Savvis Wins $200 Million Contract With MoneyLine, Predicts Breakeven

📅 October 22, 2001 - Savvis Communications Corp. (savvis.net 👉 Total Reviews: 3
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👈 Official Responses: 0 -> lumen.com), a global networkservices provider, announced that it has secured a $200 million, five-yearagreement with MoneyLine Network, Inc. (moneyline.com) for networkingservices.

Savvis also announced that it now projects that it will achieve breakeventhis quarter, sooner than its previous projection of the fourth quarter of2002. Savvis will manage MoneyLine's entire network, providing networkingservices to the 6,000 client connections that MoneyLine has acquired fromBridge Information Systems, including its Telerate business, and itsEuropean and Asian businesses.
"In spite of a difficult environment for telecommunications sales, Savvis ispleased to have now secured more than $500 million dollars in minimumcommitted revenue for the next five years through its contracts with Reutersand MoneyLine," said Rob McCormick, chairman and CEO of Savvis. "Exclusiveof these two significant contracts, Savvis' revenue grew 10% from Q1 to Q2,far exceeding the sector growth rate of 2%. Savvis has succeeded in creatinga solid foundation for the future, based on both top and bottom lineperformance."
In August, MoneyLine had entered into an agreement for Savvis to provide aminimum $122 million in services, and had announced its intent to beginmigrating off the Savvis network in the second year of the five-yearcontract. The previous agreement also called for MoneyLine to purchaseSavvis' switches and customer premises infrastructure. The new $200 millionagreement calls for MoneyLine to buy services according to the followingminimums: $70 million in year one, $50 million in year two, $35 million inyear three, $25 million in year four, and $20 million in year five. The newagreement no longer includes the hardware purchase, since Savvis will manageall network equipment and services over the full five-year term.
In addition to managing a satellite network that MoneyLine also uses, Savviswill also manage, and eventually migrate, an additional 1,000 legacycircuits for MoneyLine.
"MoneyLine's decision to broaden its contract with us is a validation of ourbusiness strategy and recognition of the global reach of our network intothe financial community," said Jack Finlayson, president and chief operatingofficer for Savvis. "Savvis appreciates the confidence that MoneyLine hasplaced in us and looks forward to being their networking partner."
Commenting on the financial impact, David Frear, chief financial officer ofSavvis, said, "In the past three quarters, Savvis has dramatically improvedits EBITDA performance from an EBITDA loss of$24M in Q2 to a projection ofbreakeven in Q4."