FOSTER CITY, Calif.--(BUSINESS WIRE)--Dec. 8, 2004--
Acquisition of New 103,000 Sq. Ft. Facility Gives Equinix
Additional Capacity For Growth in One of Its Fastest
Equinix, Inc. (Nasdaq:EQIX), the leading provider of
network-neutral data centers and Internet exchange services, today
announced that it has signed a long-term lease for an additional
103,000 square feet of data center space in San Jose close to the
company's two other Internet Business Exchange(TM) (IBX(R)) centers in
the region. As a result of the addition of the new facility, Equinix
has updated guidance for the year ending December 31, 2005.
The expansion, acquired through the purchase of assets and the
assumption of the existing data center lease from AboveNet, adds
approximately 2,000 cabinets. The expansion increases Equinix's
Silicon Valley footprint to approximately 400,000 square feet and its
global footprint to approximately 1.4 million square feet, solidifying
Equinix's position as the leading provider of network-rich data
centers and Internet exchange services. Equinix intends to begin
placing new customers in the center starting March 1, 2005.
With more than 200 network service providers, all of the top ten
Web properties (according to Nielsen NetRatings November 22, 2004) and
hundreds of other companies operating within its facilities, Equinix's
neutral, network-rich IBX centers serve as hubs for the exchange of
core Internet traffic.
All three of Equinix's Silicon Valley centers will be
interconnected through redundant AboveNet dark fiber links managed by
Equinix in order for participants in each center to leverage the
benefits of directly connecting with participants in the other
centers. Customers in the new center will have immediate and scalable
access to more than 50 networks and numerous strategic business
partners for transit, peering and exchange services, including
AboveNet which will provide the dark fiber services to the three
Silicon Valley centers through the term of the lease.
The new center features a physical infrastructure that is
consistent with Equinix's industry-leading standards for
high-performance security, environmental control and power
availability. This power infrastructure will support blade
technologies and other high power density deployments.
"Equinix continues to experience strong demand in Silicon Valley
for our high-performance Internet hubs where a critical mass of
networks, enterprises and content companies can operate and directly
exchange traffic with each other," said Peter Van Camp, CEO of
Equinix. "This expansion comes as a result of the tremendous success
we have seen in our San Jose center and the Santa Clara center that we
opened one year ago, and it gives us additional capacity to maintain
our momentum in this market with minimal capital investment."
Equinix intends to invest approximately $5.0 million of capital
expenditures in 2005 to make additional infrastructure enhancements to
this new center. The new Silicon Valley center is expected to
generate, at capacity, annual revenues between $25.0 and $30.0
million. Equinix expects long-term cash gross margins from this
expansion to be in excess of 65%, consistent with the company's model
for previous expansion centers.
As a result of the acquisition of the new Silicon Valley data
center, Equinix has updated its guidance for 2005. Total revenues for
2005 are expected to be in the range of $202.0 to $212.0 million. Cash
gross margins are expected to be in the range of 51% to 53%. This
reduction in cash gross margins is a result of additional rent and
headcount costs associated with the new Silicon Valley data center. In
addition, these costs are offset by approximately $3.0 million of the
new Ashburn data center lease costs that are expected to be allocated
for accounting purposes to capital equipment leased in the center.
Cash selling, general and administrative expenses are expected to
remain in the range of $48.0 to $50.0 million. EBITDA for the year is
expected to be between $55.0 and $60.0 million.
Capital expenditures for 2005 are expected to be in a range of
$23.0 to $27.0 million, comprised of $13.0 to $15.0 million of ongoing
capital expenditures and approximately $10.0 to $12.0 million of
expansion capital expenditures for the new Silicon Valley center and
the remaining build-out of the Ashburn expansion. Free cash flow is
expected to exceed $30.0 million.
Consistent with our prior guidance, Equinix is expected to become
net income positive by the fourth quarter of 2005, excluding the
impact of mandatory expensing of stock options. This timeline would be
accelerated upon the conversion of the STT convertible secured notes
in 2005, provided the stock trades at $32.12 for 30 consecutive
Equinix is the leading global provider of network-neutral data
centers and Internet exchange services for enterprises, content
companies, systems integrators and network services providers. Through
the company's 14 Internet Business Exchange(TM) (IBX(R)) centers in
five countries, customers can directly interconnect with every major
global network and ISP for their critical peering, transit and traffic
exchange requirements. These interconnection points facilitate the
highest performance and growth of the Internet by serving as neutral
and open marketplaces for Internet infrastructure services, allowing
customers to expand their businesses while reducing costs.
This press release contains forward-looking statements that
involve risks and uncertainties. Actual results may differ materially
from expectations discussed in such forward-looking statements.
Factors that might cause such differences include, but are not limited
to, the challenges of operating IBX centers and developing, deploying
and delivering Equinix services; competition from existing and new
competitors; the ability to generate sufficient cash flow or otherwise
obtain funds to repay outstanding indebtedness; the loss or decline in
business from our key customers and other risks described from time to
time in Equinix's filings with the Securities and Exchange Commission.
In particular, see Equinix's recent quarterly and annual reports filed
with the Securities and Exchange Commission, copies of which are
available upon request from Equinix. Equinix does not assume any
obligation to update the forward-looking information contained in this
Equinix and IBX are registered trademarks of Equinix, Inc.
Internet Business Exchange is a trademark of Equinix, Inc.
CONTACT: K/F Communications, Inc. (for Equinix)
David Fonkalsrud, 415-255-6506