\nCyxtera (NASDAQ: CYXT), a global leader in data center colocation and interconnection services, today announced that it has received $50 million in new financing from certain of its lenders, holding over two-thirds of its outstanding term loan (the \u201cLenders\u201d), to support ongoing business operations. In connection with the new financing, Cyxtera has entered into a Restructuring Support Agreement (\u201cRSA\u201d) with the Lenders to strengthen the Company\u2019s financial position and facilitate the business\u2019s long-term success.<\/p>\n
\nCyxtera is continuing to operate its unique global platform of highly interconnected data centers with an unwavering focus on providing high-quality services that help its customers around the world transform and scale their businesses.<\/p>\n
\n\u201cWe have strong momentum in our business, and demand for our global data center platform remains high,\u201d said Nelson Fonseca, Cyxtera\u2019s Chief Executive Officer. \u201cWith the support of our Lenders, we are taking steps to strengthen our financial position and ensure that our business is best positioned for the long term. We are confident in our ability to continue growing our business and creating value for the customers and communities we serve as we work to implement the transactions contemplated by the agreement.\u201d<\/p>\n
\nMr. Fonseca added, \u201cWe thank our customers and partners for their continued support, and we are grateful to our employees for their hard work and commitment to Cyxtera. We look forward to continuing to provide innovative, cloud-like data center services and enabling our customers to meet their evolving business needs.\u201d<\/p>\n
Additional Information Regarding the RSA<\/b><\/p>\n
\nThe terms of the RSA contemplate the Company undertaking a process to pursue a potential sale of the business or a significant investment from a new investor. In connection with this process, the Lenders have agreed to offer long-term financing for potential investors to address existing near-term maturities.<\/p>\n
\nTo the extent the process does not result in an acceptable transaction with a third party, as defined by the RSA, the Company would implement a comprehensive financial restructuring and transition majority ownership of the business to the Lenders through an expedited, voluntary court-supervised process under Chapter 11 of the U.S. Bankruptcy Code.<\/p>\n
\nIn all scenarios being contemplated, Cyxtera will continue operating and serving customers via its global data center platform with innovative services and the highest levels of support. Additionally, regardless of the path forward, employees will continue receiving their pay and benefits without interruption. The Company will also continue evaluating its data center footprint, consistent with its commitment to optimizing operations.<\/p>\n
\nCyxtera expects to determine a path forward under the RSA in the coming weeks and will provide an update in due course.<\/p>\n
First Quarter 2023 Financial Highlights<\/b><\/p>\n
\nCyxtera today also shared key financial highlights for the quarter ended March 31, 2023, as follows:<\/p>\n
- \n
- \nTotal revenue increased by $14.3 million, or 7.8% year over year, to $196.7 million in the first quarter.<\/p>\n<\/li>\n
- \nRecurring revenue increased by $14.7 million, or 8.5% year over year, to $188.4 million in the first quarter.<\/p>\n<\/li>\n
- \nCore revenue increased by $18.1 million, or 10.9% year over year, to $184.0 million in the first quarter.<\/p>\n<\/li>\n
- \nNet Loss of $325.4 million in the quarter, including a non-cash Goodwill impairment charge of $278.2 million; Transaction Adjusted EBITDA1<\/sup> increased by $4.7 million, or 8.0%, to $63.3 million in the first quarter.<\/p>\n<\/li>\n<\/ul>\n
\nCarlos Sagasta, Cyxtera\u2019s Chief Financial Officer, said, \u201cOur solid first quarter results underscore the strength of our operations and Cyxtera\u2019s ability to deliver consistent revenue growth. We appreciate the continued patience and support of our suppliers and business partners and look forward to working closely with them to drive our mutual success.\u201d<\/p>\n
Additional Information<\/b><\/p>\n
\nAdditional details regarding the RSA and Cyxtera\u2019s first quarter 2023 financial results will be provided in the Company\u2019s Form 8-K and Form 10-Q, respectively, to be filed with the U.S. Securities and Exchange Commission (the \u201cSEC\u201d). A presentation regarding the Company\u2019s first quarter 2023 financial results, along with supplemental financial information, will also be available on the Cyxtera Investor Relations website at http:\/\/ir.cyxtera.com\/<\/a>.<\/p>\n
\nKirkland & Ellis LLP is serving as legal counsel to Cyxtera, Guggenheim Securities, LLC is serving as financial advisor and AlixPartners, LLP is serving as restructuring advisor.<\/p>\n
About Cyxtera<\/b><\/p>\n
\nCyxtera is a global leader in colocation and interconnection services, with a footprint of more than 60 data centers in over 30 markets. With IT infrastructure becoming increasingly hybrid, complex, and distributed, Cyxtera continues to expand its portfolio beyond space and power to deliver more cloud-like and flexible infrastructure solutions across its global data center platform and robust partner ecosystem. Today, Cyxtera provides more than 2,300 enterprise and government customers with the technology solutions they need to scale faster, achieve financial goals, and gain a competitive advantage. For more information, please visit www.cyxtera.com<\/a>.<\/p>\n
\n
\n __________<\/td>\n<\/tr>\n \n \n 1<\/sup> A complete reconciliation of Net Loss to Transaction Adjusted EBITDA is included below.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
Forward-Looking Statements<\/b><\/p>\n
\nThis press release includes \u201cforward-looking statements\u201d within the meaning of the federal securities laws. Because forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Cyxtera\u2019s control. Actual results and conditions (financial or otherwise) may differ materially from those indicated in the forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results and conditions to differ materially from those indicated in the forward-looking statements, including, but not limited to, risks related to Cyxtera\u2019s material indebtedness with near term maturities; Cyxtera\u2019s ability to implement the balance sheet restructuring and other transactions contemplated in the RSA; Cyxtera\u2019s ability to refinance or renew its existing indebtedness on favorable terms or at all; Cyxtera\u2019s ability to access external sources of capital on favorable terms or at all, which could limit Cyxtera\u2019s ability to execute its business and growth strategies; Cyxtera\u2019s ability to maintain its credit ratings; increases in interest rates; fluctuations in energy prices; fluctuations in foreign currency exchange rates in the markets in which Cyxtera operates internationally\u037e inflation; prolonged power outages, shortages or capacity constraints\u037e physical and electronic security breaches and cyber-attacks, which could disrupt Cyxtera\u2019s operations\u037e any failure of Cyxtera\u2019s physical infrastructure or negative impact on its ability to provide its services, or damage to customer infrastructure within its data centers\u037e inadequate or inaccurate external and internal information, including budget and planning data, which could lead to inaccurate financial forecasts and inappropriate financial decisions\u037e Cyxtera\u2019s fluctuating operating results\u037e Cyxtera\u2019s government contracts, which are subject to early termination, audits, investigations, sanctions and penalties\u037e Cyxtera\u2019s reliance on third parties to provide internet connectivity to its data centers\u037e the incurrence of goodwill and other intangible asset impairment charges, such as Cyxtera\u2019s recent impairment of goodwill, or impairment charges to Cyxtera\u2019s property and equipment, which could result in a significant reduction to its earnings; the requirements of being a public company, including maintaining adequate internal controls over financial and management systems; Cyxtera\u2019s ability to manage its growth; volatility of the market price of Cyxtera\u2019s Class A common stock; future sales, or the perception of future sales, of Cyxtera Class A common stock by Cyxtera or its existing securityholders in the public market, which could cause the market price for Cyxtera\u2019s Class A common stock to decline; Cyxtera\u2019s ability to use its United States federal and state net operating losses to offset future United States federal and applicable state taxable income may be subject to certain limitations that could accelerate or permanently increase taxes owed; Cyxtera\u2019s ability to address the significant implementation and operational complexities required to complete a conversion to a REIT, including, without limitation, completing internal reorganizations and modifying accounting and information technology systems, and receiving any necessary stakeholder and other approvals; and risks related to the effects of the COVID-19 pandemic on Cyxtera\u2019s business or future results, including supply chain disruptions. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the \u201cRisk Factors\u201d disclosed in Cyxtera\u2019s filings with the SEC from time to time. There may be additional risks that Cyxtera does not presently know or that it currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Cyxtera\u2019s expectations, plans or forecasts of future events and views as of the date of this press release. Accordingly, you should not place undue reliance upon any such forward-looking statements in this press release. Neither Cyxtera nor any of its affiliates assume any obligation to update this press release, except as required by law.<\/p>\n
Statement Regarding Non-GAAP Financial Measures<\/b><\/p>\n
\nThis press release contains Transaction Adjusted EBITDA, which is a supplemental measure that is not required by, or presented in accordance with, accounting principles generally accepted in the United States (\u201cGAAP\u201d). Transaction Adjusted EBITDA represents the measure of EBITDA disclosed to Starboard Value Acquisition Corp. (\u201cSVAC\u201d) in connection with its consideration of the business combination transaction between SVAC and Cyxtera. Cyxtera defines Transaction Adjusted EBITDA as net income (loss) before the following items: depreciation and amortization, interest and other expenses, net, income tax expense (benefit), equity-based compensation, stand-up separation & other, goodwill impairment, restructuring costs & other, straight-line rent adjustment, amortization of favorable \/ unfavorable leasehold interest & asset retirement obligation accretion, and change in fair value of warrant liabilities. As a Non-GAAP financial measure, Transaction Adjusted EBITDA excludes items that are significant in understanding and assessing Cyxtera\u2019s financial results or position. Therefore, this measure should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that Cyxtera\u2019s presentation of this measure may not be comparable to similarly-titled measures used by other companies. You should review the reconciliation of the non-GAAP financial measures included in this press release to the most directly comparable GAAP financial measures as well as Cyxtera\u2019s unaudited financial statements included in its Quarterly Report on Form 10-Q filed with the SEC and not rely on any single financial measure to evaluate Cyxtera\u2019s business.<\/p>\n
\n
\n \n \nCYXTERA TECHNOLOGIES, INC.<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRECONCILIATION OF GAAP TO NON-GAAP RESULTS<\/p>\n<\/td>\n<\/tr>\n
\n \n \n(unaudited, in millions)<\/p>\n<\/td>\n<\/tr>\n
\n \n \u00a0<\/td>\n<\/tr>\n \n \n \n\u00a0<\/p>\n<\/td>\n
\n \nThree Months Ended March 31,<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n2023<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2022<\/p>\n<\/td>\n<\/tr>\n
\n \n Net Loss to EBITDA Reconciliation:<\/span><\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet loss<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(325.4<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(40.9<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDepreciation and amortization<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n60.0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n62.3<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nInterest and other expenses, net<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n46.6<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n38.1<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nIncome tax expense (benefit)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(13.1<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n4.1<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n EBITDA<\/b><\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(231.9<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n63.6<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Adjustments<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nEquity-based compensation<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n3.1<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n3.4<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nStand-up separation & other<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n8.2<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.6<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGoodwill impairment<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n278.2<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRestructuring costs & other<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n4.5<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.3<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Total Adjustments<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n294.0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n5.3<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Adjusted EBITDA<\/b><\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n62.1<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n68.9<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Transaction Adjustments<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nStraight-line rent adjustment<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.3<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.6<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAmortization of Favorable \/ Unfavorable Leasehold Interest & ARO accretion<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.9<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.9<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nChange in fair value of warrant liabilities<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(11.8<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n Total Adjustments<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.2<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(10.3<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n Transaction Adjusted EBITDA<\/b><\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n63.3<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n58.6<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
Note: Numbers may not foot or cross-foot due to rounding<\/i><\/p>\n
<\/p>\n
View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20230504006083\/en\/<\/a><\/span><\/p>\n
Media Inquiries
\n<\/b>
Janice Clayton
\n
press@cyxtera.com<\/a><\/p>\n\nAaron Palash \/ Meaghan Repko
\n
Joele Frank, Wilkinson Brimmer Katcher
\n
(212) 355-4449<\/p>\nInvestor Inquiries
\n<\/b>
Kwang Edeker
\n
IR@cyxtera.com<\/a><\/p>\nKEYWORDS:<\/b> Florida United States North America<\/p>\n
INDUSTRY KEYWORDS:<\/b> Data Management Security Technology Software Networks Internet Hardware<\/p>\n
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<\/td>\n<\/tr>\n