DELAWARE

000-52049

06-1594540

(State or other jurisdiction
of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

200 Crossing Boulevard, 8th Floor
Bridgewater, New Jersey

 
08807

(Address of principal executive offices)

(Zip Code)

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SYNCHRONOSS TECHNOLOGIES, INC.

Date: October 28, 2015

By:

/s/ Stephen G. Waldis

Stephen G. Waldis

Chairman of the Board of Directors
And Chief Executive Officer

·

Non-GAAP total revenue of $151.3 million increases 21% year-over-year

·

Cloud Services revenue of $76.1 million increases 31% year-over-year

·

Activation Services revenue of $75.2 million increases 11% year-over-year

·

Non-GAAP EPS of $0.58 increases 26% year-over-year

·

Announced the launch of our enterprise business, which will offer secure mobility solutions to enterprise clients, initially in the financial services, life sciences and healthcare industries, and will be led by David Schuette, a seasoned enterprise executive.

·

Established a new venture to develop advanced mobile solutions by leveraging proprietary secure mobility technology contributed by The Goldman Sachs Group, Inc. (NYSE: GS) that will address the challenges associated with enterprise mobility applications.

·

Verizon reaffirmed its commitment to Synchronoss as a valued strategic partner. 

September 30, 2015

December 31, 2014

ASSETS

Current assets:

Cash and cash equivalents

$

$

Marketable securities

Accounts receivable, net of allowance for doubtful accounts of $376 and $88 at September 30, 2015 and December 31, 2014, respectively

Prepaid expenses and other assets

Deferred tax assets

Total current assets

Marketable securities

Property and equipment, net

Goodwill

Intangible assets, net

Deferred tax assets

Other assets

Total assets

$

$

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

$

Accrued expenses

Deferred revenues

Contingent consideration obligation

Total current liabilities

Lease financing obligation - long term

Convertible debt

Deferred tax liability

Other liabilities

Stockholders’ equity:

Preferred stock, $0.0001 par value; 10,000 shares authorized, 0 shares issued and outstanding at September 30, 2015 and December 31, 2014

 —

 —

Common stock, $0.0001 par value; 100,000 shares authorized, 47,757 and 46,444 shares issued; 44,078 and 42,711 outstanding at  September 30, 2015 and December 31, 2014, respectively

Treasury stock, at cost (3,679 and 3,733 shares at September 30, 2015 and December 31, 2014, respectively)

Additional paid-in capital

Accumulated other comprehensive loss

Retained earnings

Total stockholders’ equity

Total liabilities and stockholders’ equity

$

$

Three Months Ended September 30, 

Nine Months Ended September 30, 

2015

2014

2015

2014

Net revenues

$

$

$

$

Costs and expenses:

Cost of services (1)(2)(3)*

Research and development (1)(2)(3)

Selling, general and administrative (1)(2)(3)

Net change in contingent consideration obligation

 —

 —

Restructuring charges

 —

 —

Depreciation and amortization

Total costs and expenses

Income from operations

Interest income

Interest expense

Other income (4)

Income before income tax expense

Income tax expense

Net income

$

$

$

$

Net income attributable to Synchronoss

Add: After-tax interest on convertible debt

Net income for diluted EPS calculation**

$

$

$

$

Net income per common share:

Basic

$

$

$

$

Diluted

$

$

$

$

Weighted-average common shares outstanding:

Basic

Diluted

* 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

$

$

$

$

Research and development

Selling, general and administrative

Total fair value stock-based compensation expense

$

$

$

$

(2) Amounts include acquisition costs as follows:

Cost of services

$

$

 —

$

$

Research and development

 —

Selling, general and administrative

Total acquisition costs

$

$

$

$

(3) Amounts include fair value earn-out cash and stock compensation as follows:

Cost of services

$

 —

$

 —

$

 —

$

Research and development

 —

 —

 —

 —

Selling, general and administrative

 —

 —

Total fair value earn-out cash and stock compensation expense

$

 —

$

$

 —

$

(4) Amounts include Fx change of the contingent consideration obligation as follows:

Other (expense) income

$

 —

$

$

 —

$

Three Months Ended September 30, 

Nine Months Ended September 30, 

2015

2014

2015

2014

Non-GAAP financial measures and reconciliation:

GAAP Revenue

$

$

$

$

Add:  Deferred revenue write-down

Non-GAAP Revenue

$

$

$

$

GAAP Revenue

$

$

$

$

Less: Cost of services

GAAP Gross Margin

Add: Deferred revenue write-down

Add: Fair value stock-based compensation

Add: Acquisition and restructuring costs

 —

Add: Deferred compensation expense - earn-out

 —

 —

 —

Non-GAAP Gross Margin

$

$

$

$

Non-GAAP Gross Margin %

GAAP income from operations

$

$

$

$

Add: Deferred revenue write-down

Add: Fair value stock-based compensation

Add: Acquisition and restructuring costs

Add: Net change in contingent consideration obligation

 —

 —

Add: Deferred compensation expense - earn-out

 —

 —

Add: Amortization expense

Non-GAAP income from operations

$

$

$

$

GAAP net income attributable to common stockholders

$

$

$

$

Add: Deferred revenue write-down, net of tax

Add: Fair value stock-based compensation, net of tax

Add: Acquisition and restructuring costs, net of taxes

Add: Net change in contingent consideration obligation, net of Fx change

 —

 —

Add: Deferred compensation expense - earn-out, net of tax

 —

 —

Add: Amortization expense, net of tax

Non-GAAP net income

$

$

$

$

Net income attributable to Synchronoss

Add: After-tax interest on convertible debt

Net income for diluted EPS calculation

$

$

$

$

Diluted non-GAAP net income per share

$

$

$

$

Weighted shares outstanding - Diluted

Nine Months Ended September 30, 

2015

2014

Operating activities:

Net income

$

$

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense

Amortization of debt issuance costs

Amortization of bond premium

Deferred income taxes

Non-cash interest on leased facility

Stock-based compensation

Changes in operating assets and liabilities:

Accounts receivable, net of allowance for doubtful accounts

Prepaid expenses and other current assets

Other assets

Accounts payable

Accrued expenses

Contingent consideration obligation

Excess tax benefit from the exercise of stock options

Other liabilities

Deferred revenues

Net cash provided by operating activities

Investing activities:

Purchases of fixed assets

Purchases of intangible assets

 —

Purchases of marketable securities available-for-sale

Maturities of marketable securities available-for-sale

Businesses acquired, net of cash

Net cash used in investing activities

Financing activities:

Proceeds from the exercise of stock options

Payments on contingent consideration obligation

 —

Debt issuance costs related to convertible notes

 —

Proceeds from issuance of convertible notes

 —

Borrowings on revolving line of credit

 —

Repayment of revolving line of credit

 —

Excess tax benefit from the exercise of stock options

Proceeds from the sale of treasury stock in connection with an employee stock purchase plan

Repayments of capital obligations

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

$

$

Nine Months Ended September 30, 

2015

2014

Non-GAAP cash provided by operating activities and reconciliation:

Net cash provided by operating activities (GAAP)

$

$

Add: Tax benefits from stock options exercised

Add: Cash payments on settlement of earn-out

 —

Adjusted cash flow provided by operating activities (Non-GAAP)

$

$