NaviSite announced it’s Third Quarter Financial Results for 2010. Bookings of recurring revenue of $734K, up 47% from the prior year. Initial gross cash proceeds of $56.9 million with up to $4.5 million to be received in the future upon release of escrow balances.
The following results of operations reported exclude the results of discontinued operations for the periods presented.
— Recurring hosting revenue was $31.0 million for the third quarter, an increase of 4% compared to $29.8 million for the third quarter of fiscal year 2009. The third quarter of fiscal year 2009 included $0.8 million of hosting revenue from NaviSite’s former Los Angeles data center, which lease NaviSite did not renew at the end of the third quarter of fiscal year 2009. Excluding the Los Angeles hosting revenue in the third quarter of fiscal year 2009, recurring hosting revenue increased 7%.
— Total revenue for the quarter ended on April 30, 2010, was $31.4 million an increase of 1.5% compared to $31.0 million in the third quarter of fiscal year 2009. Excluding the revenue from the non-renewal of the Los Angeles data center revenue increased 4% over the prior year.
— Gross margin improved to 37% for the third quarter of fiscal year 2010, representing a one-percentage-point increase from the 36% recorded in the third quarter of fiscal year 2009.
— Income from operations improved 2% for the third quarter of fiscal year 2010, increasing to $0.78 million compared to $0.77 million in the third quarter of fiscal year 2009.
— EBITDA, excluding impairment costs, stock-based compensation, severance, discontinued operations, related gain on discontinued operations, and other non-operational charges (“adjusted EBITDA”), for the third quarter was $6.0 million, a 6% decrease compared to $6.3M for the third quarter of fiscal year 2009. Excluding the impact from the non-renewal of our Los Angeles data center in fiscal year 2009 and the $0.56 million impact from the conversion of our UK data center lease to an operating lease at the end of the second quarter of fiscal year 2010, adjusted EBITDA increased 8% over the prior period in fiscal year 2009.
— Net loss from continuing operations in the third quarter was $0.7 million as compared to a loss of $1.8 million in the comparable period in fiscal year 2009. Net loss from discontinued operations for the third quarter was $1.8 million as compared to a loss of $0.6 million in the third quarter of fiscal year 2009. Net income available to common shareholders for the third quarter including the gain on sale of assets was $17.3m, or $0.47 per share, compared to a loss of $3.2 million, or $(0.09) per share, in the third quarter of fiscal year 2009.
— Cash generated from operating activities for the third quarter of fiscal year 2010 was $4.0 million, representing a decrease of 26% from the $5.4 million recorded in the third quarter of fiscal year 2009.
— Senior leverage ratio (Sr. Debt/trailing twelve months adjusted EBITDA) decreased from 3.3x at the end of fiscal year 2009 to 2.1x at the end of the third quarter of fiscal year 2010.
“With the sale of the two data centers and the former netASPx business, we made significant progress in our strategy to deleverage the balance sheet and focus our marketing and sales efforts to the enterprise customer,” said Arthur Becker, NaviSite’s Chief Executive Officer. “Our strong bookings, success in closing larger enterprise deals, low churn and investments in our proprietary enterprise cloud infrastructure are anticipated to translate into increased revenue and EBITDA growth in the coming quarters.”
