- GAAP combined total revenue was $145.6
million
- Non-GAAP combined total revenue was
$147.8 million
- GAAP total revenue from continuing
operations for the fourth quarter was $121.7 million
- Non-GAAP total revenue from continuing
operations for the fourth quarter was $123.9 million
- GAAP EPS from continuing operations for
the fourth quarter was ($0.51)
- Non-GAAP EPS from continuing operations
for the fourth quarter was $0.24
Synchronoss Technologies, Inc. (NASDAQ:SNCR), the leader in
mobile cloud innovation for mobile carriers, enterprises, retailers
and OEMs around the world, today announced financial results for
the fourth quarter of 2016.
“Synchronoss has transformed its strategy with the Intralinks
acquisition and divestiture of its traditional activation business
as the company now looks to expand the scale and scope of its
enterprise and cloud initiatives to drive the new SNCR 3.0 vision.”
said Ronald Hovsepian, Chief Executive Officer of Synchronoss. “The
Synchronoss team is laying the foundation for the next chapter of
growth.”
“It has been an exciting time at Synchronoss over the past few
months as we view the acquisition of Intralinks to be a major step
forward in our enterprise strategy with Ron leading the team to
successfully integrate both companies into a single portfolio,”
said Founder and Executive Chairman Stephen Waldis. “I look forward
to working with Ron during this pivotal time for Synchronoss’
employees, customers, and partners around the globe.”
Financial Highlights for the Fourth Quarter of 2016:
- Total revenues from continuing
operations: $121.7 million GAAP compared to $121.2 million in
the fourth quarter of 2015. $123.9 million non-GAAP compared to
$121.8 million in the fourth quarter of 2015. Total combined
revenue from continuing and discontinued operations was $145.6
million. Non-GAAP combined total revenue from continuing and
discontinued operations was $147.8 million.
- Gross profit from continuing
operations: $71.5 million GAAP compared to $75.7 million in the
fourth quarter of 2015. $78.1 million non-GAAP compared to
$83.4 million in the fourth quarter of 2015.
- Operating (loss) income from
continuing operations: ($30.4) million GAAP compared to $1.5
million in the fourth quarter of 2015. $13.1 million non-GAAP
compared to $29.9 million in the fourth quarter of 2015.
- Net (loss) income from continuing
operations attributable to Synchronoss: ($22.6) million GAAP
compared to ($3.2) million in the fourth quarter of 2015. $11.0
million non-GAAP compared to $20.0 million in the fourth quarter of
2015.
- (Loss) earnings per diluted share
from continuing operations: ($0.51) GAAP compared to ($0.07) in
the fourth quarter of 2015. $0.24 non-GAAP compared to $0.43 in the
fourth quarter of 2015.
- Operating cash flow: $86 million
GAAP and non-GAAP compared to $63.2 million GAAP and non-GAAP in
the fourth quarter of 2015.
Financial Highlights for the Full Year 2016:
- Total revenues from continuing
operations: $476.7 million GAAP compared to $428.1 million in
2015. $490.2 million non-GAAP compared to $429.4 million in
2015.
- Gross profit from continuing
operations: $282.5 million GAAP compared to $272.8 million in
2015. $319.2 million non-GAAP compared to $288.0 million in
2015.
- Operating (loss) income from
continuing operations: ($71.9) million GAAP compared to $15.1
million in 2015. $82 million non-GAAP compared to $96.2 million in
2015.
- Net (loss) income from continuing
operations attributable to Synchronoss: ($55.7) million GAAP
compared to $1.3 million in 2015. $59.8 million non-GAAP compared
to $63.6 million in 2015.
- (Loss) earnings per diluted share
from continuing operations: ($1.28) GAAP compared to $0.03 in
2015. $1.28 non-GAAP compared to $1.38 in 2015.
- Operating cash flow: $142.5
million GAAP compared to $139.8 million in 2015. $142.5 million
non-GAAP compared to $143.4 million in 2015.
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."
Fourth Quarter and Recent Business Highlights:
- GAAP Cloud Services revenue from
continuing operations accounted for $121.7 million in the fourth
quarter. Non-GAAP Cloud Services revenue from continuing operations
accounted for $123.9 million in the fourth quarter. This was led by
cloud deployments at new and existing customers.
- Completed the acquisition of Intralinks
together with the closing of the $1.1 Billion credit facility.
- Completed the divestiture of our
carrier activation business to Sequential Technology International
as well as the sale of our SpeechCycle and Mirapoint Software
activation businesses.
- Strong progress at international
customers in EMEA and APAC as they move towards scaling our
Messaging and Personal Cloud Platforms.
First Quarter Investor Conference Participation
Schedule:
- Raymond James Investor Conference March
7, 2017-Orlando, FL
Conference Call Details
In conjunction with this announcement, Synchronoss will host a
conference call on Wednesday, February 8, 2017, at 5:00 p.m. (ET)
to discuss the company’s financial results. To access this call,
dial 877-930-7767 (domestic) or 253-336-7416 (international). The
pass code for the call is 52260549. 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 855-859-2056 (domestic) or 404-537-3406
(international). The replay pass code is 52260549. An archived
webcast 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 the deferred revenue write-down associated with
acquisitions, 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 (NASDAQ: SNCR) is an innovative software company
that helps both service providers and enterprises realize and
execute their goals for mobile transformation. Our simple, powerful
and flexible solutions serve millions of mobile subscribers and a
large portion of the Fortune 500 worldwide today. For more
information, visit us at: www.synchronoss.com.
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 December 31, 2015 and
other documents filed with the U.S. Securities and Exchange
Commission. Actual results may differ materially from these
expectations due to changes in global political, economic,
business, competitive, market and regulatory factors. Synchronoss
does not undertake any obligation to update any forward-looking
statements contained in this document as a result of new
information, future events or otherwise.
Synchronoss and the Synchronoss logo are trademarks of
Synchronoss Technologies, Inc. All other trademarks are property of
their respective owners.
SYNCHRONOSS TECHNOLOGIES, INC.
BALANCE SHEETS (in thousands, except per share data)
(Unaudited) December 31, 2016 December 31,
2015 ASSETS Current assets: Cash and cash equivalents $
181,018 $ 147,634 Marketable securities 12,506 66,357 Accounts
receivable, net of allowance for doubtful accounts of $1,756 and
$3,029 at December 31, 2016 and December 31, 2015, respectively
137,561 136,117 Prepaid expenses and other assets 33,488 48,127
Assets of discontinued operations, current —
8,710
Total current assets 364,573 406,945 Restricted
cash 30,000 — Marketable securities 2,974 19,635 Property and
equipment, net 155,599 168,280 Goodwill 273,710 182,000 Intangible
assets, net 203,864 174,322 Deferred tax assets 1,503 3,560 Other
assets 7,541 10,350 Receivable from related party 83,000 — Equity
method investments 45,890 — Assets of discontinued operations,
non-current — 45,136
Total
assets $ 1,168,654 $ 1,010,228
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable $ 15,770 $ 26,038 Accrued expenses 72,705 45,819
Deferred revenues 22,602 8,323 Contingent consideration obligation
11,860 — Short term debt 29,000 —
Total current liabilities 151,937 80,180 Lease financing
obligation - long term 12,121 13,343 Contingent consideration
obligation - long-term — 930 Convertible debt 226,291 224,878
Deferred tax liability 50,838 16,404 Deferred revenues 16,724 559
Other liabilities 3,782 2,668 Redeemable noncontrolling interest
49,856 61,452
Stockholders’ equity: Preferred stock, $0.0001
par value; 10,000 shares authorized, 0 shares issued and
outstanding at December 31, 2016 and December 31, 2015 — — Common
stock, $0.0001 par value; 100,000 shares authorized, 49,317 and
48,084 shares issued; 45,323 and 44,405 outstanding at December 31,
2016 and December 31, 2015, respectively 5 4 Treasury stock, at
cost (3,994 and 3,679 shares at December 31, 2016 and December 31,
2015, respectively) (95,183 ) (65,651 ) Additional paid-in-capital
575,093 512,802 Accumulated other comprehensive loss (43,252 )
(38,684 ) Retained earnings 220,442 201,343
Total stockholders’ equity 657,105
609,814
Total liabilities and stockholders’
equity $ 1,168,654 $ 1,010,228
SYNCHRONOSS TECHNOLOGIES,
INC.STATEMENT OF INCOME(in thousands, except per
share data)(Unaudited)**
Three Months Ended December 31,
Year ended December 31,
2016
2015
2016
2015
Net Revenues $ 121,717 $ 121,213 $ 476,671 $ 428,117
Costs and
Expenses: Cost of services (1)(2)* 50,210 45,512 194,198
155,287 Research and development (1)(2) 28,273 22,958 106,681
91,430 Selling, general and administrative (1)(2) 43,297 29,539
131,106 88,411 Net change in contingent consideration obligation
3,631 760 10,930 760 Restructuring charges 1,360 (34 ) 6,333 4,946
Depreciation and amortization 25,302 20,931
99,311 72,152 Total costs and
expenses 152,073 119,666 548,559
412,986 (Loss) income from continuing
operations (30,356 ) 1,547 (71,888 ) 15,131 Interest income 936 564
2,428 2,047 Interest expense (2,007 ) (1,503 ) (7,013 ) (5,711 )
Other income (expense), net 2,117 973
1,931 372 (Loss) income from continuing
operations, before taxes (29,310 ) 1,581 (74,542 ) 11,839 Provision
for income taxes 3,996 1,310
7,290 (4,477 ) Net income (loss) from continuing
operations (25,314 ) 2,891 (67,252 ) 7,362 Net income (loss) from
discontinued operations, net of taxes 46,848
8,431 75,233 39,320 Net income
21,534 11,322 7,981 46,682 Net (loss) income attributable to
noncontrolling interests (2,760 ) 6,052
(11,596 ) 6,052 Net income attributable to
Synchronoss $ 24,294 $ 5,270 $ 19,577 $ 40,630
Net income (loss) from continuing operations
attributable to Synchronoss $ (22,554 ) $ (3,161 ) $ (55,656 ) $
1,310 Income effect for interest on convertible debt, net of tax
— — — 1,951
Net income (loss) from continuing operations adjusted for the
convertible debt $ (22,554 ) $ (3,161 ) $ (55,656 ) $ 3,261
Basic: Continuing operations $ (0.51 ) $ (0.07 ) $
(1.28 ) $ 0.03 Discontinued operations 1.06
0.19 1.73 0.93 $ 0.55 $
0.12 $ 0.45 $ 0.96
Diluted: Continuing
operations $ (0.51 ) $ (0.07 ) $ (1.28 ) $ 0.03 Discontinued
operations 1.06 0.19 1.73
0.93 $ 0.55 $ 0.12 $ 0.45 $ 0.96
Weighted-average common shares outstanding:
Basic 43,814 42,817 43,571
42,284 Diluted 43,814
42,817 43,571 42,284 *
This presentation reflects the discontinued operations associated
with the divestiture of our activation business. ** Cost of
services excludes depreciation and amortization which is shown
separately. (1) Amounts include fair value
stock-based compensation as follows: Cost of services $ 1,076 $
1,493 $ 5,669 $ 5,091 Research and development 2,451 2,374 8,817
7,487 Selling, general and administrative 4,837
6,137 17,854 17,289
Total fair value stock-based compensation expense $
8,364 $ 10,004 $
32,340 $ 29,867 (2)
Amounts include acquisition costs as follows: Cost of services $
3,344 $ 5,612 $ 17,482 $ 8,814 Research and development 4,030 2,375
13,751 7,307 Selling, general and administrative 9,253
963 14,739 1,412
Total acquisition costs $ 16,627
$ 8,950 $ 45,972 $
17,533
SYNCHRONOSS TECHNOLOGIES, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (in
thousands, except per share data) (Unaudited)
Three Months Ended December 31, Year ended December
31, 2016 2015
2016 2015 Non-GAAP financial
measures and reconciliation: GAAP Revenue $
121,717 $ 121,213 $ 476,671 $ 428,117 Add: Deferred revenue
write-down 2,151 568 13,535
1,260
Non-GAAP Revenue $ 123,868
$ 121,781 $ 490,206 $ 429,377 GAAP
Revenue $ 121,717 $ 121,213 $ 476,671 $ 428,117 Less: Cost of
services 50,210 45,512 194,198 155,287 GAAP Gross Margin 71,507
75,701 282,473 272,830 Add: Deferred revenue write-down 2,151 568
13,535 1,260 Add: Fair value stock-based compensation 1,076 1,493
5,669 5,091 Add: Acquisition and restructuring costs 3,344
5,612 17,482 8,814
Non-GAAP Gross Margin $ 78,078 $ 83,374 $ 319,159
$ 287,995 Non-GAAP Gross Margin % 63 % 68 % 65 % 67 %
GAAP (loss) income from operations $ (30,356 ) $ 1,547 $
(71,888 ) $ 15,131 Add: Deferred revenue write-down 2,151 568
13,535 1,260 Add: Fair value stock-based compensation 8,364 10,004
32,340 29,867 Add: Acquisition and restructuring costs 17,987 8,916
52,305 22,479 Add: Net change in contingent consideration
obligation 3,631 760 10,930 760 Add: Amortization expense
11,308 8,150 44,738
26,659 Non-GAAP income from operations $ 13,085 $
29,945 $ 81,960 $ 96,156 GAAP Net
income (loss) from continuing operations attributable to
Synchronoss $ (22,554 ) $ (3,161 ) $ (55,656 ) $ 1,310 Add:
Deferred revenue write-down 2,151 568 13,535 1,260 Add: Fair value
stock-based compensation 8,364 10,004 32,340 29,867 Add:
Acquisition and restructuring costs 17,987 8,916 52,305 22,479 Add:
Net change in contingent consideration obligation, net of Fx change
3,631 760 10,930 760 Add: Amortization expense 11,308 8,150 44,738
26,659 Less: Noncontrolling interest non-GAAP adjustments (1,148 )
(183 ) (5,523 ) (183 ) Less: Tax effect (8,720 )
(5,101 ) (32,904 ) (18,592 ) Non-GAAP Net income from
continuing operations attributable to Synchronoss 11,019 19,953
59,765 63,560 Income effect for interest on convertible debt, net
of tax 549 669 2,197
2,302 Net income from continuing operations for
diluted EPS calculation $ 11,568 $ 20,622 $ 61,962
$ 65,862 Diluted non-GAAP net income per share
from continuing operations $ 0.24 $ 0.43 $ 1.28
$ 1.38 Weighted shares outstanding - Diluted
49,012 47,862 48,518
47,653
SYNCHRONOSS TECHNOLOGIES, INC. STATEMENT OF CASH
FLOWS (in thousands) (Unaudited) December
31, 2016 2015
Operating activities: (As Adjusted) Net income $
7,981 $ 46,682 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
expense 99,311 72,152 Amortization of debt issuance costs 1,607
1,501 (Loss) gain on disposals (952 ) 16 Gain on discontinued
operations (95,311 ) — Amortization of bond premium 1,416 1,705
Deferred income taxes 29,296 8,319 Non-cash interest on leased
facility 1,111 924 Stock-based compensation 33,979 31,711
Contingent consideration obligation 10,930 (772 ) Changes in
operating assets and liabilities: Accounts receivable, net of
allowance for doubtful accounts (1,662 ) (27,577 ) Prepaid expenses
and other current assets 1 12,649 (8,543 ) Other assets 10,054
(4,282 ) Accounts payable (11,139 ) 6,185 Accrued expenses 1 25,479
16,333 Other liabilities (6,546 ) (402 ) Deferred revenues
24,298 (4,130 ) Net cash provided by operating
activities 142,501 139,822
Investing activities:
Purchases of fixed assets (58,542 ) (59,960 ) Purchases of
intangible assets — (1,200 ) Purchases of marketable securities
available-for-sale (13,445 ) (139,569 ) Maturities of marketable
securities available-for-sale 82,904 106,210 Change in restricted
cash (30,000 ) — Proceeds from the sale of discontinued operations
18,135 — Businesses acquired, net of cash (98,428 )
(131,592 ) Net cash used in investing activities (99,376 ) (226,111
)
Financing activities: Proceeds from the exercise of
stock options 13,912 19,936 Taxes paid on withholding shares 1
(8,885 ) (17,043 ) Payments on contingent consideration obligation
— (4,468 ) Debt issuance costs (1,346 ) — Borrowings on revolving
line of credit 144,000 — Repayment of revolving line of credit
(115,000 ) — Repurchases of common stock (40,025 ) — Proceeds from
the sale of treasury stock in connection with an employee stock
purchase plan 2,183 1,902 Repayments of capital lease obligations
(3,815 ) (2,021 ) Net cash used in financing
activities (8,976 ) (1,694 ) Effect of exchange rate changes on
cash (765 ) (350 ) Net increase (decrease) in cash
and cash equivalents 33,384 (88,333 ) Cash and cash equivalents at
beginning of period 147,634 235,967
Cash and cash equivalents at end of period $ 181,018 $
147,634 1 Certain prior year amounts have been
adjusted to conform with the adoption of ASU 2016-09.
SYNCHRONOSS TECHNOLOGIES, INC.
Reconciliation of GAAP to Non-GAAP Cash Provided by Operating
Activities (in thousands) (Unaudited) December
31, 2016 2015 Non-GAAP cash provided by
operating activities and reconciliation:
Net cash
provided by operating activities (GAAP) $ 142,501 $ 139,822
Add: Cash payments on settlement of earn-out — 3,532
Adjusted cash flow provided by operating activities
(Non-GAAP) $ 142,501 $ 143,354
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Synchronoss Technologies, Inc.Investor and Media:Daniel
Ives, +1 908-524-1047daniel.ives@synchronoss.com