GlobeNewswire Inc | Aug 9, 2021 04:05PM EDT

August 09, 2021

BRIDGEWATER, N.J., Aug. 09, 2021 (GLOBE NEWSWIRE) -- Synchronoss Technologies Inc.(NASDAQ: SNCR), a global leader and innovator in cloud, messaging, and digital solutions, today announced financial results for its second quarter ended June 30, 2021.

Second Quarter Highlights & Corporate Updates

-- Revenue for the quarter was $71.5 million. -- Recurring revenue for the quarter represented 87% of total GAAP revenue. -- GAAP net loss for the quarter was $23.9 million or $0.54 per share. -- Non-GAAP net loss for the quarter was $11.9 million, or $0.27 per share. -- Adjusted EBITDA for the quarter was $13.3 million. -- Cash and cash equivalents were $32.6 million at quarter end. -- Completed recapitalization with full year 2021 pro forma savings greater than 50% over the previous capital structure. -- Cloud solution subscriber growth continues to exceed expectations. -- Signed commercial agreement with Kitamura for our Cloud solution, our third new Cloud customer this year. -- Lou Ferraro, EVP of Financial Operations and Chief Human Resources Officer named Acting CFO. -- Reiterates full-year 2021 revenue and adjusted EBITDA guidance.

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

I am pleased to report another solid quarter for Synchronoss and to share that we completed a comprehensive recapitalization during the quarter, that reduces our projected 2021 full year pro forma financial obligations by over 50%. With this recapitalization complete, we believe we will enable long-term sustainable growth in both revenue and profits, and as a result, deliver increased shareholder value. I want to thank the entire team at Synchronoss for their continued contributions to make these results possible. He continued, I also want to welcome Lou Ferraro as our Acting CFO. He has been with the Company for three and a half years most recently as our Executive Vice President of Financial Operations and Chief Human Resources Officer, and has spearheaded many of the improvements in the companys operating expenses and financial controls.

Three Months Ended June 30,(in thousands) 2021 2020 % ChangeRevenues $ 71,532 $ 76,535 (6.5 ) %Loss from continuing (2,621 ) (8,666 ) 69.8 %operations, before taxesNet loss^1 (23,946 ) (10,148 ) (136.0 ) %Adjusted EBITDA $ 13,277 $ 11,549 15.0 %

Six Months Ended June 30,(in thousands) 2021 2020 % ChangeRevenues $ 137,031 $ 153,657 (10.8 ) %Loss from continuing (15,150 ) (24,448 ) 38.0 %operations, before taxesNet loss^1 (46,506 ) (22,423 ) (107.4 ) %Adjusted EBITDA $ 18,814 $ 13,307 41.4 %

________________________

1 Includes $10.4million preferred stock amortization costs accelerated due to Series A Preferred stock redemption.

Lou Ferraro, Acting CFO of Synchronoss, added:

"We are pleased with our continued growth in our Cloud solution subscribers, the addition of our third new Cloud customer this year, and improved operating results. With my expanded responsibilities, I look forward to continuing our focus on profitable revenue growth, continued cost management, and delivering improved shareholder value."

Reiterating full year 2021 Guidance

Synchronoss is reiterating its revenue and adjusted EBITDA guidance for the full year 2021. The Company continues to expect revenue for the full year 2021 to be in a range of $275-285 million, and adjusted EBITDA in the range of $32-37 million.

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 877-930-7767 or +1 253-336-7416 (International) and give the conference ID 1484858.

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 855-859-2056 and enter the conference ID, 1484858.

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 Technologies (NASDAQ: SNCR) builds software that empowers companies around the world to connect with their subscribers in trusted and meaningful ways. The companys collection of products helps streamline networks, simplify onboarding, and engage subscribers to unleash new revenue streams, reduce costs and increase speed to market. Hundreds of millions of subscribers trust Synchronoss products to stay in sync with the people, services and content they love. Thats why more than 1,500 talented Synchronoss employees worldwide strive each day to reimagine a world in sync. Learn more 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 impact of investments and legal proceedings involving the Company, including the investigations by the Securities and Exchange Commission and the Department of Justice described in the Companys 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, 2020, and the Companys Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, which are 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(Unaudited) (In thousands)

June 30, 2021 December 31, 2020ASSETS Cash and cash equivalents $ 32,570 $ 33,671 Accounts receivable, net 44,202 47,849 Operating lease right-of-use assets 29,703 34,538 Goodwill 229,610 232,771 Other Assets 127,605 133,426 Total assets $ 463,690 $ 482,255 LIABILITIES AND STOCKHOLDERS? EQUITY Accounts Payable and Accrued expenses $ 72,777 $ 82,075 Debt, current ? 10,000 Deferred revenues 41,095 45,614 Debt, non-current 117,189 ? Operating lease liabilities, non-current 40,315 44,273 Other liabilities 17,852 19,370 Preferred Stock 72,506 237,641 Stockholders? equity 101,956 43,282 Total liabilities and stockholders? equity $ 463,690 $ 482,255

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

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020Net revenues $ 71,532 $ 76,535 $ 137,031 $ 153,657 Costs and expenses:Cost of revenues 27,142 29,480 55,779 64,951 ^1Research and 17,197 19,096 34,594 38,884 developmentSelling, generaland 21,909 24,640 39,837 50,984 administrativeRestructuring 877 4,493 1,590 5,943 chargesDepreciation and 8,485 10,284 18,352 21,640 amortizationTotal costs and 75,610 87,993 150,152 182,402 expensesLoss fromcontinuing (4,078 ) (11,458 ) (13,121 ) (28,745 ) operationsInterest income 25 1,509 30 1,568 Interest expense (144 ) (84 ) (239 ) (329 ) Other Income 1,576 1,367 (1,820 ) 3,058 (expense)Loss fromcontinuing (2,621 ) (8,666 ) (15,150 ) (24,448 ) operations,before taxesBenefit for 201 7,972 364 20,404 income taxesNet loss fromcontinuing (2,420 ) (694 ) (14,786 ) (4,044 ) operationsNet income(loss)attributable to (50 ) (165 ) 286 (182 ) redeemablenoncontrollinginterestsPreferred stock (21,476 ) (9,289 ) (32,006 ) (18,197 ) dividendNet lossattributable to $ (23,946 ) $ (10,148 ) $ (46,506 ) $ (22,423 ) Synchronoss Earnings (loss) per shareBasic $ (0.54 ) $ (0.24 ) $ (1.07 ) $ (0.54 ) Diluted $ (0.54 ) $ (0.24 ) $ (1.07 ) $ (0.54 ) Weighted-averagecommon shares outstanding:Basic 44,131 41,697 43,438 41,482 Diluted 44,131 41,697 43,438 41,482

________________________1Cost of revenues excludes depreciation and amortization which are shown separately.

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

Six Months Ended June 30, 2021 2020Net loss continuing operations $ (14,786 ) $ (4,044 ) Adjustments to reconcile net loss to net cash provided by operating activities:Non-cash items 22,584 30,122 Changes in operating assets and 369 (24,470 ) liabilities:Net cash provided by (used in) operating 8,167 1,608 activities Investing activities: Purchases of fixed assets (1,250 ) (424 ) Purchases of intangible assets and (10,959 ) (8,685 ) capitalized softwareOther investing activities 550 2,175 Net cash used in investing activities (11,659 ) (6,934 ) Net cash provided by financing activities 2,687 9,991 Effect of exchange rate changes on cash (296 ) (895 ) Net decrease in cash and cash equivalents (1,101 ) 3,770 Cash, restricted cash and cash equivalents, 33,671 39,001 beginning of periodCash, restricted cash and cash equivalents, $ 32,570 $ 42,771 end of period

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

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020Non-GAAPfinancial measures andreconciliation:GAAP Revenue $ 71,532 $ 76,535 $ 137,031 $ 153,657 Less: Cost of 27,142 29,480 55,779 64,951 revenuesGross Profit 44,390 47,055 81,252 88,706 Add / (Less): Stock-basedcompensation 379 641 857 1,394 expenseRestructuring,transition and ? 243 27 283 cease-use leaseexpenseAdjusted Gross 44,769 47,939 82,136 90,383 ProfitAdjusted Gross 62.6 % 62.6 % 59.9 % 58.8 %Margin Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020GAAP Net lossattributable to (23,946 ) (10,148 ) (46,506 ) (22,423 ) SynchronossAdd / (Less): Stock-basedcompensation 2,345 4,987 5,066 10,156 expenseRestructuring,transition and 2,918 7,003 4,975 8,699 cease-use leaseexpenseAmortization 3,206 4,062 6,815 8,696 expenseLitigation,remediation and 3,607 733 3,542 1,557 refiling costsNon-GAAP Net(loss) income $ (11,870 ) $ 6,637 $ (26,108 ) $ 6,685 attributable toSynchronoss Diluted Non-GAAPNet (loss) $ (0.27 ) $ 0.16 $ (0.60 ) $ 0.16 income per share Weighted sharesoutstanding - 44,131 41,697 43,438 41,482 Dilutive

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

Three Months Ended Six Months Ended Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Jun 30, 2021 Jun 30, 2020 Net lossattributable $ (23,946 ) $ (22,560 ) $ (10,892 ) $ (15,367 ) $ (10,148 ) $ (46,506 ) $ (22,423 ) to SynchronossAdd / (Less): Stock-basedcompensation 2,345 2,721 (3,410 ) 4,391 4,987 5,066 10,156 expenseRestructuring,transition and 2,918 2,057 1,222 6,580 7,003 4,975 8,699 cease-uselease expenseLitigation,remediation 3,607 (65 ) 1,145 1,943 733 3,542 1,557 and refilingcosts, netDepreciationand 8,485 9,867 9,834 12,212 10,284 18,352 21,640 amortizationInterest (25 ) (5 ) (9 ) (20 ) (1,509 ) (30 ) (1,567 ) incomeInterest 144 95 75 72 84 239 329 ExpenseOther Income, (1,576 ) 3,396 (3,793 ) (2,684 ) (1,367 ) 1,820 (3,059 ) netProvision(benefit) for (201 ) (163 ) 2,039 (8,744 ) (7,972 ) (364 ) (20,404 ) income taxesNet lossattributableto 50 (336 ) 101 60 165 (286 ) 182 noncontrollinginterestsPreferred 21,476 10,530 10,099 9,685 9,289 32,006 18,197 dividend^1AdjustedEBITDA $ 13,277 $ 5,537 $ 6,411 $ 8,128 $ 11,549 $ 18,814 $ 13,307 (non-GAAP)

________________________

1 Includes $10.4million preferred stock amortization costs accelerated due to Series A Preferred stock redemption.

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net Cash(used in)provided by $ 5,906 $ 16,624 $ 8,167 $ 1,608 operatingactivitiesAdd / (Less):Capitalized (5,917 ) (4,257 ) (10,959 ) (8,685 ) softwarePropertyand (529 ) (175 ) (1,250 ) (424 ) equipmentFree (540 ) 12,192 (4,042 ) (7,501 ) CashflowAdd:Litigation,remediation 3,607 733 3,542 1,557 andrefilingcostsAdjustedFree $ 3,067 $ 12,925 $ (500 ) $ (5,944 ) Cashflow