INAP Provides 2019 Outlook with Enhanced Data Center Portfolio
- 2019 Revenue Outlook to Increase to
$325 Million - $335 Million, excluding Revenue from Data Center and POP Asset Rationalization in 2018 to Improve Profitability.
- 2019 Outlook for GAAP Net Loss of
$(37) Million - $(47) Million, with Adjusted EBITDA Increasing to $120 Million - $130 Million, or approximately 37% Margin for 2019, exiting towards 40% Margin.
- Opportunities to Maintain Relatively Lower CapEx between
$40 Million - $50 MillionFuels Organic Growth targets between 4-6% Enabled by Remaining Raised Floor Availability.
- INAP Plans to Refinance Debt to Gain Additional Flexibility, Subject to Market Conditions
- Board Authorizes initial
$5 Million, Share Repurchase Program.
- 2019 Initiatives include Improved Portfolio Cost Savings, the Sale of Non-Core Assets, and Corporate Development in Key Metro Markets in Demand for Data Center Services.
- Management to Hold Conference Call Today at
5 p.m. E.T.
2018 Wrap-Up and Initial 2019 Outlook
Full-Year 2018 Revenue is expected to be within the outlook range of
2018 Net Loss is expected to be approximately
|$ Millions||2017||Full-Year 2018||2019|
|Reported Actual||Guidance||Initial Outlook|
|Revenue||$281||$320 - $324||$325-$335|
|Adjusted EBITDA (non-GAAP)||$92
|$111 - $114
34.7% - 35.2% Margin
36.9% - 38.8% Margin
|Capital Expenditures||$36||$40-$43||Approximately $40 with $10 Reserve|
“In an effort to better communicate our portfolio improvement accomplishments during the last two years, we are pleased to announce portfolio enhancements that will continue to make INAP more profitable over the long term. The acquisition of new data center footprints in
Mr. Aquino continued, “In 2019, we have a new list of objectives that will continue to refine our asset portfolio, as we work towards gaining more flexibility in our capital structure. The recent equity infusion created runway to continue growing our business and positions us to opportunistically refinance our credit facility when market conditions improve. I will add that our credit profile remains strong with ample cash on our balance sheet, our
Authorization of Stock Repurchase
INAP’s Board of Directors authorized management to repurchase an initial
INAP will hold a 1-hour conference call today,
An online archive of the webcast will be archived in the Investor Relations section of the Company’s website. An audio-only telephonic replay will also be accessible for 5 days by dialing 855-859-2056 using replay code 6679527. International callers can listen to the archived event at 404-537-3406 with the same code.
For more information, visit www.inap.com.
Chief Communications Officer INAP
This press release contains forward-looking statements. Forward-looking statements include statements regarding industry trends, our future financial position and performance, business strategy, revenues and expenses in future periods, projected levels of growth and other matters that do not relate strictly to historical facts. These statements are often identified by words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “projects,” “forecasts,” “plans,” “intends,” “continue,” “could” or “should,” that an “opportunity” exists, that we are “positioned” for a particular result, statements regarding our vision or similar expressions or variations. These statements are based on the beliefs and expectations of our management team based on information available at the time such statements are made. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by such forward-looking statements. Therefore, actual future results and trends may differ materially from what is forecast in such forward-looking statements due to a variety of factors, including, without limitation: our expectations for 2018 and 2019 revenue, GAAP Net Loss, Adjusted EBITDA, GAAP Net Loss margin, Adjusted EBITDA margin, and capital expenditures; our forecast for organic revenue growth and margin expansion; our ability to refinance our debt on favorable terms; our ability to successfully complete the share repurchase program; and our ability to sell non-core assets.
These risks and other important factors discussed under the caption “Risk Factors” in our most recent Annual Report on Form 10-K filed with the
Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements attributable to INAP or persons acting on its behalf are expressly qualified in their entirety by the foregoing forward-looking statements. All such statements speak only as of the date made, and INAP undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
In addition to providing financial measurements based on accounting principles generally accepted in
We define the following non-GAAP measures as follows:
- Adjusted EBITDA is a non-GAAP measure and is GAAP net loss attributable to INAP shareholders plus depreciation and amortization, interest expense, provision (benefit) for income taxes, other expense (income), (gain) loss on disposal of property and equipment, exit activities, restructuring and impairments, stock-based compensation, non-income tax contingency, strategic alternatives and related costs, organizational realignment costs, pre-acquisition costs and claim settlement.
- Adjusted EBITDA margin is Adjusted EBITDA as a percentage of revenues.
Adjusted EBITDA is not a measure of financial performance 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:
- EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, income taxes, depreciation and amortization, which can vary substantially from company-to-company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired; and
- investors commonly adjust EBITDA information to eliminate the effect of disposals of property and equipment, impairments, restructuring and stock-based compensation which vary widely from company-to-company and impair comparability.
Our management uses Adjusted EBITDA:
- as a measure of operating performance to assist in comparing performance from period-to-period on a consistent basis;
- as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; and
- in communications with the board of directors, analysts and investors concerning our financial performance.
Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is presented as we understand certain investors use it as one measure of our historical ability to service debt. Also Adjusted EBITDA is used in our debt covenants.
Although we believe, for the foregoing reasons, that our presentation of the non-GAAP financial measure provides useful supplemental information to investors regarding our results of operations, our non-GAAP financial measure 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.
A reconciliation of GAAP Net Loss Attributable to INAP Shareholders to full year 2017 Adjusted EBITDA and then to forward looking Adjusted EBITDA and Adjusted EBITDA margin for full-year 2018 and 2019 is as follows (in millions):
|Actual||Previous Range||2019 Guidance|
|2017||as of 11/1/2018||as of 12/17/2018|
|Net loss (GAAP) attributable to INAP Shareholders||$||(45||)||(16.0||)%||$||(54||)||(16.9||)%||$||(51||)||(15.7||)%||$||(47||)||(14.5||)%||$||(37||)||(11.0||)%|
|Depreciation and amortization||75||26.7||%||88||27.5||%||88||27.2||%||90||27.7||%||90||26.9||%|
|Provision for income taxes||0||0.0||%||0||0.0||%||0||0.0||%||0||0.0||%||0||0.0||%|
|Exit activities, restructuring and impairments||6||2.1||%||4||1.3||%||4||1.2||%||2||0.6||%||2||0.6||%|
|Non-income tax contingency and acquisition costs||1||0.4||%||4||1.3||%||4||1.2||%||2||0.6||%||2||0.6||%|
|Adjusted EBITDA (non-GAAP)||$||92||32.7||%||$||111||34.7||%||$||114||35.2||%||$||120||36.9||%||$||130||38.8||%|
Source: Internap Corporation