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): March 10, 2020
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 March 9, 2020, Synchronoss Technologies, Inc. (the “Company”) issued a press release (the “Press Release”) relating to its results of operations and financial condition for the quarter and year ended December 31, 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: | March 10, 2020 | Synchronoss Technologies, Inc. | ||
By: | /s/ David Clark | |||
Name: | David Clark | |||
Title: | Chief Financial Officer | |||
Exhibit 99.1
200 Crossing Boulevard, Bridgewater, NJ 08807
Synchronoss Technologies Announces Fourth Quarter and Full Year 2019 Financial Results; AT&T set to deploy the Synchronoss Personal Cloud Solution
BRIDGEWATER, NJ - March 9, 2020 - (GLOBE NEWSWIRE) -- 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 fourth quarter and year ended December 31, 2019. Synchronoss also announced this morning that AT&T is set to deploy the Synchronoss Personal Cloud Solution for AT&T Mobility wireless customers.
Financial highlights:
• | Revenue for the quarter was $90.6 million. For the full year, revenue was $308.7 million. |
• | GAAP net loss for the quarter was $14.7 million. For the full year, GAAP net loss was $136.7 million. |
• | Synchronoss delivered $6.5 million of adjusted EBITDA for the quarter. For the full year, adjusted EBITDA was $27.6 million. |
• | Total costs and expenses were down 13 percent in the fourth quarter and 15 percent for the year. |
• | Synchronoss ended the year with $39.0 million of cash on the balance sheet. |
Three Months Ended December 31, | ||||||||||
$000s | 2019 | 2018 | % Change | |||||||
Revenues | $ | 90,588 | $ | 82,102 | 10.3 | % | ||||
Net Loss Attributable to Synchronoss | (14,671 | ) | (101,909 | ) | 85.6 | % | ||||
Non-GAAP Net Loss From Cont. Ops. Attributable to Synchronoss | (2,502 | ) | (80,837 | ) | 96.9 | % | ||||
Adjusted EBITDA | 6,486 | 15,436 | (58.0 | )% | ||||||
Twelve Months Ended December 31, | ||||||||||
$000s | 2019 | 2018 | % Change | |||||||
Revenues | $ | 308,749 | $ | 325,839 | (5.2 | )% | ||||
Net Loss Attributable to Synchronoss | (136,720 | ) | (243,748 | ) | 43.9 | % | ||||
Non-GAAP Net Loss From Cont. Ops. Attributable to Synchronoss | (53,777 | ) | (176,914 | ) | 69.6 | % | ||||
Adjusted EBITDA | 27,584 | 14,023 | 96.7 | % | ||||||
Glenn Lurie, president and chief executive officer, stated “Synchronoss finished 2019 on a strong note, with our highest revenue quarter in two years. And 2020 is off to a good start, as we have already launched two new cloud customers - TracFone and Assurant - and we are launching AT&T this week. In addition, our advanced messaging work with the CCMI joint venture of AT&T, Sprint, T-Mobile, and Verizon is well underway, and we are already seeing upside to the original contract in the form of additional technology integration and professional services work.”
Mr. Lurie added, “With the new business wins we closed in 2019, we have the business in hand along with the quality of our sales funnel to energize profitable growth for the next several years. We have worked hard to right size our expense base and see additional opportunities to reduce costs and grow operating margins in the new year."
David Clark, chief financial officer, added, “Synchronoss ended the year with $39 million of cash, up from $20 million at the end of the third quarter. In 2019, we reduced total costs and expenses 13 percent, which drove a significant improvement in financial results. For the full year, Adjusted EBITDA was $27.6 million, up from $14.0 million in 2018. We believe we can deliver approximately $15 million of additional cost savings in 2020.”
New Business Update
New customer agreements and partnerships that the company has completed since the last earnings announcement include:
• | AT&T Mobility is launching the Synchronoss Personal Cloud solution for its wireless customers. The Synchronoss Personal Cloud solution will fully integrate into a suite of AT&T services, leveraging the cloud to vastly improve the subscriber’s overall experience. It will also give AT&T the ability to provide and monetize new value-added services to its wireless customers. |
• | Synchronoss’ Personal Cloud Solution has been fully integrated with Pocket Geek by Assurant to provide an enhanced device and content protection solution to a leading North American carrier. |
• | In November, the company was selected by the Cross-Carrier Messaging Initiative (CCMI), a joint venture of AT&T, Sprint, T-Mobile, and Verizon, to deliver an advanced mobile messaging experience across all four mobile networks. |
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, March 9, 2020, 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 13698084. 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 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.
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands)
December 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 38,990 | $ | 103,771 | |||
Restricted cash* | 11 | 6,089 | |||||
Marketable securities, current | 11 | 28,230 | |||||
Accounts receivable, net of allowances for bad debt of $1,864 and $4,599 at December 31, 2019 and December 31, 2018, respectively** | 65,863 | 102,798 | |||||
Prepaid expenses | 24,224 | 45,058 | |||||
Other current assets | 4,792 | 8,508 | |||||
Total current assets | 133,891 | 294,454 | |||||
Marketable securities, non-current | — | 6,658 | |||||
Property and equipment, net | 26,525 | 67,937 | |||||
Operating lease right-of-use assets | 53,965 | — | |||||
Goodwill | 222,969 | 224,899 | |||||
Intangible assets, net | 77,613 | 98,706 | |||||
Other assets | 8,054 | 8,982 | |||||
Equity method investment | — | 1,619 | |||||
Total assets | $ | 523,017 | $ | 703,255 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | 21,551 | 13,576 | |||||
Accrued expenses | 56,810 | 59,545 | |||||
Deferred revenues, current | 65,858 | 57,101 | |||||
Short-term convertible debt, net of debt issuance costs | — | 113,542 | |||||
Total current liabilities | 144,219 | 243,764 | |||||
Lease financing obligation | — | 9,494 | |||||
Operating lease liabilities, non-current | 60,976 | — | |||||
Deferred tax liabilities | 1,098 | 1,347 | |||||
Deferred revenues, non-current | 21,941 | 59,841 | |||||
Other non-current liabilities | 4,588 | 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; 217 shares issued and outstanding at December 31, 2019 | 200,865 | 176,603 | |||||
Stockholders’ equity: | |||||||
Common stock, $0.0001 par value; 100,000 shares authorized, 51,704 and 49,836 shares issued; 44,542 and 42,674 outstanding at December 31, 2019 and December 31, 2018, respectively | 5 | 5 | |||||
Treasury stock, at cost (7,162 and 7,162 shares at December 31, 2019 and December 31, 2018, respectively) | (82,087 | ) | (82,087 | ) | |||
Additional paid-in capital | 525,739 | 534,673 | |||||
Accumulated other comprehensive loss | (32,515 | ) | (30,383 | ) | |||
Accumulated deficit | (334,312 | ) | (233,299 | ) | |||
Total stockholders’ equity | 76,830 | 188,909 | |||||
Total liabilities and stockholders’ equity | $ | 523,017 | $ | 703,255 | |||
SYNCHRONOSS TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2017 | ||||||||||||||||
Net revenues | $ | 90,588 | $ | 82,102 | $ | 308,749 | $ | 325,839 | $ | 402,361 | ||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of revenues* | 42,449 | 31,014 | 150,407 | 158,802 | 181,453 | |||||||||||||||
Research and development | 18,286 | 19,383 | 75,568 | 79,172 | 90,850 | |||||||||||||||
Selling, general and administrative | 29,909 | 22,744 | 112,771 | 122,112 | 154,037 | |||||||||||||||
Restructuring charges | 17 | 3,950 | 755 | 12,375 | 10,739 | |||||||||||||||
Depreciation and amortization | 18,116 | 47,324 | 77,036 | 117,654 | 94,884 | |||||||||||||||
Total costs and expenses | 108,777 | 124,415 | 416,537 | 490,115 | 531,963 | |||||||||||||||
Loss from continuing operations | (18,189 | ) | (42,313 | ) | (107,788 | ) | (164,276 | ) | (129,602 | ) | ||||||||||
Interest income | 542 | 252 | 1,258 | 7,770 | 12,502 | |||||||||||||||
Interest expense | (104 | ) | (976 | ) | (1,355 | ) | (4,911 | ) | (55,771 | ) | ||||||||||
Gain (loss) on extinguishment of debt | — | 1,760 | 822 | 1,760 | (29,413 | ) | ||||||||||||||
Other Income (expense), net | 7,372 | (65,737 | ) | 7,389 | (74,917 | ) | (17,678 | ) | ||||||||||||
Equity method investment loss | — | (28,671 | ) | (1,619 | ) | (28,600 | ) | (9,125 | ) | |||||||||||
Loss from continuing operations, before taxes | (10,379 | ) | (135,685 | ) | (101,293 | ) | (263,174 | ) | (229,087 | ) | ||||||||||
Benefit (provision) for income taxes | 4,446 | 16,290 | (2,167 | ) | 17,894 | 34,863 | ||||||||||||||
Net loss from continuing operations | (5,933 | ) | (119,395 | ) | (103,460 | ) | (245,280 | ) | (194,224 | ) | ||||||||||
Net income from discontinued operations, net of tax** | — | 18,288 | — | 18,288 | 75,495 | |||||||||||||||
Net loss | (5,933 | ) | (101,107 | ) | (103,460 | ) | (226,992 | ) | (118,729 | ) | ||||||||||
Net (income) loss attributable to redeemable noncontrolling interests | (194 | ) | 6,715 | (1,126 | ) | 8,837 | 9,291 | |||||||||||||
Preferred stock dividend | (8,544 | ) | (7,517 | ) | (32,134 | ) | (25,593 | ) | — | |||||||||||
Net loss attributable to Synchronoss | $ | (14,671 | ) | $ | (101,909 | ) | $ | (136,720 | ) | $ | (243,748 | ) | $ | (109,438 | ) | |||||
Earnings per share | ||||||||||||||||||||
Basic: | ||||||||||||||||||||
Continuing operations | $ | (0.36 | ) | $ | (3.01 | ) | $ | (3.36 | ) | $ | (6.51 | ) | $ | (4.14 | ) | |||||
Discontinued operations** | — | 0.45 | — | 0.46 | 1.69 | |||||||||||||||
$ | (0.36 | ) | $ | (2.56 | ) | $ | (3.36 | ) | $ | (6.05 | ) | $ | (2.45 | ) | ||||||
Diluted: | ||||||||||||||||||||
Continuing operations | $ | (0.36 | ) | $ | (3.01 | ) | $ | (3.36 | ) | $ | (6.51 | ) | $ | (4.14 | ) | |||||
Discontinued operations** | — | 0.45 | — | 0.46 | 1.69 | |||||||||||||||
$ | (0.36 | ) | $ | (2.56 | ) | $ | (3.36 | ) | $ | (6.05 | ) | $ | (2.45 | ) | ||||||
Weighted-average common shares outstanding: | ||||||||||||||||||||
Basic | 41,085 | 39,885 | 40,694 | 40,277 | 44,669 | |||||||||||||||
Diluted | 41,085 | 39,885 | 40,694 | 40,277 | 44,669 | |||||||||||||||
SYNCHRONOSS TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
Twelve Months Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Operating activities: | |||||||||||
Net loss continuing operations | $ | (103,460 | ) | $ | (245,280 | ) | $ | (194,224 | ) | ||
Net loss from discontinued operations | — | — | 75,495 | ||||||||
Gain (loss) on Sale of discontinued operations, net of tax | — | 18,288 | (122,842 | ) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 77,037 | 97,092 | 93,924 | ||||||||
Goodwill impairment | — | 9,100 | — | ||||||||
Impairment of long-lived assets and capitalized software | — | 11,462 | 960 | ||||||||
Change in fair value of financial instruments | (163 | ) | (3,849 | ) | 4,367 | ||||||
Amortization of debt issuance costs | 285 | 1,294 | 12,771 | ||||||||
(Gain) loss on extinguishment of debt | (822 | ) | (1,760 | ) | 29,413 | ||||||
Accrued PIK interest | — | (7,037 | ) | (12,090 | ) | ||||||
Allowance for loan losses | — | 84,314 | 14,562 | ||||||||
Loss (earnings) from Equity method investments | 1,619 | 28,600 | 9,125 | ||||||||
(Gain) loss on Disposals of fixed assets | 15 | 277 | (4,947 | ) | |||||||
Discontinued operations non-cash and working capital adjustments* | — | — | 48,647 | ||||||||
(Gain) loss on Disposals of intangible assets | (5,429 | ) | — | — | |||||||
Amortization of bond premium | (34 | ) | 107 | 244 | |||||||
Deferred income taxes | (222 | ) | (12,350 | ) | 19,243 | ||||||
Non-cash interest on leased facility | — | 1,203 | |||||||||
Stock-based compensation | 22,287 | 27,604 | 22,495 | ||||||||
Contingent consideration obligation | — | — | (2,711 | ) | |||||||
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 | 10,891 | (21,521 | ) | 29,283 | |||||||
Prepaid expenses and other current assets | 27,215 | (5,315 | ) | (5,513 | ) | ||||||
Other assets | 1,710 | 973 | 3,237 | ||||||||
Accounts payable | 8,879 | 6,846 | (9,098 | ) | |||||||
Accrued expenses | (7,059 | ) | (18,068 | ) | (4,949 | ) | |||||
Other liabilities | (4,362 | ) | (4,675 | ) | (3,337 | ) | |||||
Deferred revenues | (28,856 | ) | 2,529 | (23,506 | ) | ||||||
Net cash provided by (used in) operating activities | 31,843 | (31,369 | ) | (18,248 | ) | ||||||
Investing activities: | |||||||||||
Purchases of fixed assets | (8,183 | ) | (11,656 | ) | (12,151 | ) | |||||
Purchases of intangible assets and capitalized software | (13,008 | ) | (14,372 | ) | (9,119 | ) | |||||
Proceeds from the sale of intangibles | 5,429 | — | — | ||||||||
Proceeds from the sale of Speechcycle | — | — | 13,500 | ||||||||
Purchases of marketable securities available for sale | (51,745 | ) | (36,789 | ) | (219 | ) | |||||
Maturity of marketable securities available for sale | 86,884 | 4,865 | 12,371 | ||||||||
Proceeds from the sale of discontinued operations | — | — | 928,171 | ||||||||
Equity investment | — | 404 | 608 | ||||||||
Investing activities in discontinued operations* | — | — | (13,721 | ) | |||||||
Investment in note receivable | — | — | (6,187 | ) | |||||||
Business acquired, net of cash | — | (9,734 | ) | (815,008 | ) | ||||||
Net cash provided by (used in) investing activities | 19,377 | (67,282 | ) | 98,245 | |||||||
Financing activities: | |||||||||||
Share-based compensation-related proceeds, net of taxes paid on withholding shares | 39 | — | 2,584 | ||||||||
Taxes paid on withholding shares | (15 | ) | — | (442 | ) | ||||||
Payments on contingent consideration | — | — | (122 | ) | |||||||
Debt issuance costs related to the Credit Facility | — | — | (3,692 | ) | |||||||
Debt issuance costs related to long-term debt | — | — | (19,887 | ) | |||||||
Debt amendment costs related to long-term debt | — | — | (16,776 | ) | |||||||
Proceeds from issuance of convertible notes | — | — | 900,000 | ||||||||
Retirement of Convertible Senior Notes & related costs | (113,006 | ) | (113,696 | ) | — | ||||||
Repayment of long-term debt | — | — | (900,000 | ) | |||||||
Borrowings on revolving line of credit | 2,000 | — | |||||||||
Repayment of revolving line of credit | (2,000 | ) | — | (29,000 | ) | ||||||
Excess tax benefits from stock option exercises | — | — | 17 | ||||||||
Proceeds from the sale of treasury stock in connection with an employee stock purchase plan | — | — | 1,047 | ||||||||
Proceeds from issuance of preferred stock | — | 86,220 | — | ||||||||
Preferred dividend payment | (7,075 | ) | (7,075 | ) | — | ||||||
Proceeds from mandatorily redeemable financial instruments | — | — | 33,592 | ||||||||
Payments on capital obligations | (1,200 | ) | (1,334 | ) | (2,985 | ) | |||||
Net cash used in financing activities | (121,257 | ) | (35,885 | ) | (35,664 | ) | |||||
Effect of exchange rate changes on cash | (822 | ) | (1,729 | ) | (9,641 | ) | |||||
Net decrease in cash and cash equivalents | (70,859 | ) | (136,265 | ) | 34,692 | ||||||
Cash and cash equivalents, beginning of period | 109,860 | 246,125 | 211,433 | ||||||||
Cash and cash equivalents, end of period | $ | 39,001 | $ | 109,860 | $ | 246,125 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for income taxes | $ | 3,598 | $ | 22,549 | $ | 7,612 | |||||
Cash refund for income taxes | $ | 20,733 | $ | — | $ | — | |||||
Cash paid for interest | $ | 666 | $ | 3,258 | $ | 55,957 | |||||
Supplemental disclosures of non-cash investing and financing activities: | |||||||||||
Accrued dividends on Series A Convertible Participating Perpetual Preferred Stock | $ | 22,005 | $ | 7,075 | $ | — | |||||
Issuance of common stock in connection with Intralinks acquisition | $ | — | $ | — | $ | 4,700 | |||||
Cash and cash equivalents per Consolidated Balance Sheets | $ | 38,990 | $ | 103,771 | $ | 156,299 | |||||
Restricted cash | $ | 11 | $ | 6,089 | $ | 89,826 | |||||
Total cash, cash equivalents and restricted cash | $ | 39,001 | $ | 109,860 | $ | 246,125 | |||||
SYNCHRONOSS TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
Three Months Ended Dec 31, | Twelve Months Ended Dec 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Non-GAAP financial measures and reconciliation: | ||||||||||||||||
GAAP Revenue | $ | 90,588 | $ | 82,102 | $ | 308,749 | $ | 325,839 | ||||||||
Less: Cost of revenues | 42,449 | 31,014 | 150,407 | 158,802 | ||||||||||||
Gross Profit | 48,139 | 51,088 | 158,342 | 167,037 | ||||||||||||
Add / (Less): | ||||||||||||||||
Stock-based compensation expense | 782 | 1,035 | 2,928 | 3,447 | ||||||||||||
Restructuring and cease-use lease expense | — | 405 | ||||||||||||||
Cumulative adjustment to STI receivable | — | 26,044 | ||||||||||||||
Adjusted Gross Profit | $ | 48,921 | $ | 52,123 | $ | 187,719 | $ | 170,484 | ||||||||
Adjusted Gross Margin | 54.0 | % | 63.5 | % | 60.8 | % | 52.3 | % | ||||||||
GAAP Net loss attributable to Synchronoss | $ | (14,671 | ) | $ | (101,909 | ) | $ | (136,720 | ) | $ | (243,748 | ) | ||||
Add / (Less): | ||||||||||||||||
Stock-based compensation expense | 5,222 | 7,216 | 22,250 | 22,038 | ||||||||||||
Acquisition costs | — | 38 | (230 | ) | 149 | |||||||||||
Restructuring and cease-use lease expense | 17 | 4,539 | 7,446 | 8,425 | ||||||||||||
Amortization expense | 5,610 | 8,472 | 24,683 | 25,122 | ||||||||||||
Non-GAAP Expenses attributable to Non-Controlling Interest | — | (523 | ) | (76 | ) | (1,269 | ) | |||||||||
One-Time Expenses due to Restatement, etc. | 1,320 | 3,638 | 2,826 | 19,608 | ||||||||||||
Cumulative adjustment to STI receivable | — | 26,044 | ||||||||||||||
Income Tax Effect at Statutory Tax Rates | — | (2,308 | ) | — | (7,239 | ) | ||||||||||
Non-GAAP Net loss from continuing operations attributable to Synchronoss | $ | (2,502 | ) | $ | (80,837 | ) | $ | (53,777 | ) | $ | (176,914 | ) | ||||
Diluted Non-GAAP Net loss from continuing operations per share | $ | (0.06 | ) | $ | (2.04 | ) | $ | (1.32 | ) | $ | (4.39 | ) | ||||
Weighted shares outstanding - Basic | 41,085 | 39,612 | 40,694 | 40,277 | ||||||||||||
SYNCHRONOSS TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
Dec 31, 2018 | Mar 31, 2019 | Jun 30, 2019 | Sep 30, 2019 | Dec 31, 2019 | Dec 31, 2019 | Dec 31, 2018 | ||||||||||||||||||||||
Net (loss) income attributable to Synchronoss | $ | (101,909 | ) | $ | (27,587 | ) | $ | (25,030 | ) | $ | (69,432 | ) | $ | (14,671 | ) | $ | (136,720 | ) | $ | (243,748 | ) | |||||||
Add / (Less): | ||||||||||||||||||||||||||||
Restructuring and cease-use lease expense | 3,950 | 740 | 474 | 6,215 | 17 | 7,446 | 12,375 | |||||||||||||||||||||
Depreciation and amortization | 47,324 | 20,143 | 20,269 | 18,508 | 18,116 | 77,036 | 117,654 | |||||||||||||||||||||
Interest income | (252 | ) | (189 | ) | (299 | ) | (228 | ) | (542 | ) | (1,258 | ) | (7,770 | ) | ||||||||||||||
Interest Expense | 976 | 585 | 463 | 203 | 104 | 1,355 | 4,911 | |||||||||||||||||||||
Gain on Extinguishment of debt | (1,760 | ) | (387 | ) | (430 | ) | (5 | ) | — | (822 | ) | (1,760 | ) | |||||||||||||||
Other Income (expense), net | 65,737 | (463 | ) | 24 | 422 | (7,372 | ) | (7,389 | ) | 74,917 | ||||||||||||||||||
Equity method investment loss | 28,671 | 1,243 | 376 | — | — | 1,619 | 28,600 | |||||||||||||||||||||
Provision (benefit) for income taxes | (16,290 | ) | (1,391 | ) | (1,844 | ) | 9,849 | (4,446 | ) | 2,168 | (17,894 | ) | ||||||||||||||||
Net (loss) income attributable to noncontrolling interests | (6,715 | ) | 313 | 593 | 25 | 194 | 1,125 | (8,837 | ) | |||||||||||||||||||
Preferred dividend | 7,517 | 7,537 | 7,859 | 8,194 | 8,544 | 32,134 | 25,593 | |||||||||||||||||||||
Stock-based compensation expense | 5,566 | 5,554 | 5,474 | 6,000 | 5,222 | 22,250 | 27,604 | |||||||||||||||||||||
Acquisition costs | 109 | (188 | ) | (42 | ) | — | — | (230 | ) | 258 | ||||||||||||||||||
Cumulative adjustment to STI receivable | 26,044 | — | 26,044 | |||||||||||||||||||||||||
One-Time Expenses due to Restatement, etc. | 800 | 720 | 782 | 4 | 1,320 | 2,826 | 20,408 | |||||||||||||||||||||
Net income from discontinued operations, net of taxes | (18,288 | ) | — | — | — | — | — | (18,288 | ) | |||||||||||||||||||
Adjusted EBITDA (non-GAAP) | $ | 15,436 | $ | 6,630 | $ | 8,669 | $ | 5,799 | $ | 6,486 | $ | 27,584 | $ | 14,023 | ||||||||||||||
Three Months Ended Dec 31, | Twelve Months Ended Dec 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net Cash (used in) provided by operating activities | $ | 20,004 | $ | 29,293 | $ | 31,843 | $ | (31,369 | ) | |||||||
Add / (Less): | ||||||||||||||||
Capitalized software | (3,719 | ) | (3,360 | ) | (13,008 | ) | (14,372 | ) | ||||||||
Property and equipment | (1,106 | ) | (3,091 | ) | (8,183 | ) | (11,656 | ) | ||||||||
Free Cashflow | $ | 15,179 | $ | 22,842 | $ | 10,652 | $ | (57,397 | ) | |||||||
Add: One-Time Expenses due to Restatement, etc. | 1,320 | 800 | 2,826 | 20,408 | ||||||||||||
Adjusted Free Cashflow | $ | 16,499 | $ | 23,642 | $ | 13,478 | $ | (36,989 | ) | |||||||