Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported): November 5, 2019
 
Synchronoss Technologies, Inc.
(Exact Name of Registrant as Specified in its Charter)
 
Delaware
 
000-52049
 
06-1594540
(State or Other Jurisdiction
 
(Commission
 
(IRS Employer
of Incorporation)
 
File Number)
 
Identification No.)
 
200 Crossing Boulevard, 8th Floor
 
 
Bridgewater, New Jersey
 
08807
(Address of Principal Executive Offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code: (866) 620-3940
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o                 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o                  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o                 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o                 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.0001 par value

 SNCR
The Nasdaq Stock Market, LLC














Item 2.02.                                        Results of Operations and Financial Condition.
 
On November 4, 2019, Synchronoss Technologies, Inc. (the “Company”) issued a press release (the “Press Release”) relating to its results of operations and financial condition for the quarter ended September 30, 2019. The full text of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
 
The information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
 
Item 9.01.                                        Financial Statements and Exhibits.
 
(d)
Exhibits
Exhibit
Number
 
Description
99.1
 





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date:
November 5, 2019
Synchronoss Technologies, Inc.
 
 
 
 
 
 
By:
/s/ David Clark
 
 
 
Name:
David Clark
 
 
 
Title:
Chief Financial Officer



Exhibit


Exhibit 99.1

https://cdn.kscope.io/5c7d04bd2d19584fa53409a7a7aad625-g397781mmi001a02.jpg

200 Crossing Boulevard, Bridgewater, NJ 08807
 
Synchronoss Technologies Announces Third Quarter 2019 Results; Signs New U.S.-based Tier 1 Cloud Customer; And Provides Update on relationship with Sequential Technology International

BRIDGEWATER, NJ - November 4, 2019 - Synchronoss Technologies Inc. (NASDAQ: SNCR), a global leader and innovator in cloud, messaging, digital and IoT platforms and products, today announced financial results for its second quarter ended September 30, 2019.

Glenn Lurie, president and chief executive officer, stated “Thus far, 2019 has been an extremely active year for Synchronoss and our platforms are executing well with new customers, new partners and revenue in each. We have announced partnerships with leading companies in the TMT industry such as Amazon, AT&T, BT, Microsoft, Rackspace and others embracing Synchronoss solutions to accelerate revenue growth, reduce costs, and accelerate digital transformations. Many of these partnerships are success-based revenue-share models that are expected to drive meaningful and material revenue for the company in 2020 and beyond.”

Lurie added, “We are very excited to announce our third new cloud deal of the year, this time with a major U.S.-based Tier 1 carrier. This new customer, along with our previously announced new cloud deals, demonstrate that the Synchronoss white-label cloud is in the sweet spot of what carriers need as they prepare for the widespread launch of 5G cellular and continue to seek out new sources of revenue and profitability.”

David Clark, Chief Financial Officer, stated, “As Sequential Technology International (STI) is evaluating strategic alternatives, based on this process we have decided to take a more conservative approach to our financial relationship. As a result, in the third quarter, we wrote off $26 million of STI-related accounts receivable which are now deemed uncollectible. This revenue relationship with STI falls under the new lease accounting standards, so the write-down is accounted for as a cumulative adjustment to revenue recognized in 2018 and 2019, and as such reduces third-quarter GAAP revenue from $78.2 million to $52.2 million. Going forward, quarterly revenue from STI will be recognized based on the amount of cash we collect in payment for our services, currently estimated to be in the range of $2.5-$3.0 million per quarter. We believe this will enable Synchronoss management and our investors to focus on the future of the company; in particular, execution and delivery of the transactions we have announced this year. Before the STI prior period revenue adjustment, operationally we were trending toward our original revenue and EBITDA guidance for the year.”

Third quarter highlights:

Excluding the non-recurring STI write down, revenue for the quarter would have been $78.2 million.
The non-cash $26 million write-down of STI’s accounts receivable balance, which is accounted for as a cumulative adjustment to prior revenue under the new lease accounting standards, resulted in GAAP revenue totaling $52.2 million.
GAAP net loss for the quarter, which includes the $26 million STI write-down, was $69.4 million, or $1.70 per share, compared to $54.5 million or $1.38 per share in the prior year’s third quarter. Excluding the STI write-down, Non-GAAP net loss attributable to Synchronoss was $25.3 million or 62 cents per share, compared to $33.5 million in the year-ago quarter or 84 cents per share.
Synchronoss delivered $5.8 million of adjusted EBITDA, compared to $9.4 million in the third quarter of 2018.






                               Three Months Ended September 30,
$000s
2019
2018
% Change
Revenues
$
52,210

$
83,286

(37.3
)%
Non-GAAP Revenue Excluding STI Write-Down
78,254

83,286

(6.0
)%
Net Loss
(69,432
)
(54,529
)
(27.3
)%
Non-GAAP Net Loss From Cont. Ops. Attributable to Synchronoss


(25,361
)
(33,457
)
24.2
 %
Adjusted EBITDA
5,799

9,360

(38.0
)%

                               Nine Months Ended September 30,
$000s
2019
2018
% Change
Revenues
$
218,161

$
243,737

(10.5
)%
Non-GAAP Revenue Excluding STI Write-Down
244,205

243,737

0.2
 %
Net Loss
(122,049
)
(141,839
)
(14.0
)%
Non-GAAP Net Loss From Cont. Ops. Attributable to Synchronoss

(51,276
)
(75,005
)
31.6
 %
Adjusted EBITDA
21,098

(1,413
)
NM


New Business Update

New customer agreements and partnerships that the company has completed since the last earnings announcement include:

The new major U.S.-based Tier 1 cloud customer announced today, that is expected to launch the Synchronoss white label cloud service in 2020.
A partnership with Accruent, the world’s leading provider of physical resource management solutions, to combine Synchronoss’ expertise in smart building analytics with Accruent’s asset monitoring system. The collaboration will deliver valuable insights and efficiencies to enterprises, across facilities, and greatly expand the effectiveness of enterprise IoT solutions.
A letter of intent with CityFM to combine their expertise in facility management engineering with Synchronoss’ expertise in software analytics to create an end-to-end IoT facility management offering which is scalable and is expected to drive greater efficiencies.
Indosat Ooredoo, a leading telecom service provider in Indonesia, has chosen the Synchronoss Digital Experience Platform (DXP) to deliver a unified, interconnected user experience for customers across all of its engagement channels. The Synchronoss platform will also support Indosat Ooredoo’s “future digital economy ecosystem” project, a nationwide initiative to encourage collaboration and develop new ideas, products and use cases involving IoT technology to help drive economic growth.
British American Tobacco (BAT) is launching a multi-country pilot of the Synchronoss Digital Experience Platform across 25 of its 2,000 retail locations in Europe. The Synchronoss DXP solution will provide BAT with the ability to quickly design, deploy, manage and optimize customer journeys while providing a unified experience across all its owned retail locations. This is Synchronoss’s first DXP deployment outside of its traditional TMT customer base and is expected to provide a powerful proof case for traditional brick and mortar retailers.
The first live deployments using Synchronoss DXP with Amazon are underway with carriers in Singapore and Mexico. These carriers are in the process of being integrated with Amazon and are expected to begin offering Amazon services in the fourth quarter. Three other Amazon deployments are under way and we anticipate a number of larger deployments in 2020 and beyond.
Rackspace has signed a three-year agreement to deploy the Synchronoss Smart Building solution at five of its facilities in North America, including “The Castle,” Rackspace’s 1.2 million square foot global headquarters in San Antonio, Texas.





In addition, Rackspace has licensed the company’s Financial Analytics platform to manage costs and provide visibility and deliver savings by checking and validating the accuracy of its largest and most complex third-party partner expenses and invoices.

A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is included below under the heading "Non-GAAP Financial Measures."

Conference Call Details

Synchronoss will host a conference call on Monday, November 4, 2019, at 5:00 p.m. (ET) to discuss the company’s financial results. To access this call, dial 1-201-493-6784. Additionally, a live web cast of the conference call will be available on the Investor Relations page on the company’s web site at www.synchronoss.com.

Following the conference call, a replay will be available for a limited time at 1-412-317-6671. The replay pass code is 13695428. An archived web cast of this conference call will also be available on the Investor Relations page of the company’s web site, www.synchronoss.com.

Non-GAAP Financial Measures

Synchronoss has provided in this release selected financial information that has not been prepared in accordance with GAAP. This information includes historical non-GAAP revenues, gross profit, operating income (loss), net income (loss), effective tax rate, earnings (loss) per share and cash flows from operating activities. Synchronoss uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Synchronoss’ ongoing operational performance. Synchronoss believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing its financial results with other companies in Synchronoss’ industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial results discussed above add back fair value stock-based compensation expense, acquisition-related costs which includes integration costs, restructuring and cease-use lease expense, deferred compensation expense related to earn outs and amortization of intangibles associated with acquisitions as well as certain non-recurring adjustments.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures as detailed above. As previously mentioned, a reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release.

About Synchronoss Technologies, Inc.

Synchronoss transforms the way companies create new revenue, reduce costs and delight their subscribers with cloud, messaging, digital and IoT products, supporting hundreds of millions of subscribers across the globe. Synchronoss’ secure, scalable and groundbreaking new technologies, trusted partnerships, and talented people change the way TMT customers grow their businesses. For more information, visit us at www.synchronoss.com.






Forward-looking Statements

This press release includes statements concerning Synchronoss and its future expectations, plans and prospects that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “believes,” “potential” or “continue” or other similar expressions are intended to identify forward-looking statements. Synchronoss has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. These forward-looking statements speak only as of the date of this press release and are subject to a number of risks, uncertainties and assumptions including, without limitation, risks relating to the Company’s ability to sustain or increase revenue from its larger customers and generate revenue from new customers, the Company’s expectations regarding expenses and revenue, the sufficiency of the Company’s cash resources and its ability to satisfy or refinance its existing debt obligations, the Company’s growth strategies, the anticipated trends and challenges in the business and the market in which the Company operates, the Company’s expectations regarding federal, state and foreign regulatory requirements, the pending lawsuits against the Company described in its most recent SEC filings, and other risks and factors that are described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which is on file with the SEC and available on the SEC’s website at www.sec.gov. The company does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.

Contact:

Investors:
Joe Crivelli
Vice President, Investor Relations
908-566-3131
investor@synchronoss.com

Media:                    
CCgroup
US: Diane Rose, +1 727-238-7567 or International: Anais Merlin, +44 20 3824 9219            
synchronoss@ccgrouppr.com





SYNCHRONOSS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands)
 
 
September 30, 2019
 
December 31, 2018
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
19,193

 
$
103,771

Restricted cash
 
21

 
6,089

Marketable securities, current
 
897

 
28,230

Accounts receivable, net of allowances for bad debt of $3,318 and $4,599 at September 30, 2019 and December 31, 2018, respectively
 
73,574

 
102,798

Prepaid expenses
 
17,096

 
45,058

Other current assets
 
4,934

 
8,508

Total current assets
 
115,715

 
294,454

Marketable securities, non-current
 

 
6,658

Property and equipment, net
 
35,631

 
67,937

Operating lease right-of-use assets
 
55,308

 

Goodwill
 
220,367

 
224,899

Intangible assets, net
 
81,172

 
98,706

Other assets
 
7,769

 
8,982

Equity method investment
 

 
1,619

Total assets
 
$
515,962

 
$
703,255

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
15,496

 
$
13,576

Accrued expenses
 
54,219

 
59,545

Deferred revenues, current
 
53,789

 
57,101

Short-term convertible debt, net of debt issuance costs
 

 
113,542

Total current liabilities
 
123,504

 
243,764

Lease financing obligation
 

 
9,494

Operating lease liabilities, non-current
 
62,863

 

Deferred tax liabilities
 
1,270

 
1,347

Deferred revenues, non-current
 
34,018

 
59,841

Other non-current liabilities
 
4,624

 
10,797

Redeemable noncontrolling interest
 
12,500

 
12,500

Commitments and contingencies
 
 
 
 
Series A Convertible Participating Perpetual Preferred Stock, $0.0001 par value; 10,000 shares authorized; 210 shares issued and outstanding at September 30, 2019
 
192,596

 
176,603

Stockholders’ equity:
 
 
 
 
Common stock, $0.0001 par value; 100,000 shares authorized, 51,608 and 49,836 shares issued; 44,446 and 42,674 outstanding at September 30, 2019 and December 31, 2018, respectively
 
5

 
5

Treasury stock, at cost (7,162 and 7,162 shares at September 30, 2019 and December 31, 2018, respectively)
 
(82,087
)
 
(82,087
)
Additional paid-in capital
 
528,734

 
534,673

Accumulated other comprehensive loss
 
(33,880
)
 
(30,383
)
Accumulated deficit
 
(328,185
)
 
(233,299
)
Total stockholders’ equity
 
84,587

 
188,909

Total liabilities and stockholders’ equity
 
$
515,962

 
$
703,255






SYNCHRONOSS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
Net revenues
$
52,210

 
$
83,286

 
$
218,161

 
$
243,737

Costs and expenses:
 
 
 
 
 
 
 
Cost of revenues
35,602

 
43,714

 
107,958

 
127,788

Research and development
18,575

 
18,684

 
57,282

 
59,789

Selling, general and administrative
30,536

 
27,320

 
82,862

 
99,368

Restructuring charges
(39
)
 
4,539

 
738

 
8,425

Depreciation and amortization
18,508

 
23,658

 
58,920

 
70,330

Total costs and expenses
103,182

 
117,915

 
307,760

 
365,700

Loss from continuing operations
(50,972
)
 
(34,629
)
 
(89,599
)
 
(121,963
)
Interest income
228

 
203

 
716

 
7,518

Interest expense
(203
)
 
(1,370
)
 
(1,251
)
 
(3,935
)
Gain on extinguishment of debt
5

 

 
822

 

Other (expense) income, net
(422
)
 
(13,439
)
 
17

 
(9,180
)
Equity method investment (loss) income

 
283

 
(1,619
)
 
71

Loss from continuing operations, before taxes
(51,364
)
 
(48,952
)
 
(90,914
)
 
(127,489
)
(Provision) benefit for income taxes
(9,849
)
 
2,308

 
(6,614
)
 
1,604

Net loss
(61,213
)
 
(46,644
)
 
(97,528
)
 
(125,885
)
Net loss attributable to redeemable noncontrolling interests
(25
)
 
(422
)
 
(931
)
 
2,122

Preferred stock dividend
(8,194
)
 
(7,463
)
 
(23,590
)
 
(18,076
)
Net loss attributable to Synchronoss
$
(69,432
)
 
$
(54,529
)
 
$
(122,049
)
 
$
(141,839
)
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
Basic
$
(1.70
)
 
$
(1.38
)
 
$
(3.01
)
 
$
(3.51
)
Diluted
$
(1.70
)
 
$
(1.38
)
 
$
(3.01
)
 
$
(3.51
)
Weighted-average common shares outstanding:
 
 
 
 
 
 
 
Basic
40,910

 
39,612

 
40,564

 
40,405

Diluted
40,910

 
39,612

 
40,564

 
40,405








 












SYNCHRONOSS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
 
Nine Months Ended September 30,
 
2019
 
2018
Operating activities: 
 
 
 
Net loss
$
(97,528
)
 
$
(125,885
)
Adjustments to reconcile Net Loss to net cash used in operating activities:
 
 
 
Depreciation and amortization
58,921

 
70,330

Change in fair value of financial instruments

 
(3,849
)
Amortization of debt issuance costs
272

 
1,060

(Gain) loss on extinguishment of debt
(822
)
 

Accrued PIK interest*

 
(7,037
)
Allowance for loan losses*

 
18,225

(Earnings) loss from equity method investments*
1,619

 
(71
)
Loss (Gain) on disposals
15

 
277

Amortization of bond premium
(34
)
 
75

Deferred income taxes
(25
)
 
(1,648
)
Stock-based compensation
17,033

 
22,040

Cumulative adjustment to STI receivable
26,044

 

ROU Asset Impairment
6,268

 

Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net of allowance for doubtful accounts
3,180

 
28,789

Prepaid expenses and other current assets
34,052

 
(12,844
)
Other assets
1,966

 
947

Accounts payable
2,615

 
8,195

Accrued expenses
(9,418
)
 
(24,539
)
Other liabilities
(3,736
)
 
(3,886
)
Deferred revenues
(28,583
)
 
(30,841
)
Net cash provided by (used for) operating activities
11,839

 
(60,662
)
Investing activities:
 
 
 
Purchases of property and equipment
(7,077
)
 
(8,565
)
Purchases of capitalized software
(9,289
)
 
(11,012
)
Purchases of marketable securities available for sale
(47,703
)
 
(15,784
)
Maturity of marketable securities available for sale
81,794

 
3,050

Business acquired, net of cash

 
(9,734
)
Net cash used for investing activities
17,725

 
(42,045
)
Financing activities:
 
 
 
Extinguishment of outstanding Convertible Senior Notes
(112,993
)
 

Proceeds from issuance of preferred stock

 
86,220

Preferred dividend payment
(7,075
)
 

Payments for finance leases
(925
)
 
(1,018
)
Net cash (used for) provided by financing activities
(120,993
)
 
85,202

Effect of exchange rate changes on cash
783

 
(1,805
)
Net decrease in cash, restricted cash and cash equivalents
(90,646
)
 
(19,310
)
Cash, restricted cash and cash equivalents, beginning of period
109,860

 
246,125

Cash, restricted cash and cash equivalents, end of period
$
19,214

 
$
226,815







SYNCHRONOSS TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
 
 
Three Months Ended Sep 30,
 
Nine Months Ended Sep 30,
 
 
2019
 
2018
 
2019
 
2018
Non-GAAP financial measures and reconciliation:
 
 
 
 
 
 
 
 
GAAP Revenue
 
$
52,210

 
$
83,286

 
$
218,161

 
$
243,737

Less: Cost of revenues
 
35,602

 
43,714

 
107,958

 
127,788

Gross Profit
 
16,608

 
39,572

 
110,203

 
115,949

Add / (Less):
 
 
 
 
 
 
 
 
Stock-based compensation expense
 
803

 
1,035

 
2,147

 
3,447

Restructuring and cease-use lease expense
 
141

 

 
405

 

Cumulative adjustment to STI receivable
 
26,044

 
 
 
26,044

 
 
Adjusted Gross Profit
 
$
43,596

 
$
40,607

 
$
138,799

 
$
119,396

Adjusted Gross Margin
 
83.5
%
 
48.8
%
 
63.6
%
 
49.0
%
 
 
 
 
 
 
 
 
 
GAAP loss from continuing operations
 
(50,972
)
 
(34,629
)
 
(89,599
)
 
(121,963
)
Add / (Less):
 
 
 
 
 
 
 
 
Stock-based compensation expense
 
6,000

 
7,216

 
17,028

 
22,038

Acquisition costs
 

 
38

 
(230
)
 
149

Restructuring and cease-use lease expense
 
6,215

 
4,539

 
7,429

 
8,425

Amortization expense
 
5,808

 
8,472

 
19,072

 
25,122

Cumulative adjustment to STI receivable
 
26,044

 

 
26,044

 

One-Time Expenses due to Restatement, etc.
 
4

 
3,638

 
1,506

 
19,608

Non-GAAP loss from continuing operations
 
$
(6,901
)
 
$
(10,726
)
 
$
(18,750
)
 
$
(46,621
)
 
 
 
 
 
 
 
 
 
GAAP Net loss attributable to Synchronoss
 
$
(69,432
)
 
$
(54,529
)
 
$
(122,049
)
 
$
(141,839
)
Add / (Less):
 
 
 
 
 
 
 
 
Stock-based compensation expense
 
6,000

 
7,216

 
17,028

 
22,038

Acquisition costs
 

 
38

 
(230
)
 
149

Restructuring and cease-use lease expense
 
6,215

 
4,539

 
7,429

 
8,425

Amortization expense
 
5,808

 
8,472

 
19,072

 
25,122

Non-GAAP Expenses attributable to Non-Controlling Interest
 

 
(523
)
 
(76
)
 
(1,269
)
One-Time Expenses due to Restatement, etc.
 
4

 
3,638

 
1,506

 
19,608

Cumulative adjustment to STI receivable
 
26,044

 

 
26,044

 

Income Tax Effect at Statutory Tax Rates
 

 
(2,308
)
 

 
(7,239
)
Non-GAAP Net loss from continuing operations attributable to Synchronoss
 
$
(25,361
)
 
$
(33,457
)
 
$
(51,276
)
 
$
(75,005
)
 
 
 
 
 
 
 
 
 
Diluted Non-GAAP Net loss from continuing operations per share
 
$
(0.62
)
 
$
(0.84
)
 
$
(1.26
)
 
$
(1.86
)
 
 
 
 
 
 
 
 
 
Weighted shares outstanding - Basic
 
40,910

 
39,612

 
40,564

 
40,405









SYNCHRONOSS TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)

 
 
Three Months Ended
 
Nine Months Ended
 
 
Sep 30, 2018
 
Dec 31, 2018
 
Mar 31, 2019
 
Jun 30, 2019
 
Sep 30, 2019
 
Sep 30, 2019
 
Sep 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income attributable to Synchronoss
 
$
(54,529
)
 
$
(101,909
)
 
$
(27,587
)
 
$
(25,030
)
 
$
(69,432
)
 
$
(122,049
)
 
$
(141,839
)
Add / (Less):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring and cease-use lease expense
 
4,539

 
3,950

 
740

 
474

 
6,215

 
7,429

 
8,425

Net change in contingent consideration obligation
 

 

 

 

 

 

 

Depreciation and amortization
 
23,658

 
47,324

 
20,143

 
20,269

 
18,508

 
58,920

 
70,330

Interest income
 
(203
)
 
(252
)
 
(189
)
 
(299
)
 
(228
)
 
(716
)
 
(7,518
)
Interest Expense
 
1,370

 
976

 
585

 
463

 
203

 
1,251

 
3,935

Gain on Extinguishment of debt
 

 
(1,760
)
 
(387
)
 
(430
)
 
(5
)
 
(822
)
 

Other Income (expense), net
 
13,439

 
65,737

 
(463
)
 
24

 
422

 
(17
)
 
9,180

Equity method investment income (loss), net
 
(283
)
 
28,671

 
1,243

 
376

 

 
1,619

 
(71
)
Benefit for income taxes
 
(2,308
)
 
(16,290
)
 
(1,391
)
 
(1,844
)
 
9,849

 
6,614

 
(1,604
)
Net (loss) income attributable to noncontrolling interests
 
422

 
(6,715
)
 
313

 
593

 
25

 
931

 
(2,122
)
Preferred dividend
 
7,463

 
7,517

 
7,537

 
7,859

 
8,194

 
23,590

 
18,076

Stock-based compensation expense
 
7,216

 
5,566

 
5,554

 
5,474

 
6,000

 
17,028

 
22,038

Acquisition costs
 
38

 
109

 
(188
)
 
(42
)
 

 
(230
)
 
149

Integration
 

 

 

 

 

 

 

Cumulative adjustment to STI receivable
 

 

 

 

 
26,044

 
26,044

 

One-Time Expenses due to Restatement, etc.
 
3,638

 
800

 
720

 
782

 
4

 
1,506

 
19,608

Net income from discontinued operations, net of taxes
 

 
(18,288
)
 

 

 

 

 

Reclassification of expenses
 
4,900

 

 

 

 

 

 

Adjusted EBITDA (non-GAAP)
 
$
9,360

 
$
15,436

 
$
6,630

 
$
8,669

 
$
5,799

 
$
21,098

 
$
(1,413
)


 
 
Three Months Ended Sep 30,
 
Nine Months Ended Sep 30,
 
 
2019
 
2018
 
2019
 
2018
Net Cash (used in) provided by operating activities
 
$
(6,725
)
 
$
10,719

 
$
11,839

 
$
(60,662
)
Add / (Less):
 
 
 
 
 
 
 
 
Capitalized software
 
(3,330
)
 
(2,811
)
 
(9,289
)
 
(11,012
)
Property and equipment
 
(2,137
)
 
(4,745
)
 
(7,077
)
 
(8,565
)
Free Cashflow
 
$
(12,192
)
 
$
3,163

 
$
(4,527
)
 
$
(80,239
)
Add: One-Time Expenses due to Restatement, etc.
 
4

 
3,638

 
1,506

 
19,608

Adjusted Free Cashflow
 
$
(12,188
)
 
$
6,801

 
$
(3,021
)
 
$
(60,631
)