Synchronoss Technologies Announces Fourth Quarter and Full Year 2018 Results

PDF Version
March 12, 2019

BRIDGEWATER, N.J., March 12, 2019 (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 fourth quarter and full year ended December 31, 2018.

Fourth quarter highlights include:

  • Revenue was $82.1 million, including 83 percent recurring revenue.
  • GAAP net loss for the quarter was $101.9 million, or $2.56 per share, which included $109.1 million of pretax non-cash asset impairments.
  • Synchronoss delivered $15.4 million of adjusted EBITDA, up 64.9 percent from $9.4 million in the third quarter. Adjusted EBITDA margin in the fourth quarter reached 18.8 percent, up 67.3 percent from 11.2 percent in the third quarter.
  • Cash flow provided by operations during the quarter was $29.3 million.

Glenn Lurie, president and chief executive officer, stated, “Our fourth quarter financial results show that Synchronoss continues to meet its financial and operational commitments to shareholders. We delivered positive adjusted EBITDA for the second straight quarter and the third straight quarter of improvement, adjusted EBITDA margins reached their highest level of the year, and we delivered nearly $30 million of cash flow from operations. In addition, thus far in early 2019 we are winning a growing number of new customers while expanding engagements with existing customers.  Our success is being driven by the significant value our platforms deliver in solving some of the most complex challenges facing the Telecommunications Media and Technology (TMT) industry, including the risk of disintermediation from Over-The-Top (OTT) applications, managing the increasing complexity to deliver a true digital consumer experiences and journeys that end-users expect while reducing costs and driving incremental revenue.”

Today, Synchronoss is announcing a new Cloud agreement with Assurant, Inc. which will white-label our Synchronoss cloud platform for its Pocket Geek solution which is offered in their device protection bundles.

This announcement builds on several important customer agreements and partnerships that the company won earlier in the quarter, including:

  • A deal and partnership with Rackspace, which will utilize the DXP platform to enhance its internal operational efficiencies and journeys, as well as resell the entire Synchronoss DXP platform and product suite to its global customer portfolio.
  • The renewal of its agreement to power the BT Cloud. BT has been a Synchronoss cloud services and storage partner since 2015, and the contract renewal signifies a deepening relationship between Synchronoss and BT.
  • The continued expansion and development of our advanced messaging initiative with the 3 major Japanese mobile operators.

 Full year financial highlights include:

  • Synchronoss delivered $325.8 million of revenue for the year. In addition, Synchronoss successfully migrated to over 79 percent recurring revenue in 2018, from 75 percent in 2017.
  • GAAP net loss for the year was $243.7 million, or $6.05 per share, which included $127.3 million of pretax non-cash asset impairments.
  • Adjusted EBITDA for the full year was $14.0 million.
  • Synchronoss generated $24.8 million of adjusted EBITDA in the second half of the year, after adjusting for $4.9 million of first quarter expenses that were recognized in the third quarter.
  • Synchronoss achieved $20 million of annualized cost savings in 2018 with another $25 million annualized run rate expected to be realized in 2019.
  • Synchronoss retired over 50% of its convertible debt and paid its third and fourth-quarter quarter dividend on its convertible preferred stock in cash instead of additional shares.

David Clark, chief financial officer, added, “During 2018, we stabilized and reset our core business, aligned the entire team towards our key priorities and core values, and evolved our platforms and product roadmaps to meet customer needs. As a result of those actions, we made a great deal of progress to improve operating leverage and profitability, drive free cash flow, and reduce debt. We believe there is additional cost savings opportunity, and going forward, we will continue to focus on delivering profitable revenue growth and cost efficiencies. Finally, demonstrating our confidence in our cash-generating abilities, in early 2019 we again paid the quarterly dividend on our preferred stock in cash instead of shares, and we repurchased an additional $11.5 million of our convertible debt.”

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 Tuesday, March 12, 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 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 13687208. 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, changes in the contingent consideration obligation, deferred compensation expense related to earn outs and amortization of intangibles associated with acquisitions.

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/A for the year ended December 31, 2017 and Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2018, which are 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
(In thousands)
(Unaudited)

       
  December 31, 2018   December 31, 2017
       
ASSETS
Current assets:      
Cash and cash equivalents $ 103,771     $ 156,299  
Restricted cash 6,089     89,826  
Marketable securities, current 28,230     3,111  
Accounts receivable, net of allowances of $4,599 and $3,107 at December 31, 2018 and December 31, 2017, respectively 102,798     78,186  
Prepaid expenses 45,058     33,957  
Other current assets 8,508     9,600  
Total current assets 294,454     370,979  
Marketable securities, non-current 6,658     —  
Property and equipment, net 67,937     111,825  
Goodwill 223,090     237,303  
Intangible assets, net 98,706     132,167  
Other assets 8,982     5,236  
Note receivable from related party —     73,984  
Equity method investment 1,619     33,917  
Total assets $ 701,446     $ 965,411  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:      
Accounts payable $ 13,576     $ 5,959  
Accrued expenses 59,545     72,739  
Deferred revenues, current 57,101     75,829  
Short-term convertible debt, net of debt issuance costs 113,542     —  
Mandatorily redeemable financial instrument —     37,959  
Total current liabilities 243,764     192,486  
Lease financing obligation 9,494     11,183  
Long-term convertible debt, net of debt issuance costs —     227,704  
Deferred tax liabilities 1,347     13,735  
Deferred revenues, non-current 59,841     25,241  
Other liabilities 10,797     6,195  
Commitments and contingencies      
Redeemable noncontrolling interest 12,500     25,280  
Series A Convertible Participating Perpetual Preferred Stock, $0.0001 par value; 10,000 shares authorized; 195 shares issued and outstanding at December 31, 2018 176,603     —  
Stockholders’ equity:      
Common stock, $0.0001 par value; 100,000 shares authorized, 49,836 and 52,024 shares issued; 42,674 and 46,965 outstanding at December 31, 2018 and December 31, 2017, respectively 5     5  
Treasury stock, at cost (7,162 and 5,059 shares at December 31, 2018 and December 31, 2017, respectively) (82,087 )   (105,584 )
Additional paid-in capital 534,673     597,553  
Accumulated other comprehensive loss (32,192 )   (23,373 )
Accumulated deficit (233,299 )   (5,014 )
Total stockholders’ equity 187,100     463,587  
Total liabilities and stockholders’ equity $ 701,446     $ 965,411  
               

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

    Twelve Months Ended December 31,
    2018   2017   2016
             
Net revenues   $ 325,839     $ 402,361     $ 426,294  
Costs and expenses:            
Cost of revenues   158,802     181,453     194,684  
Research and development   79,172     90,850     114,493  
Selling, general and administrative   122,112     154,037     126,228  
Net change in contingent consideration obligation   —     —     1,194  
Restructuring charges   12,375     10,739     6,333  
Depreciation and amortization   117,654     94,884     105,966  
Total costs and expenses   490,115     531,963     548,898  
Loss from continuing operations   (164,276 )   (129,602 )   (122,604 )
Interest income   7,770     12,502     1,907  
Interest expense   (4,911 )   (55,771 )   (7,414 )
Gain (loss) on extinguishment of debt   1,760     (29,413 )   —  
Other (expense) income, net   (74,917 )   (17,678 )   1,022  
Equity method investment loss, net   (28,600 )   (9,125 )   —  
Loss from continuing operations, before taxes   (263,174 )   (229,087 )   (127,089 )
Benefit for income taxes   17,894     34,863     33,220  
Net loss from continuing operations   (245,280 )   (194,224 )   (93,869 )
Net income from discontinued operations, net of tax   18,288     75,495     90,560  
Net loss   (226,992 )   (118,729 )   (3,309 )
Net loss attributable to redeemable noncontrolling interests   8,837     9,291     15,203  
Preferred stock dividend   (25,593 )   —     —  
Net loss attributable to Synchronoss   $ (243,748 )   $ (109,438 )   $ 11,894  
             
             
Basic:            
Continuing operations   $ (6.51 )   $ (4.14 )   $ (1.81 )
Discontinued operations   0.46     1.69     2.08  
    $ (6.05 )   $ (2.45 )   $ 0.27  
Diluted:            
Continuing operations   $ (6.51 )   $ (4.14 )   $ (1.81 )
Discontinued operations   0.46     1.69     2.08  
    $ (6.05 )   $ (2.45 )   $ 0.27  
Weighted-average common shares outstanding:            
Basic   40,277     44,669     43,551  
Diluted   40,277     44,669     43,551  
                   

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

    Three Months Ended December 31,
    2018   2017
         
Net revenues   $ 82,102     $ 106,259  
Costs and expenses:        
Cost of revenues   31,014     42,067  
Research and development   19,383     23,616  
Selling, general and administrative   22,744     50,988  
Restructuring charges   3,950     (976 )
Depreciation and amortization   47,324     23,786  
Total costs and expenses   124,415     139,481  
Loss from continuing operations   (42,313 )   (33,222 )
Interest income   252     3,345  
Interest expense   (976 )   (7,755 )
Gain (loss) on extinguishment of debt   1,760     (29,413 )
Other expense, net   (65,737 )   (20,052 )
Equity method investment loss, net   (28,671 )   (10,751 )
Loss from continuing operations, before taxes   (135,685 )   (97,848 )
Benefit for income taxes   16,290     16,890  
Net loss from continuing operations   (119,395 )   (80,958 )
Net income from discontinued operations, net of tax   18,288     89,562  
Net (loss) income   (101,107 )   8,604  
Net loss attributable to redeemable noncontrolling interests   6,715     2,311  
Preferred stock dividend   (7,517 )   —  
Net (loss) income attributable to Synchronoss   $ (101,909 )   $ 10,915  
         
Basic:        
Continuing operations   $ (3.01 )   $ (1.75 )
Discontinued operations   0.45     1.99  
    $ (2.56 )   $ 0.24  
Diluted:        
Continuing operations   $ (3.01 )   $ (1.75 )
Discontinued operations   0.45     1.99  
    $ (2.56 )   $ 0.24  
Weighted-average common shares outstanding:        
Basic   39,885     45,039  
Diluted   39,885     45,039  
             

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

    Twelve Months Ended December 31,
    2018   2017
Non-GAAP financial measures and reconciliation:        
GAAP Revenue   $ 325,839     $ 402,361  
Less: Cost of revenues   158,802     181,453  
Gross Profit   167,037     220,908  
Add / (Less):        
Stock-based compensation expense   4,370     4,602  
Acquisition costs   —     (2 )
Integration   —     1,744  
Adjusted Gross Profit   $ 171,407     $ 227,252  
Adjusted Gross Margin   52.6 %   56.5 %
         
GAAP Net loss from continuing operations   (164,276 )   (129,602 )
Add / (Less):        
Stock-based compensation expense   27,604     22,495  
Acquisition costs   258     13,023  
Restructuring   12,375     10,739  
Amortization expense   53,717     34,695  
Integration   —     7,804  
One-Time Expenses due to Restatement, etc.   20,408     37,197  
Non-GAAP Net loss from continuing operations   $ (49,914 )   $ (3,649 )
         
GAAP Net loss attributable to Synchronoss   $ (243,748 )   $ (109,438 )
Less: Net income from discontinued operations, net of taxes   (18,288 )   (75,495 )
Net loss from continuing operations attributable to Synchronoss   (262,036 )   (184,933 )
Add / (Less):        
Stock-based compensation expense   27,604     22,495  
Acquisition costs   258     13,023  
Restructuring   12,375     10,739  
Amortization expense   53,717     34,695  
Loss on Extinguishment of Debt   —     29,413  
Non-GAAP Expenses attributable to Non-Controlling Interest   (8,673 )   (1,955 )
One-Time Expenses due to Restatement, etc.   20,408     37,197  
Integration   —     7,804  
Income Tax Effect at Statutory Tax Rates   (17,894 )   (34,863 )
Non-GAAP Net loss from continuing operations attributable to Synchronoss   $ (174,241 )   $ (66,385 )
         
Diluted Non-GAAP Net loss from continuing operations per share   $ (4.33 )   $ (1.49 )
         
Weighted shares outstanding - Basic   40,277     44,669  
             

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

    Twelve Months Ended December 31,
    2018   2017
Net loss attributable to Synchronoss   $ (243,748 )   $ (109,438 )
Add / (Less):        
Restructuring   12,375     10,739  
Depreciation and amortization   117,654     94,884  
Interest income   (7,770 )   (12,502 )
Interest Expense   4,911     55,771  
Loss on Extinguishment of debt   (1,760 )   29,413  
Other Income (expense), net   74,917     17,678  
Equity method investment income (loss), net   28,600     9,125  
Benefit for income taxes   (17,894 )   (34,863 )
Net (loss) income attributable to noncontrolling interests   (8,837 )   (9,291 )
Preferred dividend   25,593     —  
Stock-based compensation expense   27,604     22,495  
Acquisition costs   258     13,023  
Integration   —     7,804  
One-Time Expenses due to Restatement, etc.   20,408     37,197  
Net income from discontinued operations, net of taxes   (18,288 )   (75,495 )
Adjusted EBITDA (non-GAAP)   $ 14,023     $ 56,540  
                 

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

    Three Months Ended December 31,
    2018   2017
Non-GAAP financial measures and reconciliation:        
GAAP Revenue   $ 82,102     $ 106,259  
Less: Cost of revenues   31,014     42,067  
Gross Profit   51,088     64,192  
Add / (Less):        
Stock-based compensation expense   923     1,276  
Integration   —     253  
Adjusted Gross Profit   $ 52,011     $ 65,721  
Adjusted Gross Margin   63.3 %   61.8 %
         
GAAP Net loss from continuing operations   (42,313 )   (33,222 )
Add / (Less):        
Stock-based compensation expense   5,566     8,067  
Acquisition costs   109     10,499  
Restructuring   3,950     (976 )
Amortization expense   28,595     8,634  
Integration   —     944  
One-Time Expenses due to Restatement, etc.   800     21,920  
Non-GAAP Net (loss) income from continuing operations   $ (3,293 )   $ 15,866  
         
GAAP Net (loss) income attributable to Synchronoss   $ (101,909 )   $ 10,915  
Less: Net income from discontinued operations, net of taxes   (18,288 )   (89,562 )
Net loss from continuing operations attributable to Synchronoss   (120,197 )   (78,647 )
Add / (Less):        
Stock-based compensation expense   5,566     8,067  
Acquisition costs   109     10,499  
Restructuring   3,950     (976 )
Amortization expense   28,595     8,634  
Loss on Extinguishment of Debt   —     29,413  
Non-GAAP Expenses attributable to Non-Controlling Interest   (7,404 )   (465 )
One-Time Expenses due to Restatement, etc.   800     21,920  
Integration   —     944  
Income Tax Effect at Statutory Tax Rates   (10,655 )   (16,619 )
Non-GAAP Net loss from continuing operations attributable to Synchronoss   $ (99,236 )   $ (17,230 )
         
Diluted Non-GAAP Net loss from continuing operations per share   $ (2.49 )   $ (0.38 )
         
Weighted shares outstanding - Basic   39,885     45,039  
             

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

    Three Months Ended December 31,
    2018   2017
         
Net (loss) income attributable to Synchronoss   $ (101,909 )   $ 10,915  
Add / (Less):        
Restructuring   3,950     (976 )
Depreciation and amortization   47,324     23,786  
Interest income   (252 )   (3,345 )
Interest Expense   976     7,755  
Loss on Extinguishment of debt   (1,760 )   29,413  
Other Income (expense), net   65,737     20,052  
Equity method investment income (loss), net   28,671     10,751  
Benefit for income taxes   (16,290 )   (16,890 )
Net (loss) income attributable to noncontrolling interests   (6,715 )   (2,311 )
Preferred dividend   7,517     —  
Stock-based compensation expense   5,566     8,067  
Acquisition costs   109     10,499  
Integration   —     944  
One-Time Expenses due to Restatement, etc.   800     21,920  
Net income from discontinued operations, net of taxes   (18,288 )   (89,562 )
Adjusted EBITDA (non-GAAP)   $ 15,436     $ 31,018  
                 

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

    Three Months Ended September 30,
    2018   2017
         
Net (loss) income attributable to Synchronoss   $ (54,529 )   $ (35,088 )
Add / (Less):        
Restructuring   4,539     2,312  
Depreciation and amortization   23,658     23,459  
Interest income   (203 )   (3,274 )
Interest Expense   1,370     25,555  
Other Income (expense), net   13,439     256  
Equity method investment income (loss), net   (283 )   (645 )
Benefit for income taxes   (2,308 )   (12,825 )
Net (loss) income attributable to noncontrolling interests   422     (1,276 )
Preferred dividend   7,463     —  
Stock-based compensation expense   7,216     3,678  
Acquisition costs   38     30  
Integration   —     1,569  
One-Time Expenses due to Restatement, etc.   3,638     9,438  
Net income from discontinued operations, net of taxes   —     (8,842 )
Adjusted EBITDA (non-GAAP)   $ 4,460     $ 4,347  
                 

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

    Twelve Months Ended December 31,
    2018   2017
Net Cash (used in) provided by operating activities   $ (31,369 )   $ (18,248 )
Add / (Less):        
Software Capitalization   (14,372 )   (9,119 )
Fixed Assets   (11,656 )   (12,151 )
Free Cashflow   $ (57,397 )   $ (39,518 )
Add: One-Time Restatement Expenses   20,408     37,197  
Adjusted Free Cashflow   $ (36,989 )   $ (2,321 )


    Three Months Ended December 31,
    2018   2017
Net Cash (used in) provided by operating activities   $ 29,293     $ (17,155 )
Add / (Less):        
Software Capitalization   (3,360 )   (1,271 )
Fixed Assets   (3,091 )   (1,836 )
Free Cashflow   $ 22,842     $ (20,262 )
Add: One-Time Restatement Expenses   800     21,920  
Adjusted Free Cashflow   $ 23,642     $ 1,658  
                 

SYNCHRONOSS TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

  Twelve Months Ended December 31,
  2018   2017   2016
           
Operating activities:          
Net loss from continuing operations $ (245,280 )   $ (194,224 )   $ (93,869 )
Net income from discontinued operations —     75,495     90,560  
Gain (loss) on sale of discontinued operations, net of tax 18,288     (122,842 )   (113,129 )
           
Adjustments to reconcile Net Loss to net cash used in operating activities:          
Depreciation and amortization expense 97,092     93,924     94,911  
Goodwill impairment 9,100     —     —  
Impairment of long-lived assets and capitalized software 11,462     960     11,055  
Change in fair value of financial instruments (3,849 )   4,367     —  
Amortization of debt issuance costs 1,294     12,771     1,607  
(Gain) loss on extinguishment of debt (1,760 )   29,413     —  
Accrued PIK interest (7,037 )   (12,090 )   (34 )
Allowance for loan losses 84,314     14,562     —  
(Earnings) loss from equity method investments 28,600     9,125     —  
Loss (Gain) on disposals 277     (4,947 )   (122 )
Discontinued operations non-cash and working capital adjustments —     48,647     371  
Amortization of bond premium 107     244     1,416  
Deferred income taxes (12,350 )   19,243     17,148  
Non-cash interest on leased facility —     1,203     1,392  
Stock-based compensation 27,604     22,495     34,178  
Contingent consideration obligation —     (2,711 )   1,194  
Changes in operating assets and liabilities:          
Accounts receivable, net of allowance for doubtful accounts (21,521 )   29,283     (13,650 )
Prepaid expenses and other current assets (5,315 )   (5,513 )   31,648  
Other assets 973     3,237     8,880  
Accounts payable 6,846     (9,098 )   (10,089 )
Accrued expenses (18,068 )   (4,949 )   (7,523 )
Other liabilities (4,675 )   (3,337 )   (6,558 )
Deferred revenues 2,529     (23,506 )   55,173  
Net cash used in operating activities (31,369 )   (18,248 )   104,559  
           
Investing activities:          
Purchases of fixed assets (11,656 )   (12,151 )   (42,570 )
Purchases of intangible assets and capitalized software (14,372 )   (9,119 )   (7,677 )
Proceeds from the sale of SpeechCycle —     13,500     —  
Purchases of marketable securities available for sale (36,789 )   (219 )   (13,445 )
Maturity of marketable securities available for sale 4,865     12,371     82,904  
Proceeds from the sale of discontinued operations —     928,171     27,335  
Equity investment distributions 404     608     —  
Investing in discontinued operations —     (13,721 )   —  
Investment in note receivable —     (6,187 )   —  
Business acquired, net of cash (9,734 )   (815,008 )   (86,322 )
Net cash used in investing activities (67,282 )   98,245     (39,775 )
Financing activities:          
Proceeds from the exercise of stock options —     2,584     13,633  
Taxes paid on withholding shares —     (442 )   —  
Payments on contingent consideration —     (122 )   —  
Debt issuance costs related to the Credit Facility —     (3,692 )   (1,346 )
Debt issuance cost related to amendment —     (16,776 )   —  
Debt issuance costs related to long-term debt —     (19,887 )   —  
Extinguishment of outstanding Convertible Senior Notes (113,696 )   —     —  
Proceeds from issuance of long-term debt —     900,000     —  
Repayment of long-term debt —     (900,000 )   —  
Borrowings on revolving line of credit —     —     144,000  
Repayment of revolving line of credit —     (29,000 )   (115,000 )
Excess tax benefits from stock option exercises —     17     —  
Repurchase of common stock —     —     (40,025 )
Proceeds from the sale of treasury stock in connection with an employee stock purchase plan —     1,047     2,183  
Proceeds from issuance of preferred stock 86,220     —     —  
Preferred dividend payment (7,075 )   —     —  
Proceeds from mandatorily redeemable financial instruments —     33,592     —  
Payments on capital obligations (1,334 )   (2,985 )   (3,815 )
Net cash provided by financing activities (35,885 )   (35,664 )   (370 )
Effect of exchange rate changes on cash (1,729 )   (9,641 )   (853 )
Net decrease in cash, restricted cash and cash equivalents (136,265 )   34,692     63,561  
Cash, restricted cash and cash equivalents, beginning of period 246,125     211,433     147,872  
Cash, restricted cash and cash equivalents, end of period $ 109,860     $ 246,125     $ 211,433  

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Source: Synchronoss Technologies, Inc.