenses (including
        non-cash, equity-based compensation of
         $5,054, $6,311, $11,877 and $11,719)       56,877          108,596
      Depreciation, amortization and accretion      42,089           82,826
                                                    ------           ------
    Total Operating Expenses                       219,187          431,011
                                                   -------          -------
    Income from Continuing Operations                2,569            7,332
      Other income and expense                      15,487           31,244
                                                    ------           ------
    Income (Loss) from Continuing Operations
     before
      Income Taxes                                 (12,918)         (23,912)
      Income tax expense                               224              579
                                                       ---              ---
    Income (Loss) from Continuing Operations,
     net
      of Income Taxes                              (13,142)         (24,491)
                                                   -------          -------
      Income (loss) from discontinued
       operations, net
        of income taxes                                (49)             (49)
                                                       ---              ---
    Net Income (Loss)                             $(13,191)        $(24,540)
                                                  ========         ========
    
</pre>
<p> </p>
<pre>
    
    Adjusted EBITDA                                $54,716         $108,669
         As a percentage of revenue                     25%              25%
    
</pre>
<p> </p>
<pre>
    
    Acquisition and integration costs                3,513            3,513
                                                     -----            -----
    
</pre>
<p> </p>
<pre>
    
    Adjusted EBITDA including acquisition and
     integration costs                             $51,203         $105,156
         As a percentage of revenue                     23%              24%




    
</pre>
<p> </p>
<pre>
    
      SAVVIS, Inc. and Subsidiaries
      Unaudited Supplemental Revenue Information
      (in thousands, except per square foot amounts)
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                                 Three Months Ended
                                                 ------------------
                                                   September        December
                                       June 30,       30,              31,
                                           2009          2009            2009
                                           ----          ----            ----
     Data Center Revenue
     Colocation                         $84,856       $85,341         $86,892
     Managed hosting                     67,303        62,814          67,772
    
</pre>
<p> </p>
<p> </p>
<pre>
    
     Data Center Metrics (1)
     Total raised floor                   1,433         1,433           1,433
     Revenue space                          923           886             878
     Billed square feet                     622           640             591
     Utilization                             67%           72%             67%
    
</pre>
<p> </p>
<pre>
    
     Average Billed Square Feet
     Colocation                           595.4         608.6           592.3
     Managed hosting                       21.4          22.2            22.9
     Total Average Billed Square
      Feet                                616.8         630.8           615.2
                                          =====         =====           =====
    
</pre>
<p> </p>
<pre>
    
     Average Monthly Data Center
      Revenue
            Per Billed Square Foot (2)
     Colocation                           $47.5         $46.7           $48.9
     Managed hosting                    1,046.4         945.1           985.4



    
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
                                         Three Months Ended
                                         ------------------
                                          March 31,       June 30,
                                                2010          2010
                                                ----          ----
      Data Center Revenue
      Colocation                             $82,467       $84,281
      Managed hosting                         70,284        73,898
    
</pre>
<p> </p>
<p> </p>
<pre>
    
      Data Center Metrics (1)
      Total raised floor                       1,477         1,477
      Revenue space                              889           885
      Billed square feet                         601           622
      Utilization                                 68%           70%
    
</pre>
<p> </p>
<pre>
    
      Average Billed Square Feet
      Colocation                               572.1         586.6
      Managed hosting                           23.8          25.1
      Total Average Billed Square
       Feet                                    595.9         611.7
                                               =====         =====
    
</pre>
<p> </p>
<pre>
    
      Average Monthly Data Center
       Revenue
             Per Billed Square Foot (2)
      Colocation                               $48.1         $47.5
      Managed hosting                          984.5         974.4
    
</pre>
<p> </p>
<pre>
    
    (1)  Data center metrics are calculated as of period end for each
         respective quarter.
    (2)  Average monthly data center revenue per billed square foot is
         calculated as the revenue per quarter divided by the average billed
         square feet per quarter stated on a monthly basis.





    
</pre>
<p> </p>
<p> </p>
<p>  SAVVIS Revenue by Vertical</p>
<p> </p>
<pre>
    
                                 Three Months Ended
                                 ------------------
                          June       September      December
                           30,          30,            31,
                            2009          2009           2009
                            ----          ----           ----
    
</pre>
<p> </p>
<pre>
    
     Financial vertical  $60,065       $53,974        $57,742
     Other               159,796       159,237        162,077
     Total Revenue      $219,861      $213,211       $219,819
                        ========      ========       ========



    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                        Three Months Ended
                                        ------------------
                                                           June
                                        March 31,           30,
                                              2010           2010
                                              ----           ----
    
</pre>
<p> </p>
<pre>
    
      Financial vertical                   $55,532        $60,417
      Other                                161,055        161,339
      Total Revenue                       $216,587       $221,756
                                          ========       ========


    
</pre>
<p> </p>
<p> </p>
<p>  Network Revenue Supplemental Information:</p>
<p> </p>
<pre>
    
                                   Three Months Ended
                                   ------------------
                             June    September       December
                              30,       30,             31,
                              2009        2009            2009
                              ----        ----            ----
    
</pre>
<p> </p>
<pre>
    
     Core (1)              $26,918     $28,616         $31,483
     Sustaining (2)         40,784      36,440          33,672
     Total Network Revenue $67,702     $65,056         $65,155
                           =======     =======         =======



    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                        Three Months Ended
                                        ------------------
                                                          June
                                        March 31,          30,
                                              2010         2010
                                              ----         ----
    
</pre>
<p> </p>
<pre>
    
      Core (1)                             $31,670      $33,459
      Sustaining (2)                        32,166       30,118
      Total Network Revenue                $63,836      $63,577
                                           =======      =======
    
</pre>
<p> </p>
<pre>
    
    (1)  Core network includes revenue from Thomson Reuters and from other
         financial vertical and data center customers, who also purchase
         bundled network and hosting services.
    (2)  Sustaining network includes revenue from services that are either in
         slower growth or declining markets or are not directly tied to the
         future growth of the company's network and hosting businesses.









    

For further information: For further information: Investors: Peggy Reilly Tharp, +1-314-628-7491, peggy.tharp@savvis.net; or Media: George Csolak, +1-314-628-7266, george.csolak@savvis.net Web Site: http://www.savvis.net

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SAVVIS, INC.

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