• Revenue Increased 21%
• Adjusted EBITDA Increased 51%
• Secured Incremental $100 million of Financing
• Following the Quarter, Entered Agreement to be Acquired by Equinix

TAMPA, Fla.--(BUSINESS WIRE)--Oct. 27, 2009-- Switch & Data Facilities Company, Inc. (NASDAQ:SDXC), a leading provider of network neutral data center and Internet exchange services, today reported financial results for the three months ended September 30, 2009.

Results of Operations

Total revenues for the third quarter ended September 30, 2009 increased 21.4% to $53.5 million from $44.1 million in the comparable period in 2008. Recurring revenues, which consist of colocation and interconnection services, were $48.8 million in the third quarter 2009, an increase of 17.3% over the same period in the prior year. Non-recurring revenues in the third quarter 2009, representing one time installation fees and services, was $4.7 million in the third quarter 2009, compared to $2.5 million in the comparable period in 2008.

“Business momentum continued in the third quarter” stated Keith Olsen, President and CEO. “Our third quarter results amplify the strength of our operating model and the value we provide to customers. With increasing needs of network centric customers, our broad footprint, carrier densities and access to population centers are key value drivers for our business.”

Cost of revenues, excluding depreciation and amortization, for the third quarter 2009 was $25.9 million as compared to $23.7 million for the third quarter 2008. As a percentage of revenues, cost of revenues improved to 48.4% in the third quarter of 2009 from 53.9% in the same period of the prior year.

Sales and marketing costs for the third quarter 2009 were $4.7 million for the third quarter as compared to $4.6 million in the comparable quarter in 2008. General and administrative expenses were $5.1 million for the third quarter as compared to $4.4 million for the third quarter 2008.

Operating income increased 94.2% to $7.3 million in the third quarter of 2009 as compared to $3.8 million in the comparable period in 2008.

Adjusted EBITDA increased 50.5% to $21.0 million in the third quarter of 2009 as compared to $14.0 million in the comparable period in 2008. Adjusted EBITDA margins increased to 39.3% in the third quarter, from 31.7% in the comparable period in 2008. The Company defines Adjusted EBITDA as operating income from continuing operations, plus depreciation and amortization, stock-based compensation expense and other non-cash items such as deferred rent. The Company calculates Adjusted EBITDA margin as Adjusted EBITDA divided by total revenues. A reconciliation between GAAP information and non-GAAP information contained in this press release can be found in the table immediately following the Consolidated Statements of Cash Flow, as well as on the Company’s website in the Investor Relations section.

Net income for the period was $2.6 million. Earnings per share was $0.07 per basic and diluted share.

Balance Sheet, Cash Flows, and Business Outlook

The Company had cash and cash equivalents of $22.6 million on September 30, 2009. Bank debt outstanding on September 30, 2009 was $142.5 million. Capital expenditures in the quarter were $15.9 million and $54.3 million year-to-date.

The Company expects the following financial results for 2009:

• Total revenues are expected to be $206 million
• Adjusted EBITDA is expected to be $76 million
• Capital expenditures are projected to be $75 million

Switch and Data does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, net income (loss) from operations, cash generated from operating activities and cash used in investing activities and, as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward-looking data. The Company intends to calculate the various non-GAAP financial measures in future periods consistent with the calculation method utilized for the quarter ended September 30, 2009 as presented within this press release.

Merger with Equinix

On October 21, 2009, Switch and Data and Equinix, Inc. (Nasdaq: EQIX) entered into a definitive agreement for Equinix to acquire Switch and Data in a transaction valued at approximately $689 million in cash and stock, based on the October 20th market closing price. The parties are targeting completion of the transaction in the first quarter of 2010. The transaction will be subject to customary closing conditions, including the approval of Switch and Data’s stockholders and regulatory approvals. The merger agreement is attached as Exhibit 2.1 to the Current Report on Form 8-K that Switch and Data filed with the Securities and Exchange Commission (the "SEC") on October 22, 2009. There can be no assurances that the proposed merger will be consummated.

Important Additional Information

This document may be deemed to be solicitation material in respect of the proposed transaction between Equinix and Switch and Data. In connection with the proposed transaction involving Equinix and Switch and Data, Equinix plans to file with the SEC a Registration Statement on Form S-4 containing a Proxy Statement/Prospectus, and each of Equinix and Switch and Data plans to file with the SEC other documents regarding the proposed transaction. The definitive Proxy Statement/Prospectus will be mailed to stockholders of Switch and Data. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the Registration Statement and the Proxy Statement/Prospectus (when available) and other documents filed with the SEC by Equinix and Switch and Data through the website maintained by the SEC at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of the Registration Statement and the Proxy Statement/Prospectus (when available) and other documents filed with the SEC from Equinix by directing a request to Equinix, Inc., 301 Velocity Way, Fifth Floor, Foster City, CA 94404, Attention: Investor Relations (telephone: 888-222-1162) or going to Equinix’s corporate website at www.equinix.com, or from Switch and Data by directing a request to Switch and Data Facilities Company, Inc., 1715 Westshore Boulevard, Suite 650, Tampa, FL 33607, Attention: Investor Relations (telephone: 866-797-2633) or going to Switch and Data’s corporate website at www.switchanddata.com.

Equinix and Switch and Data, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Equinix’s directors and executive officers is contained in its annual proxy statement filed with the SEC on April 23, 2009. Information regarding Switch and Data’s directors and executive officers is contained in Switch and Data’s annual proxy statement filed with the SEC on April 6, 2009. Additional information regarding the interests of such potential participants will be included in the Proxy Statement/Prospectus and the other relevant documents filed with the SEC (when available).

Conference Call Info

The Company will host a conference call to discuss third quarter 2009 results on Tuesday, October 27, 2009 at 4:30 p.m. ET. To listen to the conference call live, please dial 888.713.4213 or 617.213.4865 (international) and provide passcode 55308985. The conference call will be webcast and can be accessed from the Company’s website at www.switchanddata.com in the Investor Relations section. A replay of the conference call will be available for one week beginning at 7:30 p.m. ET on Tuesday, October 27, 2009 until 11:59 p.m. ET on November 3, 2009. The replay can be accessed by dialing 888-286-8010 or international callers 617-801-6888 and enter passcode 44338074. The webcast will be archived on the Company’s website at www.switchanddata.com.

About the Company

Switch and Data is a premier provider of network-neutral data centers that house, power, and interconnect the Internet. Leading content companies, enterprises, and communications service providers rely on Switch and Data to connect to customers and exchange Internet traffic. Switch and Data has built a reputation for world-class service, delivered across the broadest colocation footprint and richest network of interconnections in North America. Switch and Data operates 34 sites in the U.S. and Canada, provides one of the highest customer satisfaction scores for technical and engineering support in the industry, and is home to PAIX(R) - the world's first commercial Internet exchange.

Important information about Switch and Data is routinely posted to the investor relations section of the company's website www.switchanddata.com. For copies of all Switch and Data press releases and SEC filings, please visit the website. To automatically receive Switch and Data financial news by email, please visit the website and subscribe to Email Alerts. Investors are encouraged to check Switch and Data's website frequently to access the most up-to-date information.

Forward-Looking Statements

Certain statements herein, particularly in those sections titled "Balance Sheet, Cash Flows, and Business Outlook" and "Merger with Equinix" are “forward-looking statements.” Such forward-looking statements are not historical facts but instead reflect Switch and Data’s current expectations or beliefs concerning future events and results of operations, many of which, by their nature, are inherently uncertain and outside of Switch and Data’s control. Words such as expects, believes, estimates, anticipates and similar language indicates forward-looking statements. It is possible that actual results may differ, possibly materially, from those anticipated in these forward-looking statements. Factors that might cause such differences include, but are not limited to, the failure of a condition to closing of the transaction to be satisfied; the risk that a regulatory approval that may be required for the transaction is not obtained or is obtained subject to conditions that are not anticipated; unanticipated costs or difficulties relating to the integration of Switch and Data into Equinix; and the combined company's inability to achieve anticipated cost savings or synergies. Further information concerning Switch and Data and its business, including factors that potentially could materially affect Switch and Data's financial results and conditions, as well as its other achievements, are contained in Switch and Data's filings with the SEC. Switch and Data does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

*Recurring revenues represent new service agreements entered into by new and existing customers during the given quarter. Revenues from these agreements will recur monthly over the life of the agreement.

**Non-recurring revenues represent the one-time installation fees associated with new service agreements. These one-time fees are billed to customers upon completion of the installation service and such revenues are recognized on a straight-line basis over the life of the agreement.

Adjusted EBITDA Reconciliation

The following is a reconciliation of the Company’s operating income (loss) for the periods ended September 30, 2008 and September 30, 2009 to Adjusted EBITDA.

Switch and Data uses Adjusted EBITDA:

• As measurements of operating performance because they assist management in comparing the results on a consistent basis as they remove the impact of items not directly resulting from operations;
• For planning purposes, including the preparation of its internal annual operating budget;
• To establish targets for certain management compensation; and
• To evaluate the Company’s capacity to incur and service debt, fund capital expenditures and expand the business.

Adjusted EBITDA as calculated by the Company is not necessarily comparable to similarly titled measures used by other companies. In addition, Adjusted EBITDA: (a) does not represent net income or cash flows from operating activities as defined by GAAP; (b) is not necessarily indicative of cash available to fund the Company’s cash flow needs; and (c) should not be considered as alternatives to net income, operating income, cash flows from operating activities or the Company’s other financial information as determined under GAAP.

The Company prepares Adjusted EBITDA by adjusting Adjusted EBITDA to eliminate the impact of a number of items that it does not consider indicative of its core operating performance. Investors are encouraged to evaluate each adjustment and the reasons the Company considers them appropriate. As an analytical tool, Adjusted EBITDA is subject to all of the limitations applicable to Adjusted EBITDA. In addition, in evaluating Adjusted EBITDA, investors should be aware that in the future the Company may incur expenses similar to the adjustments in this presentation. Switch and Data’s presentation of Adjusted EBITDA should not be construed as an implication that its future results will be unaffected by unusual or non-recurring items.

The Company calculates Adjusted EBITDA margin as Adjusted EBITDA divided by total revenues.

Source: Switch & Data Facilities Company, Inc.

Switch & Data Facilities Company, Inc.
Investor Relations:
Seth Potter, 646-277-1230
or
Idalia Rodriguez, 203-682-8264
ir@switchanddata.com