EX-99.1 2 g91622exv99w1.htm PRESS RELEASE Press Release
 

Exhibit 99.1

[terremark logo]

For Immediate Release

TERREMARK AMENDS FORM 10-Q

MIAMI, FLA. (November 3, 2004) Terremark Worldwide, Inc. (AMEX:TWW), a leading operator of integrated Tier-1 Internet exchanges and best-in-class network services, today announced that it is amending its Quarterly Report on Form 10-Q for the quarter ended June 30, 2004. In the previously filed June 30, 2004 financial statements, the Company used an inappropriate assumption in estimating the fair value of certain embedded derivatives contained in the Company’s 9% Senior Convertible Notes due June 15, 2009 (the “Senior Notes”). As a result of this error, the previously filed June 30, 2004 financial statements should not be relied upon. The Company’s Form 10-Q for the quarter ended June 30, 2004 is being amended to reflect the necessary accounting adjustments and restate those financial statements. The Company is filing a current report on Form 8-K with the Securities and Exchange Commission.

The decision to restate the Company’s Form 10-Q was made by the Company after receiving a third party valuation of the embedded derivatives contained in the Senior Notes. The Company’s initial valuation model used an inappropriate assumption relating to the Company’s stock price volatility. After discussing the matter with its Audit Committee and the resulting accounting with its independent accountants, the Company determined it would be appropriate to restate its financial statements for the quarter ended June 30, 2004.

The following summarizes the restatement for the quarter ended June 30, 2004 (in thousands):

                         
    As reported
   Adjustments
   As restated
Current liabilities
     13,154       45       13,199  
Convertible debt
     70,265       (19,320 )     50,945  
Derivatives embedded within convertible debt
     12,593       19,587       32,180  
Other long-term liabilities
     14,833               14,833  
 
    
 		      
 		      
 		  
Total liabilities
     110,845       312       111,157  
 
    
 		      
 		      
 		  
Minority Interest
     1,596               1,596  
Stockholder’s deficit
     (2,729 )     (312 )     (3,041 )
 
                        
 
    
 		      
 		      
 		  
Total liabilities and equity
     109,712       —       109,712  
 
    
 		      
 		      
 		  
Loss from operations
     (4,356 )             (4,356 )
Change in estimated fair value of derivatives
     3,503       (199 )     3,304  
Interest expense
     (2,871 )     (113 )     (2,984 )
Other income/expenses
     3,459               3,459  
 
                        
 
    
 		      
 		      
 		  
Net loss
     (265 )     (312 )     (577 )
 
    
 		      
 		      
 		  

     For further information regarding the restatement of the Company’s financial statements for the quarter ended June 30, 2004, the current report on Form 8-K may be accessed through the EDGAR database maintained by the SEC at www.sec.gov.

-more-

 

 

Terremark Amends 10Q
Page 2

About Terremark Worldwide, Inc.:

Terremark Worldwide Inc. (AMEX:TWW) is a leading operator of integrated Tier-1 Internet exchanges and best-in-class network services, creating technology marketplaces in strategic global locations. Terremark is the owner and operator of the NAP of the Americas, the 5th Tier-1 Network Access Point in the world and the model for the carrier-neutral TerreNAP(sm) Data Centers the company has in Santa Clara, California (NAP of the Americas/West), in Sao Paulo, Brazil (NAP do Brasil) and in Madrid, Spain (NAP de las Americas — Madrid). The carrier-neutral NAP of the Americas is a state-of-the-art facility that provides exchange point, collocation and managed services to carriers, Internet service providers, network service providers, government entities, multi-national enterprises and other end users. The NAP, which connects fiber networks in Latin America, Europe, Asia and Africa to those in the U.S., enables customers to freely choose among the many carriers available at the TerreNAP Centers to do business. Terremark is headquartered at 2601 S. Bayshore Drive, 9th Floor, Miami, Florida USA, (305) 856-3200. More information about Terremark Worldwide can be found at http://www.terremark.com.

Statements contained in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Terremark’s actual results may differ materially from those set forth in the forward-looking statements due to a number of risks, uncertainties and other factors, as discussed in Terremark’s filings with the SEC. These factors include, without limitation, Terremark’s ability to obtain funding for its business plans, uncertainty in the demand for Terremark’s services or products and Terremark’s ability to manage its growth. Terremark does not assume any obligation to update these forward-looking statements.

For more information contact:

Terremark Worldwide Inc.
Sandra B. Gonzalez-Levy
305-860-7829
sgonzalez-levy@terremark.com

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