GlobeNewswire Inc | Mar 8, 2021 04:05PM EST

March 08, 2021

BRIDGEWATER, N.J., March 08, 2021 (GLOBE NEWSWIRE) -- Synchronoss Technologies Inc.(NASDAQ: SNCR), a global leader and innovator in cloud, messaging, and digital platforms and products, today announced financial results for its fourth quarter and year ended December 31, 2020.

Fourth Quarter and Full-Year Highlights

-- GAAP revenue for the quarter was $69.4 million. For the full year, GAAP revenue was $291.7 million. -- Recurring revenue for the quarter represented 82% of total GAAP revenue. For the full year, recurring revenue represented 78% of total GAAP revenue. -- GAAP net loss for the quarter was $10.9 million or $0.26 per share. For the full year, GAAP net loss was $48.7 million or $1.16 per share. -- Non-GAAP net loss for the quarter was $8.2 million, or $0.19 per share. For the full year, non-GAAP net loss was $0.2 million, or $0.01 per share. -- Adjusted EBITDA for the quarter was $6.4 million. For the full year, adjusted EBITDA was $27.8 million. -- Cash and cash equivalent were $33.7 million at year end. -- During the fourth quarter, Synchronoss worked in conjunction with Verizon to develop the Unlimited Verizon Cloud offering, and during 2020 renewed Verizons Cloud Services contract for an additional five years. -- During the fourth quarter, Japanese carrier customers exceeded 20 million Rich Communication Services (RCS) downloads. -- During the fourth quarter, Synchronoss extended its partnership to provide AT&T Digital Services for an additional three years.

Commenting on the results, Jeff Miller, President and CEO of Synchronoss, said:

Im honored and delighted to be the next CEO of Synchronoss Technologies. Im grateful for the support of our Board of Directors and the Synchronoss team, who have enabled us to make forward progress over the past six months on refining our strategy and delivering our operating results. We continue to be driven by delivery and execution for our customers, disciplined cost containment, and continued product innovation. Despite what was a challenging year for Synchronoss and indeed the world community, Im proud of what the Synchronoss team achieved in 2020 and look forward to continuing to execute on our strategy of focused and profitable growth in 2021.

Three Months Ended December 31, 2020 2019 % ChangeRevenues $ 69,377 $ 90,588 (23.4 ) %Net Loss (10,892 ) (14,678 ) 25.8 %Adjusted EBITDA $ 6,411 $ 6,486 (1.2 ) %

Twelve Months Ended December 31, 2020 2019 % ChangeRevenues $ 291,670 $ 308,749 (5.5 ) %Net Loss (48,683 ) (136,727 ) 64.4 %Adjusted EBITDA $ 27,848 $ 27,584 1.0 %

David Clark, CFO of Synchronoss, added:

Our fourth quarter and year end results reflect progress with our continued focus on expanding both our gross and adjusted EBITDA margins. We are seeing the benefits of our cost management efforts, which allowed us to deliver comparable year over year adjusted EBITDA results despite top-line revenue pressures. This is in large part due to significant cost savings delivered during 2020, and we are continuing to streamline our operations with a focus on increasing our adjusted EBITDA in 2021.

2021 Adjusted EBITDA Guidance

The company expects its revenue for full year 2021 to be in the range of $275 million - $285 million, and its adjusted EBITDA for the full year 2021 to be in the range $30 million - $35 million, representing adjusted EBITDA growth of 8% - 26%, respectively.

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 at 4:30 p.m. (Eastern Time) today to discuss the financial results.

To access the live call, dial 800-437-2398 or +1 786-204-3966 (International) and give the participant passcode 8321337.

A live and archived webcast of the conference call will be accessible on the Investor Relations section of the companys website at www.synchronoss.com. In addition, a phone replay will be available approximately two hours following the end of the call and will be available for one week. To access the call replay dial-in information, please click here.

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, adjusted EBITDA, operating income (loss), net income (loss), effective tax rate, and earnings (loss) per share. 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 include restructuring and cease-use lease expense, litigation, remediation and refiling costs 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. Investors are encouraged to also review the Balance Sheet, Statement of Operations, and Statement of Cash Flow. 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, and digital 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 Companys ability to sustain or increase revenue from its larger customers and generate revenue from new customers, the Companys expectations regarding expenses and revenue, the sufficiency of the Companys cash resources, the Companys growth strategies, the anticipated trends and challenges in the business and the market in which the Company operates, the Companys 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 Managements Discussion and Analysis of Financial Condition and Results of Operations sections of the Companys Annual Report on Form 10-K for the year ended December 31, 2019, which is on file with the SEC and available on the SECs 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:Todd Kehrli or Joo-Hun KimMKR Investor Relations623-745-4046investor@synchronoss.com

SYNCHRONOSS TECHNOLOGIES,INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands) December 31, December 31, 2020 2019Assets Cash and cash equivalents $ 33,671 $ 39,012 Accounts receivable, net 47,849 65,863 Operating lease right-of-use assets 34,538 53,965 Goodwill 232,771 222,969 Other Assets 133,426 150,214 Total assets $ 482,255 $ 532,023 Liabilities and stockholders? equity Accounts Payable and Accrued expenses $ 82,075 $ 87,538 Debt, current 10,000 ? Deferred revenues 45,614 87,799 Operating lease liabilities, non-current 44,273 60,976 Other liabilities 19,370 18,768 Preferred Stock 237,641 200,865 Stockholders? equity 43,282 76,077 Total liabilities and stockholders? $ 482,255 $ 532,023 equity

SYNCHRONOSS TECHNOLOGIES,INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019 2018 Net revenues $ 69,377 $ 90,588 $ 291,670 $ 308,749 $ 325,839 Costs and expenses:Cost of revenues 28,414 42,449 121,817 150,407 158,802 Research and 17,274 18,286 77,043 75,568 79,172 developmentSelling, generaland 15,043 29,909 89,292 112,771 122,112 administrativeRestructuring 1,192 17 7,955 755 12,375 chargesDepreciation and 9,834 18,116 43,685 77,036 117,654 amortizationTotal costs and 71,757 108,777 339,792 416,537 490,115 expensesLoss fromcontinuing (2,380 ) (18,189 ) (48,122 ) (107,788 ) (164,276 )operationsInterest income 9 542 1,597 1,258 7,770 Interest expense (75 ) (104 ) (476 ) (1,355 ) (4,911 )Gain onextinguishment ? ? ? 822 1,760 of debtOther Income 3,793 7,372 9,535 7,389 (74,917 )(expense), netEquity method ? ? ? (1,619 ) (28,600 )investment lossIncome (loss)from continuing 1,347 (10,379 ) (37,466 ) (101,293 ) (263,174 )operations,before taxesBenefit(provision) for (2,039 ) 4,439 27,108 (2,174 ) 17,894 income taxesNet loss fromcontinuing (692 ) (5,940 ) (10,358 ) (103,467 ) (245,280 )operationsNet income fromdiscontinued ? ? ? ? 18,288 operations, netof taxNet loss (692 ) (5,940 ) (10,358 ) (103,467 ) (226,992 )Net income(loss)attributable to (101 ) (194 ) (344 ) (1,126 ) 8,837 redeemablenoncontrollinginterestsPreferred stock (10,099 ) (8,544 ) (37,981 ) (32,134 ) (25,593 )dividendNet lossattributable to $ (10,892 ) $ (14,678 ) $ (48,683 ) $ (136,727 ) $ (243,748 )Synchronoss Earnings per shareBasic: Continuing $ (0.26 ) $ (0.36 ) $ (1.16 ) $ (3.36 ) $ (6.51 )operationsDiscontinued ? ? ? ? 0.46 operationsBasic $ (0.26 ) $ (0.36 ) $ (1.16 ) $ (3.36 ) $ (6.05 )Diluted: Continuing $ (0.26 ) $ (0.36 ) $ (1.16 ) $ (3.36 ) $ (6.51 )operationsDiscontinued ? ? ? ? 0.46 operationsDiluted $ (0.26 ) $ (0.36 ) $ (1.16 ) $ (3.36 ) $ (6.05 )Weighted-averagecommon shares outstanding:Basic 42,464 41,085 41,950 40,694 40,277 Diluted 42,464 41,085 41,950 40,694 40,277

SYNCHRONOSS TECHNOLOGIES,INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Twelve Months Ended December 31, 2020 2019 2018Net loss continuing operations $ (10,358 ) $ (103,467 ) $ (245,280 )Gain on Sale of discontinued ? ? 18,288 operations, net of taxAdjustments to reconcile net loss tonet cash provided by operating activities:Non-cash items 65,103 127,464 234,854 Changes in operating assets and (55,309 ) 8,586 (39,231 )liabilities:Net cash provided by (used in) (564 ) 32,583 (31,369 )operating activities Investing activities: Purchases of fixed assets (885 ) (8,183 ) (11,656 )Purchases of intangible assets and (17,065 ) (13,008 ) (14,372 )capitalized softwareOther investing activities 3,611 40,568 (41,254 )Net cash provided by (used in) (14,339 ) 19,377 (67,282 )investing activities Net cash provided by (used in) 9,991 (121,257 ) (35,885 )financing activitiesEffect of exchange rate changes on (418 ) (1,562 ) (1,729 )cashNet increase in cash and cash (5,330 ) (70,859 ) (136,265 )equivalents Cash, restricted cash and cash 39,001 109,860 246,125 equivalents, beginning of periodCash, restricted cash and cash $ 33,671 $ 39,001 $ 109,860 equivalents, end of period

SYNCHRONOSS TECHNOLOGIES,INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019Non-GAAP financialmeasures and reconciliation:GAAP Revenue $ 69,377 $ 90,588 $ 291,670 $ 308,749 Less: Cost of revenues 28,414 42,449 121,817 150,407 Gross Profit 40,963 48,139 169,853 158,342 Add / (Less): Stock-based 511 782 2,409 2,928 compensation expenseRestructuring,transition and ? ? 372 405 cease-use leaseexpenseCumulative adjustment ? ? ? 26,044 to STI receivableAdjusted Gross Profit 41,474 48,921 172,634 187,719 Adjusted Gross Margin 59.8 % 54.0 % 59.2 % 60.8 % GAAP Net lossattributable to $ (10,892 ) $ (14,671 ) $ (48,683 ) $ (136,720 )SynchronossAdd / (Less): Stock-based (3,410 ) 5,222 11,137 22,250 compensation expenseAcquisition costs ? ? ? (230 )Restructuring,transition and 1,222 17 16,503 7,446 cease-use leaseexpenseAmortization expense 3,704 5,610 16,199 24,683 Cumulative adjustment ? ? ? 26,044 to STI receivableLitigation,remediation and 1,145 1,320 4,645 2,826 refiling costsNon-GAAP Expensesattributable to ? ? ? (76 )Non-ControllingInterestNon-GAAP Net income(loss) from continuingoperations $ (8,231 ) $ (2,502 ) $ (199 ) $ (53,777 )attributable toSynchronoss Diluted Non-GAAP Netloss from continuing $ (0.19 ) $ (0.06 ) $ (0.01 ) $ (1.32 )operations per share Weighted shares 42,464 41,085 41,950 40,694 outstanding - Dilutive

SYNCHRONOSS TECHNOLOGIES,INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands, except per share data) Three Months Ended Twelve Months Ended Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31, Dec 31, 2019 2019 2020 2020 2020 2020 2020 Net lossattributable $ (14,678 ) $ (12,275 ) $ (10,148 ) $ (15,367 ) $ (10,892 ) $ (48,683 ) $ (136,727 )to SynchronossAdd / (Less): Stock-basedcompensation 5,222 5,169 4,987 4,391 (3,410 ) 11,137 22,250 expenseAcquisition ? ? ? ? ? ? (230 )costsRestructuring,transition and 17 1,696 7,003 6,580 1,222 16,503 7,446 cease-uselease expenseCumulativeadjustment to ? ? ? ? ? ? 26,044 STI receivableLitigation,remediation 1,320 824 733 1,943 1,145 4,645 2,826 and refilingcostsDepreciationand 18,116 11,356 10,284 12,212 9,834 43,685 77,036 amortizationInterest (542 ) (58 ) (1,509 ) (20 ) (9 ) (1,597 ) (1,258 )incomeInterest 104 245 84 72 75 476 1,355 ExpenseGain onExtinguishment ? ? ? ? ? ? (822 )of debtOther Income (7,372 ) (1,692 ) (1,367 ) (2,684 ) (3,793 ) (9,535 ) (7,389 )Equity methodinvestment ? ? ? ? ? ? 1,619 lossProvision(benefit) for (4,439 ) (12,432 ) (7,972 ) (8,744 ) 2,039 (27,108 ) 2,175 income taxesNet lossattributableto 194 17 165 60 101 344 1,125 noncontrollinginterestsPreferred 8,544 8,908 9,289 9,685 10,099 37,981 32,134 dividendAdjustedEBITDA $ 6,486 $ 1,758 $ 11,549 $ 8,128 $ 6,411 $ 27,848 $ 27,584 (non-GAAP)

Three Months Ended December Twelve Months Ended December 31, 31, 2020 2019 2020 2019 Net Cash(used in)provided by $ (9,225 ) $ 20,004 $ (564 ) $ 31,843 operatingactivitiesAdd / (Less): Capitalized (4,054 ) (3,719 ) (16,665 ) (13,008 )softwareProperty and (314 ) (1,106 ) (885 ) (8,183 )equipmentFree Cashflow (13,593 ) 15,179 (18,114 ) 10,652 Add: One-TimeExpenses dueto 1,145 1,320 4,645 2,826 Restatement,etc.Adjusted Free $ (12,448 ) $ 16,499 $ (13,469 ) $ 13,478 Cashflow