BRIDGEWATER, N.J., Nov. 04, 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 its third quarter ended September 30, 2019.
Glenn Lurie, president and chief executive officer, stated, “Thus far, 2019 has been an extremely active year for Synchronoss and our platforms are executing well with new customers, new partners and revenue in each. We have announced partnerships with leading companies in the TMT industry such as Amazon, AT&T, BT, Microsoft, Rackspace and others embracing Synchronoss solutions to accelerate revenue growth, reduce costs, and accelerate digital transformations. Many of these partnerships are success-based revenue-share models that are expected to drive meaningful and material revenue for the company in 2020 and beyond.”
Lurie added, “We are very excited to announce our third new cloud deal of the year, this time with a major U.S.-based Tier 1 carrier. This new customer, along with our previously announced new cloud deals, demonstrate that the Synchronoss white-label cloud is in the sweet spot of what carriers need as they prepare for the widespread launch of 5G cellular and continue to seek out new sources of revenue and profitability.”
David Clark, Chief Financial Officer, stated, “As Sequential Technology International (STI) is evaluating strategic alternatives, based on this process we have decided to take a more conservative approach to our financial relationship. As a result, in the third quarter, we wrote off $26 million of STI-related accounts receivable which are now deemed uncollectible. This revenue relationship with STI falls under the new lease accounting standards, so the write-down is accounted for as a cumulative adjustment to revenue recognized in 2018 and 2019, and as such reduces third-quarter GAAP revenue from $78.2 million to $52.2 million. Going forward, quarterly revenue from STI will be recognized based on the amount of cash we collect in payment for our services, currently estimated to be in the range of $2.5-$3.0 million per quarter. We believe this will enable Synchronoss management and our investors to focus on the future of the company; in particular, execution and delivery of the transactions we have announced this year. Before the STI prior period revenue adjustment, operationally we were trending toward our original revenue and EBITDA guidance for the year.”
Third quarter highlights:
|Three Months Ended September 30,|
|Non-GAAP Revenue Excluding STI Write-Down||78,210||83,286||(6.0||)%|
|Non-GAAP Net Loss From Cont. Ops. Attributable to Synchronoss||(25,361||)||(33,457||)||24.2||%|
|Nine Months Ended September 30,|
|Non-GAAP Revenue Excluding STI Write-Down||244,161||243,737||0.2||%|
|Non-GAAP Net Loss From Cont. Ops. Attributable to Synchronoss||(51,276||)||(75,005||)||31.6||%|
New Business Update
New customer agreements and partnerships that the company has completed since the last earnings announcement include:
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, November 4, 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 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 13695428. 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.
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 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.
Vice President, Investor Relations
US: Diane Rose, +1 727-238-7567 or International: Anais Merlin, +44 20 3824 9219
SYNCHRONOSS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands)
|September 30, 2019||December 31, 2018|
|Cash and cash equivalents||$||19,193||$||103,771|
|Marketable securities, current||897||28,230|
|Accounts receivable, net of allowances for bad debt of $3,318 and $4,599 at September 30, 2019 and December 31, 2018, respectively||73,574||102,798|
|Other current assets||4,934||8,508|
|Total current assets||115,715||294,454|
|Marketable securities, non-current||—||6,658|
|Property and equipment, net||35,631||67,937|
|Operating lease right-of-use assets||55,308||—|
|Intangible assets, net||81,172||98,706|
|Equity method investment||—||1,619|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Deferred revenues, current||53,789||57,101|
|Short-term convertible debt, net of debt issuance costs||—||113,542|
|Mandatorily redeemable financial instrument||—||—|
|Total current liabilities||123,504||243,764|
|Lease financing obligation||—||9,494|
|Operating lease liabilities, non-current||62,863||—|
|Long-term convertible debt, net of debt issuance costs||—||—|
|Deferred tax liabilities||1,270||1,347|
|Deferred revenues, non-current||34,018||59,841|
|Other non-current liabilities||4,624||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; 210 shares issued and outstanding at September 30, 2019||192,596||176,603|
|Common stock, $0.0001 par value; 100,000 shares authorized, 51,608 and 49,836 shares issued; 44,446 and 42,674 outstanding at September 30, 2019 and December 31, 2018, respectively||5||5|
|Treasury stock, at cost (7,162 and 7,162 shares at September 30, 2019 and December 31, 2018, respectively)||(82,087||)||(82,087||)|
|Additional paid-in capital||528,734||534,673|
|Accumulated other comprehensive loss||(33,880||)||(30,383||)|
|Total stockholders’ equity||84,587||188,909|
|Total liabilities and stockholders’ equity||$||515,962||$||703,255|
SYNCHRONOSS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
|Three Months Ended September 30,||Nine Months Ended September 30,|
|Costs and expenses:|
|Cost of revenues||35,602||43,714||107,958||127,788|
|Research and development||18,575||18,684||57,282||59,789|
|Selling, general and administrative||30,536||27,320||82,862||99,368|
|Depreciation and amortization||18,508||23,658||58,920||70,330|
|Total costs and expenses||103,182||117,915||307,760||365,700|
|Loss from continuing operations||(50,972||)||(34,629||)||(89,599||)||(121,963||)|
|Gain on extinguishment of debt||5||—||822||—|
|Other (expense) income, net||(422||)||(13,439||)||17||(9,180||)|
|Equity method investment (loss) income||—||283||(1,619||)||71|
|Loss from continuing operations, before taxes||(51,364||)||(48,952||)||(90,914||)||(127,489||)|
|(Provision) benefit for income taxes||(9,849||)||2,308||(6,614||)||1,604|
|Net loss attributable to redeemable noncontrolling interests||(25||)||(422||)||(931||)||2,122|
|Preferred stock dividend||(8,194||)||(7,463||)||(23,590||)||(18,076||)|
|Net loss attributable to Synchronoss||$||(69,432||
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