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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Syniverse Holdings | NYSE:SVR | NYSE | Ordinary Share |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 30.98 | 0.00 | 01:00:00 |
From Jul 2019 to Jul 2024
Syniverse Holdings, Inc. (NYSE:SVR), a leading provider of technology and business solutions for the global telecommunications industry, today reported results for fourth quarter 2009.
“Our recently acquired messaging business performed well above our expectations while our roaming business improved,” said Tony Holcombe, President and CEO. “Stronger volumes across these product sets enabled us to finish the year better than expected.”
Syniverse cited solid results for the quarter:
David Hitchcock, Executive Vice President and CFO, said continued cost management helped Syniverse drive margins and earnings during the fourth quarter.
“Syniverse continued to post strong margins and cash flow in the last quarter of 2009,” Hitchcock said. “We delivered strong cash earnings through disciplined cost controls. Moreover, the BSG integration is nearly complete, and we have realized our expected synergies.”
Please refer to the information set forth below under the headings “Non-GAAP Measures” and “Reconciliation of Non-GAAP Measures to GAAP” for an explanation of non-GAAP financial measures as well as a reconciliation of such non-GAAP financial measures to GAAP financial measures.
Fourth quarter 2009 Service Line Revenue
Technology Interoperability Services
Technology interoperability services revenues were $97.7 million in the quarter, a 21.9% increase compared to fourth quarter 2008. Revenues were higher due primarily to revenues from the newly acquired messaging business offset by declines in other services due to the previously disclosed customer-specific events and weakness in the sales of ITHL products in Asia Pacific.
Network Services
Network services revenues were $30.1 million in the quarter, a 0.3% decrease compared to fourth quarter 2008, as declines in SS7 and related services were offset by growth in IP Networking and value added services.
Number Portability Services
Number portability services revenues were $8.1 million in the quarter, a 3.6% increase compared to fourth quarter 2008 due to increased porting volumes.
Call Processing Services
Call processing services revenues were $7.1 million in the quarter, a 9.3% increase compared to fourth quarter 2008 due to increases in signaling solutions for international roaming.
Enterprise Solutions
Enterprise solutions revenues were $0.2 million in fourth quarter 2009.
Off-Network Database Queries (Pass-Through)
Pass-through revenues for fourth quarter 2009 were $0.8 million.
Fourth quarter 2009 Business Highlights
Outlook
Syniverse provides the following outlook for 2010 as set forth below:
Net Revenues $590 – 620 million Net Income $70.5 - 82.5 million Adjusted EBITDA $239 – 259 million Cash Net Income $120 – 131 million Operating Free Cash Flow In excess of $110 millionExpected Adjusted EBITDA and cash net income have been adjusted to exclude the expected one-time costs in 2010 related to the integration of the messaging businesses. For periods beginning on Jan. 1, 2009, cash net income assumes a long-term effective tax rate of 37.5%; for periods through Dec. 31, 2008, the long-term effective tax rate assumption was 39%.
Non-GAAP Measures
Syniverse's cash net income is determined by first calculating adjusted net income. Adjusted net income is calculated by (i) adding the following items to net income: provision for income taxes, restructuring, non-cash stock compensation, BSG Wireless transition expenses, messaging acquisition and transition expenses, and purchase accounting amortization; (ii) adjusting the resulting pre-tax sum for a provision for income taxes at an assumed long-term tax rate of 37.5% (39% for all periods through Dec. 31, 2008), which excludes the effect of our net operating losses; and (iii) adding to that sum the cash benefit of our tax-deductible goodwill. The cash benefit is a result of the differing treatments of approximately $436 million of goodwill on our balance sheet, which primarily is the result of acquisitions that we made from Verizon in February 2002, IOS North America in September 2004 and VeriSign’s mobile messaging business in October 2009. Specifically, while this goodwill is not amortized for GAAP purposes, the amortization of goodwill is, nonetheless, deductible in calculating our taxable income and, hence, reduces actual cash tax liabilities.
Syniverse's Adjusted EBITDA is determined by adding the following items to net income: interest expense, net, provision for income taxes, depreciation and amortization, restructuring, non-cash stock compensation, BSG Wireless transition expenses, and messaging acquisition and transition expenses.
Syniverse's operating free cash flow is determined by subtracting capital expenditures from, and adding change in working capital due to payment of BSG pre-acquisition contractual obligation, to net cash provided by operating activities.
A reconciliation of adjusted net income, cash net income and Adjusted EBITDA to net income, the closest GAAP financial measure, is presented in the financial tables below under the heading “Reconciliation of Non-GAAP Measures to GAAP.” A reconciliation of operating free cash flow to net cash provided by operating activities, the closest GAAP measure, is presented in the financial tables below under the heading “Reconciliation of Non-GAAP Measures to GAAP.”
We present adjusted net income, cash net income and related per-share amounts because we believe they provide useful information regarding our operating results in addition to our GAAP measures. We believe that adjusted net income provides our investors with valuable insight into our profitability exclusive of certain adjustments. In addition, cash net income provides further insight into the cash impact resulting from the different treatments of goodwill for financial reporting and tax purposes. We rely on adjusted net income and cash net income as primary measures of Syniverse’s earnings exclusive of these certain and other non-cash charges.
We present Adjusted EBITDA and operating free cash flow because we believe that Adjusted EBITDA and operating free cash flow provide useful information regarding our continuing operating results. We rely on Adjusted EBITDA and operating free cash flow as primary measures to review and assess the operating performance of our management team in connection with our executive compensation and bonus plans. We also review Adjusted EBITDA and operating free cash flow to compare our current operating results with corresponding periods and with the operating results of other companies in our industry. In addition, we utilize Adjusted EBITDA and operating free cash flow as an assessment of our overall liquidity and our ability to meet our debt service obligations.
We believe that the disclosure of Adjusted EBITDA, operating free cash flow, adjusted net income and cash net income is useful to investors as these non-GAAP measures form the basis of how our management team reviews and considers our operating results. By disclosing these non-GAAP measures, we believe that we create for investors a greater understanding of, and an enhanced level of transparency into, the means by which our management team operates our company. We also believe these measures can assist investors in comparing our performance to that of other companies on a consistent basis without regard to certain items that do not directly affect our ongoing operating performance or cash flows.
Adjusted EBITDA, operating free cash flow, adjusted net income and cash net income have limitations as analytical tools, and you should not rely upon them or consider them in isolation or as a substitute for GAAP measures, such as net income, cash flows from operating activities and other consolidated income or other cash flows statement data prepared in accordance with GAAP. In addition, these non-GAAP measures may not be comparable to other similarly titled measures of other companies. Because of these limitations, Adjusted EBITDA and operating free cash flow should not be considered as measures of discretionary cash available to us to invest in the growth of our business. Adjusted net income and cash net income also should not be considered as a replacement for, or a measure that should be used or analyzed in lieu of, net income. We attempt to compensate for these limitations by relying primarily upon our GAAP results and using Adjusted EBITDA, operating free cash flow, adjusted net income and cash net income as supplemental information only.
Fourth quarter 2009 Earnings Call
Syniverse will host a conference call at 4:30 p.m. ET to discuss the results. To participate on this call, U.S. callers may dial toll free 1-800-261-3417; international callers may dial direct +1 (617) 614-3673. The passcode for this call is 75090394. This event also will be webcast live over the Internet in listen-only mode at http://www.syniverse.com/investorevents.
A replay of this call will be available beginning at approximately 7:30 p.m. ET on Feb. 11 and will remain available through Feb. 25 at 11:59 p.m. ET. To access the replay, U.S. callers may dial toll free 1-888-286-8010; international callers may dial direct +1 (617) 801-6888. The replay passcode is 98263593.
About Syniverse
Syniverse Technologies (NYSE:SVR) provides mobile technology for the global telecommunications industry, making it possible for disparate data, messaging and voice technologies to interoperate anywhere, any time. Serving more than 800 communications companies in over 160 countries, Syniverse offers market-leading solutions that simplify the complexities of roaming, messaging, network interoperability and business intelligence for mobile operators, MSOs, enterprise verticals and emerging mobile providers. For more information, visit www.syniverse.com.
Cautionary Notice Regarding Forward-Looking Statements
Certain of the statements in this press release may constitute “forward-looking statements” for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Syniverse to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements include, without limitation: statements regarding Syniverse’s position for long-term success; Syniverse’s ability to continue to manage its costs; Syniverse’s expectations of growth of its product portfolio and competitive position; Syniverse’s ability to continue to report positive results in future periods and/or to continue to experience global growth; Syniverse’s ability to successfully integrate its acquired businesses and realize expected synergies; Syniverse’s belief of the value of Non-GAAP measures to its investors; Syniverse’s assumptions regarding its long-term effective tax rate; and Syniverse’s guidance for 2010, as contained under the caption “Outlook,” including, without limitation, expected net revenues, net income, Adjusted EBITDA, cash net income and operating free cash flow for 2010, as well as the assumptions, estimates, and judgments applied in creating such guidance.
These forward-looking statements are based upon information presently available to the Company’s management and are inherently subjective, uncertain and subject to change, due to any number of risks and uncertainties, including, without limitation, those other risks and factors discussed in Syniverse’s Annual Report on Form 10-K for the year ended Dec. 31, 2008 and Quarterly Reports for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009 under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and otherwise in Syniverse’s reports and filings that it makes with the Securities and Exchange Commission.
You should not place undue reliance on any forward-looking statements, since those statements speak only as of the date that they are made. Syniverse has no obligation and does not undertake to publicly update, revise or correct any of the forward-looking statements after the date of this Press Release, or after the respective dates on which such statements otherwise are made, whether as a result of new information, future events, or otherwise, except as otherwise may be required by law.
Syniverse Holdings, Inc. Condensed Consolidated Statements of Income (unaudited) and Other Supplemental Information (In thousands except per share information) Three Months Ended Year EndedDecember 31,
2009
December 31,
2008
December 31,
2009
December 31,
2008
Technology Interoperability Services $ 97,675 $ 80,108 $ 293,782 $ 317,685 Network Services 30,066 30,147 122,804 122,529 Number Portability Services 8,112 7,829 31,654 29,291 Call Processing Services 7,075 6,472 28,126 29,720 Enterprise Solutions 193 444 1,322 2,387 Revenues excluding Off-Network Database Queries 143,121125,000 477,688 501,612 Off-Network Database Queries 806 923 5,303 4,744 Total Revenues 143,927
125,923 482,991 506,356 Cost of operations 50,762 42,536 172,950 165,236 Gross Margin 93,165
83,387 310,041 341,120 Gross Margin % 64.7 % 66.2 % 64.2 % 67.4 % Gross Margin % before Off-Network Database Queries 65.1 % 66.7 % 64.9 % 68.0 % Sales and marketing 12,477 11,524 38,789 45,549 General and administrative 24,513 21,447 74,502 79,241 Depreciation and amortization 18,191 14,111 60,397 55,344 Restructuring 2,583 - 2,583 (29 ) Operating income 35,401
36,305 133,770 161,015 Other expense, net Interest expense, net (6,931 ) (8,451 ) (28,567 ) (35,352 ) Other, net (155 ) (23 ) 939 (402 ) (7,086 ) (8,474 ) (27,628 ) (35,754 ) Income before provision for income taxes 28,315
27,831 106,142 125,261 Provision for income taxes 10,026 10,579 37,771 46,797 Net income 18,289
17,252 68,371 78,464 Less: Net loss attributable to noncontrolling interest (365 ) - (590 ) - Net income attributable to Syniverse Holdings, Inc. $ 18,654 $ 17,252 $ 68,961 $ 78,464 Net income per share Basic $ 0.27 $ 0.25 $ 1.00 $ 1.15 Diluted $ 0.27 $ 0.25 $ 1.00 $ 1.15 Shares used in calculation Basic 68,227 67,814 68,031 67,675 Diluted 68,443 67,817 68,153 67,731 Other Supplemental Information: Revenue by region (1) (unaudited): Three Months Ended Year Ended
December 31,
2009
December 31,
2008
December 31,
2009
December 31,
2008
North America (U.S. and Canada) $ 109,911 $ 89,947 $ 351,378 $ 361,438 Asia Pacific 11,075 14,015 39,392 46,445 Caribbean and Latin America (includes Mexico) 8,768 7,253 32,817 30,666 Europe, Middle East and Africa 13,367 13,785 54,101 63,063 Subtotal non- North American Revenue 33,210 35,053 126,310 140,174 Revenues excluding Off-Network Database Queries 143,121 125,000 477,688 501,612 Off-Network Database Queries 806 923 5,303 4,744 Total Revenues $ 143,927 $ 125,923 $ 482,991 $ 506,356 (1) Based on "bill to" location on invoice. Syniverse Holdings, Inc. Reconciliation of Non GAAP Measures to GAAP (unaudited) (In thousands except per share information) Three Months Ended Year EndedDecember 31,
2009
December 31,
2008
December 31,
2009
December 31,
2008
Reconciliation to adjusted EBITDA Net income $ 18,289 $ 17,252 $ 68,371 $ 78,464 Interest expense, net 6,931 8,451 28,567 35,352 Provision for income taxes 10,026 10,579 37,771 46,797 Depreciation and amortization 18,191 14,111 60,397 55,344 Restructuring 2,583 - 2,583 (29 ) Non-cash stock compensation 2,651 1,467 7,939 5,205 BSG Wireless transition expenses 683 3,482 6,819 13,159 Messaging acquisition and transition expenses 2,910 - 4,666 - Adjusted EBITDA $ 62,264$ 55,342 $ 217,113 $ 234,292 Three Months Ended Year Ended
December 31,
2009
December 31,
2008
December 31,
2009
December 31,
2008
Reconciliation to adjusted net income and cash net income Net income $ 18,289 $ 17,252 $ 68,371 $ 78,464 Add provision for income taxes 10,026 10,579 37,771 46,797 Income before provision for income taxes 28,31527,831 106,142 125,261 Restructuring 2,583 - 2,583 (29 ) Non-cash stock compensation 2,651 1,467 7,939 5,205 BSG Wireless transition expenses 683 3,482 6,819 13,159 Messaging acquisition and transition expenses 2,910 - 4,666 - Purchase accounting amortization 9,041 7,293 29,769 28,650 Adjusted income before provision for income taxes 46,183
40,073 157,918 172,246 Less assumed provision for income taxes at 37.5% for 2009 and 39% for 2008 (17,319 ) (15,628 ) (59,219 ) (67,176 ) Adjusted net income 28,864 24,445 98,699
105,070 Add cash savings of tax deductible goodwill(1) 2,689 2,301 9,592 9,204 Cash net income $ 31,553 $ 26,746 $ 108,291
$ 114,274 Adjusted net income per share $ 0.42 $ 0.36 $ 1.45 $ 1.55 Cash net income per share $ 0.46 $ 0.39 $ 1.59 $ 1.69 Diluted shares outstanding 68,443 67,817 68,153 67,731 (1) Represents the cash benefit realized currently as a result of the tax deductibility of goodwill amortization. Three Months Ended Year Ended
December 31,
2009
December 31,
2008
December 31,
2009
December 31,
2008
Reconciliation to operating free cash flow Net cash provided by operating activities $ 59,297 $ 54,056 $ 142,373 $ 163,972 Capital expenditures (10,627 ) (11,413 ) (37,654 ) (40,819 ) Change in working capital due to payment of BSG pre-acquisition contractual obligation - - - 5,440 Operating Free Cash Flow $ 48,670 $ 42,643 $ 104,719 $ 128,593 Supplemental cash flow information: Cash interest paid $ 3,429 $ 5,036 $ 26,790 $ 36,054 Cash income taxes paid 5,738 2,051 29,182 11,110 Syniverse Holdings, Inc. Consolidated Balance Sheets (In thousands except per share information) Year EndedDecember 31,
2009
December 31,
2008
ASSETS Current assets: Cash $ 91,934 $ 165,605 Accounts receivable, net of allowances of $7,290 and $2,347, respectively 126,127 88,782 Prepaid and other current assets 34,622 20,971 Total current assets 252,683 275,358 Property and equipment, net 64,315 50,251 Capitalized software, net 75,249 60,184 Deferred costs, net 7,388 7,288 Goodwill 685,710 596,662 Identifiable intangibles, net 234,938 208,518 Other assets 3,250 1,573 Total assets $ 1,323,533 $ 1,199,834 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 15,785 $ 7,311 Accrued payroll and related benefits 9,832 20,111 Accrued interest 5,150 5,160 Accrued income taxes 1,468 9,891 Deferred revenues 6,197 4,260 Other accrued liabilities 40,886 28,975 Current portion of Term Note B 3,452 3,431 Total current liabilities 82,770 79,139 Long-term liabilities: Deferred tax liabilities 98,368 65,546 7 3/4% senior subordinated notes due 2013 175,000 175,000 Term Note B, less current maturities 334,012 335,382 Other long-term liabilities 9,534 8,925 Total liabilities 699,684 663,992 Stockholders' equity: Preferred stock, $0.001 par value; 300,000 shares authorized; no shares issued - - Common stock, $0.001 par value; 100,300,000 shares authorized; 69,574,505 shares issued and 69,382,507 shares outstanding and 68,847,632 shares issued and 68,455,634 shares outstanding at December 31, 2009 and December 31, 2008, respectively 69 68 Additional paid-in capital 483,227 471,524 Retained earnings 152,276 83,315 Accumulated other comprehensive loss (12,204 ) (19,035 ) Common stock held in treasury, at cost; 191,998 and 391,998 at December 31, 2009 and December 31, 2008, respectively (15 ) (30 ) Total Syniverse Holdings Inc. stockholders' equity 623,353 535,842 Noncontrolling interest 496 - Total equity 623,849 535,842 Total liabilities and stockholders' equity $ 1,323,533 $ 1,199,834 Syniverse Holdings, Inc Consolidated Statement of Cash Flows (In thousands except per share information) Year EndedDecember 31,
2009
December 31,
2008
December 31,
2007
Cash flows from operating activities Net income $ 68,371 $ 78,464 $ 52,419 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization including amortization of deferred debt issuance costs 62,125 57,115 44,104 Provision for (recovery of) uncollectible accounts 644 24 (169 ) Deferred income tax expense 27,446 25,751 26,127 Stock-based compensation 7,939 5,205 3,564 Other, net 82 3,198 1,075 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable (7,205 ) (10,999 ) 211 Other current assets (11,509 ) (1,317 ) (733 ) Accounts payable (9,917 ) 10,499 2,469 Other current liabilities 4,027 (3,875 ) (9,126 ) Other assets and liabilities 370 (93 ) 1,321 Net cash provided by operating activities 142,373 163,972 121,262 Cash flows from investing activities Capital expenditures (37,654 ) (40,819 ) (27,665 ) Acquisition of VM3 (174,503 ) - - Acquisition of WSI, net of acquired cash (3,099 ) - - Acquisition of BSG Wireless, net of acquired cash - (823 ) (273,553 ) Acquisition of ITHL, net of acquired cash - - (735 ) Net cash used in investing activities (215,256 ) (41,642 ) (301,953 ) Cash flows from financing activities Debt issuance costs paid - - (7,180 ) Borrowings under Term Note B - - 290,000 Principal payments on senior credit facility (3,444 ) (3,510 ) (81,566 ) Issuances of stock under employee stock purchase plan 932 823 730 Issuances of stock for stock options exercised 2,662 1,987 670 Minimum tax withholding on restricted stock awards (498 ) (681 ) (378 ) Excess tax benefit from stock-based compensation 684 479 - Purchase of treasury stock - (1 ) (1 ) Capital contribution from noncontrolling interest in a joint venture 981 - - Net cash provided by (used in) financing activities 1,317 (903 ) 202,275 Effect of exchange rate changes on cash (2,105 ) (4,908 ) 798 Net (decrease) increase in cash (73,671 ) 116,519 22,382 Cash at beginning of period 165,605 49,086 26,704 Cash at end of period $ 91,934 $ 165,605 $ 49,086 Supplemental cash flow information Interest paid $ 26,790 $ 36,054 $ 24,477 Income taxes paid 29,182 11,110 6,042 Syniverse Holdings, Inc. Reconciliation of Non GAAP Measures to GAAP (unaudited) (In millions) 2010E 2010E Low High Reconciliation to adjusted EBITDA Net income $ 70.5 $ 82.5 Interest expense, net 27.0 27.0 Provision for income taxes 47.0 55.0 Depreciation and amortization 76.5 76.5 Non-cash stock compensation 13.0 13.0 Messaging transition expenses 5.0 5.0 Adjusted EBITDA $ 239.0 $ 259.0 Reconciliation to adjusted net income and cash net income Net income $ 70.5 $ 82.5 Add provision for income taxes 47.0 55.0 Income before provision for income taxes 117.5 137.5 Adjustments to income before provision for income taxes Purchase accounting amortizations 37.0 37.0 Non-cash stock compensation 13.0 13.0 Messaging transition expenses 5.0 5.0 Adjusted income before provision for income taxes 55.0 55.0 Less assumed provision for income taxes (63.6 ) (72.6 ) Adjusted net income 108.9 119.9 Add cash savings of tax deductible goodwill(1) 11.1 11.1 Cash net income $ 120.0 $ 131.0 (1) Represents the cash benefit realized currently as a result of the tax deductibility of goodwill amortization.
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