Synchronoss Technologies, Inc. Announces First Quarter 2015 Financial Results
-
Non-GAAP total revenue of
$133.1 million increases 35% year-over-year -
Cloud Services revenue of
$71.3 million increases 63% year-over-year -
Activation Services revenue of
$61.8 million increases 12% year-over-year -
Non-GAAP EPS of
$0.49 increases 26% year-over-year
“Synchronoss delivered a strong start to 2015, highlighted by first
quarter results that were at or above the high end of expectations,”
said
On a GAAP basis,
On a non-GAAP basis,
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 also included below under the heading "Non-GAAP Financial Measures."
“We are pleased with our first quarter results from both a financial and
operational perspective,” said
Conference Call Details
In conjunction with this announcement,
Following the conference call, a replay will be available for a limited time at 855-859-2056 (domestic) or 404-537-3406 (international). The replay pass code is 27443823. 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
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
Forward-looking Statements
This document may include certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, but are not limited to, plans,
objectives, expectations and intentions and other statements contained
in this press release that are not historical facts and statements
identified by words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," “outlook” or words of similar
meanings. These statements are based on our current beliefs or
expectations and are inherently subject to various risks and
uncertainties, including those set forth under the caption "Risk
Factors" in Synchronoss’ Annual Report on Form 10-K for the year ended
The
| SYNCHRONOSS TECHNOLOGIES, INC. | ||||||||||
| BALANCE SHEETS | ||||||||||
| (in thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| March 31, 2015 | December 31, 2014 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 152,487 | $235,967 | |||||||
| Marketable securities | 54,955 | 51,097 | ||||||||
|
Accounts receivable, net of allowance for doubtful accounts of
$220 and $88 at March 31, |
138,011 | 118,371 | ||||||||
| Prepaid expenses and other assets | 30,775 | 35,023 | ||||||||
| Deferred tax assets | 3,123 | 1,475 | ||||||||
| Total current assets | 379,351 | 441,933 | ||||||||
| Marketable securities | 2,321 | 3,313 | ||||||||
| Property and equipment, net | 160,252 | 151,171 | ||||||||
| Goodwill | 173,367 | 147,135 | ||||||||
| Intangible assets, net | 109,766 | 99,489 | ||||||||
| Deferred tax assets | 2,903 | 1,232 | ||||||||
| Other assets | 18,532 | 18,549 | ||||||||
| Total assets | $ | 846,492 | $862,822 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 12,999 | $25,059 | |||||||
| Accrued expenses | 33,606 | 42,679 | ||||||||
| Deferred revenues | 11,957 | 11,897 | ||||||||
| Contingent consideration obligation | — | 8,000 | ||||||||
| Total current liabilities | 58,562 | 87,635 | ||||||||
| Lease financing obligation - long term | 14,055 | 9,204 | ||||||||
| Convertible debt | 230,000 | 230,000 | ||||||||
| Deferred tax liability | 5,955 | 3,698 | ||||||||
| Other liabilities | 2,781 | 3,178 | ||||||||
| Stockholders’ equity: | ||||||||||
|
Preferred stock, $0.0001 par value; 10,000 shares authorized, 0
shares issued and |
— | — | ||||||||
|
Common stock, $0.0001 par value; 100,000 shares authorized, 46,940
and 46,444 shares |
4 | 4 | ||||||||
| Treasury stock, at cost (3,704 and 3,733 shares at March 31, 2015 and December 31, 2014, respectively) | (65,969 | ) | (66,336 | ) | ||||||
| Additional paid-in capital | 469,312 | 454,740 | ||||||||
| Accumulated other comprehensive loss | (39,482 | ) | (20,014 | ) | ||||||
| Retained earnings | 171,274 | 160,713 | ||||||||
| Total stockholders’ equity | 535,139 | 529,107 | ||||||||
| Total liabilities and stockholders’ equity | $ | 846,492 | $862,822 | |||||||
| SYNCHRONOSS TECHNOLOGIES, INC. | |||||||||||
| STATEMENT OF INCOME | |||||||||||
| (in thousands, except per share data) | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2015 | 2014 | ||||||||||
| Net revenues | $ | 132,926 | $ | 98,477 | |||||||
| Costs and expenses: | |||||||||||
| Cost of services (1)(2)(3)* | 53,655 | 39,979 | |||||||||
| Research and development (1)(2)(3) | 22,024 | 15,541 | |||||||||
| Selling, general and administrative (1)(2)(3) | 20,883 | 17,125 | |||||||||
| Net change in contingent consideration obligation | — | 1,211 | |||||||||
| Restructuring charges | 3,240 | — | |||||||||
| Depreciation and amortization | 14,835 | 12,266 | |||||||||
| Total costs and expenses | 114,637 | 86,122 | |||||||||
| Income from operations | 18,289 | 12,355 | |||||||||
| Interest income | 466 | 49 | |||||||||
| Interest expense | (1,342 | ) | (420 | ) | |||||||
| Other income | 14 | 796 | |||||||||
| Income before income tax expense | 17,427 | 12,780 | |||||||||
| Income tax expense | (6,866 | ) | (5,196 | ) | |||||||
| Net income | $ | 10,561 | $ | 7,584 | |||||||
| Net income attributable to Synchronoss | 10,561 | 7,584 | |||||||||
| Add: After-tax interest on convertible debt | 475 | — | |||||||||
| Net income for diluted EPS calculation | $ | 11,036 | $ | 7,584 | |||||||
| Net income per common share: | |||||||||||
| Basic | $ | 0.25 | $ | 0.19 | |||||||
| Diluted | $ | 0.23 | $ | 0.19 | |||||||
| Weighted-average common shares outstanding: | |||||||||||
| Basic | 41,626 | 39,769 | |||||||||
| Diluted | 47,080 | 40,655 | |||||||||
| * Cost of services excludes depreciation and amortization which is shown separately. | |||||||||||
| * Includes an add back for the convertible debt interest | |||||||||||
| (1) Amounts include fair value stock-based compensation as follows: | |||||||||||
| Cost of services | $ | 1,482 | $ | 1,258 | |||||||
| Research and development | 1,482 | 1,270 | |||||||||
| Selling, general and administrative | 3,665 | 3,314 | |||||||||
| Total fair value stock-based compensation expense | $ | 6,629 | $ | 5,842 | |||||||
| (2) Amounts include acquisition costs as follows: | |||||||||||
| Cost of services | $ | — | $ | 31 | |||||||
| Research and development | 1,135 | 48 | |||||||||
| Selling, general and administrative | 244 | 139 | |||||||||
| Total acquisition costs | $ | 1,379 | $ | 218 | |||||||
| (3) Amounts include fair value earn-out cash and stock compensation as follows: | |||||||||||
| Cost of services | $ | — | $ | — | |||||||
| Research and development | — | — | |||||||||
| Selling, general and administrative | — | 424 | |||||||||
| Total fair value earn-out cash and stock compensation expense | $ | — | $ | 424 | |||||||
| SYNCHRONOSS TECHNOLOGIES, INC. | |||||||||||||
| Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended March 31, | |||||||||||||
| 2015 | 2014 | ||||||||||||
| Non-GAAP financial measures and reconciliation: | |||||||||||||
| GAAP Revenue | $ | 132,926 | $ | 98,477 | |||||||||
| Add: Deferred revenue write-down | 179 | 224 | |||||||||||
| Non-GAAP Revenue | $ | 133,105 | $ | 98,701 | |||||||||
| GAAP Revenue | $ | 132,926 | $ | 98,477 | |||||||||
| Less: Cost of services | 53,655 | 39,979 | |||||||||||
| GAAP Gross Margin | 79,271 | 58,498 | |||||||||||
| Add: Deferred revenue write-down | 179 | 224 | |||||||||||
| Add: Fair value stock-based compensation | 1,482 | 1,258 | |||||||||||
| Add: Acquisition and restructuring costs | — | 31 | |||||||||||
| Non-GAAP Gross Margin | $ | 80,932 | $ | 60,011 | |||||||||
| Non-GAAP Gross Margin % | 61 | % | 61 | % | |||||||||
| GAAP income from operations | $ | 18,289 | $ | 12,355 | |||||||||
| Add: Deferred revenue write-down | 179 | 224 | |||||||||||
| Add: Fair value stock-based compensation | 6,629 | 5,842 | |||||||||||
| Add: Acquisition and restructuring costs | 4,619 | 218 | |||||||||||
| Add: Net change in contingent consideration obligation | — | 1,211 | |||||||||||
| Add: Deferred compensation expense - earn-out | — | 424 | |||||||||||
| Add: Amortization expense | 5,175 | 3,914 | |||||||||||
| Non-GAAP income from operations | $ | 34,891 | $ | 24,188 | |||||||||
| GAAP net income attributable to common stockholders | $ | 10,561 | $ | 7,584 | |||||||||
| Add: Deferred revenue write-down, net of tax | 127 | 149 | |||||||||||
| Add: Fair value stock-based compensation, net of tax | 4,697 | 3,894 | |||||||||||
| Add: Acquisition and restructuring costs, net of taxes | 3,273 | 145 | |||||||||||
| Add: Net change in contingent consideration obligation, net of Fx change | — | 1,211 | |||||||||||
| Add: Deferred compensation expense - earn-out, net of tax | — | 283 | |||||||||||
| Add: Amortization expense, net of tax | 3,666 | 2,609 | |||||||||||
| Non-GAAP net income | $ | 22,324 | $ | 15,875 | |||||||||
| Net income attributable to Synchronoss | 22,324 | 15,875 | |||||||||||
| Add: After-tax interest on convertible debt | 514 | — | |||||||||||
| Net income for diluted EPS calculation | $ | 22,838 | $ | 15,875 | |||||||||
| Diluted non-GAAP net income per share | $ | 0.49 | $ | 0.39 | |||||||||
| Weighted shares outstanding - Diluted | 47,080 | 40,655 | |||||||||||
| SYNCHRONOSS TECHNOLOGIES, INC. | ||||||||||||
| STATEMENT OF CASH FLOWS | ||||||||||||
| (in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended March 31, | ||||||||||||
| 2015 | 2014 | |||||||||||
| Operating activities: | ||||||||||||
| Net income | $ | 10,561 | $ | 7,584 | ||||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||
| Depreciation and amortization expense | 14,835 | 12,266 | ||||||||||
| Amortization of debt issuance costs | 375 | |||||||||||
| Amortization of bond premium | 474 | 74 | ||||||||||
| Deferred income taxes | (733 | ) | 3,112 | |||||||||
| Non-cash interest on leased facility | 233 | 230 | ||||||||||
| Stock-based compensation | 6,585 | 5,842 | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable, net of allowance for doubtful accounts | (22,145 | ) | (28,935 | ) | ||||||||
| Prepaid expenses and other current assets | 5,623 | 816 | ||||||||||
| Other assets | (443 | ) | 465 | |||||||||
| Accounts payable | 106 | (3,388 | ) | |||||||||
| Accrued expenses | (12,301 | ) | (8,743 | ) | ||||||||
| Contingent consideration obligation | (1,532 | ) | 1,611 | |||||||||
| Excess tax benefit from the exercise of stock options | (1,981 | ) | (385 | ) | ||||||||
| Other liabilities | (243 | ) | 1,249 | |||||||||
| Deferred revenues | 451 | (3,204 | ) | |||||||||
| Net cash used in operating activities | (135 | ) | (11,406 | ) | ||||||||
| Investing activities: | ||||||||||||
| Purchases of fixed assets | (24,217 | ) | (8,044 | ) | ||||||||
| Purchases of marketable securities available-for-sale | (43,548 | ) | (1,244 | ) | ||||||||
| Maturities of marketable securities available-for-sale | 40,285 | 315 | ||||||||||
| Business acquired, net of cash | (59,481 | ) | — | |||||||||
| Net cash used in investing activities | (86,961 | ) | (8,973 | ) | ||||||||
| Financing activities: | ||||||||||||
| Proceeds from the exercise of stock options | 5,398 | 3,273 | ||||||||||
| Payments on contingent consideration obligation | (4,468 | ) | — | |||||||||
| Excess tax benefit from the exercise of stock options | 1,981 | 385 | ||||||||||
| Proceeds from the sale of treasury stock in connection with an employee stock purchase plan | 975 | 740 | ||||||||||
| Repayments of capital obligations | (291 | ) | (324 | ) | ||||||||
| Net cash provided by financing activities | 3,595 | 4,074 | ||||||||||
| Effect of exchange rate changes on cash | 21 | 64 | ||||||||||
| Net decrease in cash and cash equivalents | (83,480 | ) | (16,241 | ) | ||||||||
| Cash and cash equivalents at beginning of period | 235,967 | 63,512 | ||||||||||
| Cash and cash equivalents at end of period | $ | 152,487 | $ | 47,271 | ||||||||
| SYNCHRONOSS TECHNOLOGIES, INC. | ||||||||||||
| Reconciliation of GAAP to Non-GAAP Cash Provided by Operating Activities | ||||||||||||
| (in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended March 31, | ||||||||||||
| 2015 | 2014 | |||||||||||
| Non-GAAP cash used in operating activities and reconciliation: | ||||||||||||
| Net cash used in operating activities (GAAP) | $ | (135 | ) | $ | (11,406 | ) | ||||||
| Add: Tax benefits from stock options exercised | 1,981 | 385 | ||||||||||
| Add: Cash payments on settlement of earn-out | 3,532 | — | ||||||||||
| Adjusted cash flow provided by (used in) operating activities (Non-GAAP) | $ | 5,378 | $ | (11,021 | ) | |||||||
Source:
Synchronoss Technologies, Inc.
Media:
Stacie Hiras, +1
908-674-0758
Stacie.hiras@synchronoss.com
or
Investor:
Seth
Potter, +1 646-277-1230
investor@synchronoss.com