Syniverse Technologies (NYSE:SVR), a leading provider of technology
and business solutions for the global mobile telecommunications
industry, today reported results for the second quarter 2007. Total
revenues were $91.4 million for the second quarter 2007, an 11.2%
increase compared to the second quarter 2006. Net revenues, which
exclude off-network database queries or pass-through revenue, were
$89.8 million for the second quarter 2007, a 13.7% increase
compared to the second quarter 2006. Net income was $11.7 million
in the second quarter 2007, a 23.0% increase compared to $9.5
million in the second quarter 2006. Cash net income, a non-GAAP
measure of profitability, was $17.9 million for the second quarter
2007, a 38.7% increase compared to the second quarter 2006. Cash
net income reflects the positive cash impact resulting from the
significant difference in amortization of goodwill for financial
reporting and tax purposes, and is determined by adding the cash
savings arising from the tax deductible goodwill amortization to
adjusted net income. Cash net income per diluted share was $0.26 in
the second quarter 2007, a 36.8% increase compared to the second
quarter 2006. Adjusted EBITDA, a non-GAAP measure of operating cash
flow, was $37.1 million for the second quarter 2007, a 26.7%
increase compared to $29.3 million in the second quarter 2006.
�Syniverse continued to execute its strategic plan in the second
quarter, with strong growth in data services and global expansion
driving financial outperformance. Key data services such as SMS-IG
for SMS interoperability and mobile data roaming saw accelerating
growth, while new contracts in Singapore, Hong Kong and Georgia
expanded our global reach,� said Tony Holcombe, CEO and President
of Syniverse. �Given the robust results through six months,
combined with strong organic trends that we anticipate for the
remainder of 2007, we are increasing our full year outlook.� Chief
Financial Officer David Hitchcock added: �Syniverse delivered
strong financial results in the second quarter, with organic
revenue growth of 6.3% year over year. This growth, combined with
continued cost management, led to a significant expansion in our
margins. Syniverse continues to generate significant free cash flow
from operations, and we�ve increased our free cash flow
expectations for the full year.� Second Quarter 2007 Service Line
Revenue Technology Interoperability Services Technology
Interoperability Services revenues were $42.1 million in the second
quarter 2007, a 36.6% increase compared to the second quarter 2006,
primarily driven by increases in data services such as SMS
interoperability and mobile data roaming as well as acquired
revenues from ITHL. Organic revenue growth was 17.6% while the
services acquired from ITHL in June 2006 contributed $5.8 million.
Network Services Network Services revenues were $31.2 million in
the second quarter 2007, a 1.0% decrease compared to the second
quarter 2006, as wireline migrations were mostly offset by organic
increases in data networking and SS7 connectivity. Number
Portability Services Number Portability Services revenues were $6.9
million in the second quarter 2007, a 3.9% decrease compared to the
second quarter 2006, as the price impact of certain renewals was
partially offset by increased revenues from new services provided
to Canadian mobile operators. Call Processing Services Call
Processing Services revenues were $8.4 million in the second
quarter 2007, a 15.6% increase compared to the second quarter 2006,
driven higher by Signaling Solutions revenue from increased
domestic and international roaming. Enterprise Solutions Enterprise
Solutions revenues were $1.1 million in the second quarter 2007.
Off-Network Database Queries (Pass-Through) Pass-through revenues
for the second quarter 2007 were $1.6 million. Second Quarter 2007
Business Highlights Agreement to acquire the wireless clearing and
financial settlement business of Billing Services Group. This
transaction remains subject to European Commission approval, and
Syniverse has filed for a 20-day extension to the Commission�s
Phase 2 review. Named David Hitchcock as Chief Financial Officer.
Appointed as Singapore�s only number portability centralized
database administrator. New GSM clearing contracts with SmartTone
Vodafone of Hong Kong and Mobitel of Georgia. Outlook Based on
strong results from the first six months and an improved outlook
for the remainder of the year, the company is increasing its
outlook as follows: Net Revenues $345 - $350 million Adjusted
EBITDA $133 - $138 million Cash Net Income $60 - $65 million
Additionally, the company expects to generate operating free cash
flow in excess of $75 million. Non-GAAP Measures Syniverse's Cash
Net Income is determined by adding the cash benefit of our
tax-deductible goodwill to Adjusted Net Income. This benefit is a
result of the differing treatments of approximately $362 million of
goodwill on our balance sheet created primarily from our
acquisitions from Verizon and of IOS North America. While not
amortized for GAAP purposes, goodwill amortization is deductible in
calculating our taxable income and, hence, reduces cash tax
liabilities. Syniverse's Adjusted Net Income is determined by
adding the following to net income (loss): provision for income
taxes, restructuring costs, amortization of intangibles recorded in
purchase accounting, loss on extinguishment of debt, headquarters
facilities move expenses, transition expenses of integrating the
IOS North America business, loss from disposal of assets, SFAS 123R
non-cash compensation, data processing contract termination fee,
litigation settlement and less non-operating gains to arrive at
Adjusted Net Income (loss) before provision for income taxes. This
adjusted pre-tax result is then further adjusted for a provision
for income taxes at an assumed long-term tax rate of 39%, which
excludes the effect of our NOLs. We present Adjusted Net Income and
Cash Net Income because we believe that Adjusted Net Income and
Cash Net Income 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 unusual adjustments, and Cash Net Income
provides further insight into the cash impact resulting from the
different treatments of goodwill for financial reporting and tax
purposes. Neither of these non-GAAP measures should be reviewed
without consideration of our net income and other GAAP measures.
Syniverse's Adjusted EBITDA is determined by adding the following
to net income (loss): net interest expense, provision for income
taxes, depreciation, amortization, restructuring charges, loss on
extinguishment of debt, headquarters facilities move expenses, the
transition expenses of integrating the IOS North America business,
loss from disposal of assets, SFAS 123R non-cash compensation, data
processing contract termination fee, litigation settlement and less
non-operating gains. A reconciliation of Adjusted EBITDA, Adjusted
Net Income and Cash Net Income to net income (loss) is presented in
the financial tables contained herein. Syniverse's Free Cash Flow
is determined by adding (or subtracting) the following to Net cash
provided by operating activities: (capital expenditures), cash paid
(received) in legal settlement and (accrued but not yet paid
acquisition earn-out). We present Adjusted EBITDA and Free Cash
Flow because we believe that Adjusted EBITDA and Free Cash Flow
provide useful information regarding our continuing operating
results. We rely on Adjusted EBITDA and Free Cash Flow as primary
measures to review and assess the operating performance of our
company and our management team in connection with our executive
compensation and bonus plans. We also review Adjusted EBITDA and
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 also utilize Adjusted
EBITDA and Free Cash Flow as an assessment of our overall liquidity
and our ability to meet our debt service obligations. We believe
that Adjusted EBITDA, Free Cash Flow, Adjusted Net Income and Cash
Net Income are useful to investors to provide disclosures of our
operating results on the same basis as that used by our management.
We also believe that these measures can assist investors in
comparing our performance to that of other companies on a
consistent basis without regard to certain items which do not
directly affect our ongoing operating performance or cash flows.
Adjusted EBITDA, Free Cash Flow, Adjusted Net Income and Cash Net
Income have limitations as analytical tools, and you should not
consider them in isolation or as a substitute for net income, cash
flows from operating activities, and other consolidated income or
cash flows statement data prepared in accordance with accounting
principles generally accepted in the United States. Because of
these limitations, Adjusted EBITDA and Free Cash Flow should not be
considered as measures of discretionary cash available to us to
invest in the growth of our business, and Adjusted Net Income and
Cash Net Income should not be considered as a replacement for net
income. We compensate for these limitations by relying primarily on
our GAAP results and using Adjusted EBITDA, Free Cash Flow,
Adjusted Net Income and Cash Net Income as supplemental
information. Second quarter 2007 Earnings Call Syniverse
Technologies will host a conference call today at 4:30 p.m. ET to
discuss these results. To participate on this call, U.S. callers
may dial toll-free 1-866-272-9941; international callers may dial
direct (+1) 617-213-8895. The passcode for this call is 77001491.
This event will be webcast live over the Internet in listen-only
mode at www.syniverse.com/investorevents. A replay of this call
will be available beginning shortly after the call concludes
through August 14, 2007, 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
94860182. In addition, this earnings call will be archived on the
Syniverse Technologies corporate web site www.syniverse.com under
Investors � Webcasts and Presentations. About Syniverse Syniverse
Technologies (NYSE:SVR) makes it possible for over 350
communications companies in more than 50 countries to address
market changes and demands as they deliver everything from voice
calls to sophisticated data and video services. By ensuring that
disparate technologies and standards interoperate, Syniverse allows
operators to provide seamless, interactive mobile services to their
subscribers wherever and whenever they need them. Celebrating its
20th anniversary in 2007, Syniverse is headquartered in Tampa,
Florida, U.S.A., and has offices in major cities around the globe.
Syniverse is ISO 9001:2000 certified and TL 9000 approved, adhering
to the principles of customer focus and quality improvement
practices. More information is available at www.syniverse.com.
Cautions about Forward-Looking Statements This press release
contains forward-looking statements, including statements about
business outlook and strategy, and statements about historical
results that may suggest trends for our business. These statements
are based on estimates and information available to us at the time
of this press release and are not guarantees of future performance.
Actual results could differ materially from our current
expectations as a result of many factors, including: unpredictable
quarterly fluctuations in our business; the effects of competition
or consumer and merchant use of our service; any adverse changes in
our agreements with our listings providers; the impact of
international expansion efforts on our business; changes in our tax
status; risks or uncertainties inherent in or related to the
integration of the business we proposed to acquire (including
unanticipated operating costs and business disruptions following
the proposed transaction); our ability to secure financing for the
proposed acquisition; the timing or impact of any regulatory or
governmental approvals; satisfaction of the various closing
conditions set forth in the share purchase agreement for the
proposed acquisition, and the timing of the closing of the proposed
acquisition. These and other risks and uncertainties associated
with our business are described in our filings with the Securities
and Exchange Commission. Syniverse Holdings, Inc. Condensed
Consolidated Statements of Operations (unaudited) (In thousands
except per share information) � Three Months Ended Three Months
Ended Six Months Ended Six Months Ended June 30, 2006 June 30, 2007
June 30, 2006 June 30, 2007 Technology Interoperability Services $
30,798 $ 42,061 $ 56,634 $ 79,856 Network Services 31,549 31,245
63,043 61,669 Number Portability Services 7,220 6,938 13,950 13,044
Call Processing Services 7,288 8,422 14,479 15,630 Enterprise
Solution � 2,084 � � 1,089 � � 4,214 � � 2,280 � Revenues excluding
Off Network Database Queries 78,939 89,755 152,320 172,479 Off
Network Database Queries � 3,255 � � 1,620 � � 5,291 � � 3,274 �
Total Revenues 82,194 91,375 157,611 175,753 � Cost of operations �
33,545 � � 34,075 � � 64,751 � � 67,516 � � Gross Margin 48,649
57,300 92,860 108,237 � Gross Margin % 59.2 % 62.7 % 58.9 % 61.6 %
Gross Margin % before Off Network Database Queries 61.6 % 63.8 %
61.0 % 62.8 % � Sales and marketing 6,871 7,652 12,364 14,464
General and administrative 13,673 13,616 30,984 27,603 Depreciation
and amortization 9,868 10,724 19,849 21,003 Restructuring � - � �
773 � � 338 � � 2,555 � � Operating income 18,237 24,535 29,325
42,612 � Other expense, net Interest expense, net (6,262 ) (5,572 )
(12,370 ) (11,196 ) Loss on extinguishment of debt - - (924 ) -
Other, net � 211 � � 75 � � 330 � � 128 � � (6,051 ) � (5,497 ) �
(12,964 ) � (11,068 ) � Income before provision for income taxes
12,186 19,038 16,361 31,544 � Provision for income taxes � 2,699 �
� 7,370 � � 3,324 � � 12,230 � � Net income $ 9,487 � $ 11,668 � $
13,037 � $ 19,314 � � � Net income per share Basic $ 0.14 $ 0.17 $
0.20 $ 0.29 Diluted $ 0.14 $ 0.17 $ 0.19 $ 0.29 � Shares used in
calculation Basic 66,909 67,294 66,828 67,257 Diluted 67,873 67,439
67,568 67,396 � � Selected Balance Sheet Data (unaudited): As of
(in thousands) June 30, 2007 Cash $ 48,239 � Senior subordinated
notes $ 175,000 Term note B � 135,865 � Total debt $ 310,865 � � �
Common stock and additional paid-in capital $ 460,804 Accumulated
deficit and other comprehensive income � (27,831 ) Total
stockholders' equity $ 432,973 � Syniverse Holdings, Inc.
Reconciliation of Non GAAP Measures to GAAP (unaudited) (In
thousands except per share information) � Three Months Ended Three
Months Ended Six Months Ended Six Months Ended June 30, 2006 June
30, 2007 June 30, 2006 June 30, 2007 � Reconciliation to adjusted
EBITDA Net income $ 9,487 $ 11,668 $ 13,037 $ 19,314 Interest
expense, net 6,262 5,572 12,370 11,196 Provision for income taxes
2,699 7,370 3,324 12,230 Depreciation and amortization 9,868 10,724
19,849 21,003 Restructuring - 773 338 2,555 SFAS 123R non-cash
compensation 329 984 329 1,469 IOS North America transition
expenses (258 ) - 794 - Facilities move expense 1,104 - 5,438 -
Loss on extinguishment of debt - - 924 - Non-operating gains � (211
) � - � � (330 ) � - � Adjusted EBITDA $ 29,280 � $ 37,091 � $
56,073 � $ 67,767 � � Three Months Ended Three Months Ended Six
Months Ended Six Months Ended June 30, 2006 June 30, 2007 June 30,
2006 June 30, 2007 Reconciliation to adjusted net income and cash
net income Net income $ 9,487 $ 11,668 $ 13,037 $ 19,314 Add
provision for income taxes � 2,699 � � 7,370 � � 3,324 � � 12,230 �
Income before provision for income taxes 12,186 19,038 16,361
31,544 � Restructuring - 773 338 2,555 SFAS 123R non-cash
compensation 329 984 329 1,469 Purchase accounting amortization
4,188 4,703 8,414 9,406 IOS North America transition expenses (258
) - 794 - Facilities move expense 1,104 - 5,438 - Loss on
extinguishment of debt - - 924 - Non-operating gains � (211 ) � - �
� (330 ) � - � Adjusted income before provision for income taxes
17,338 25,498 32,268 44,974 � Less assumed provision for income
taxes at 39% � (6,762 ) � (9,944 ) � (12,585 ) � (17,540 ) �
Adjusted net income 10,576 15,554 19,683 27,434 � Add cash savings
of tax deductible goodwill(1) � 2,300 � � 2,301 � � 4,600 � � 4,602
� � Cash net income $ 12,876 � $ 17,855 � $ 24,283 � $ 32,036 � �
Adjusted net income per share $ 0.16 $ 0.23 $ 0.29 $ 0.41 Cash net
income per share $ 0.19 $ 0.26 $ 0.36 $ 0.48 Diluted shares
outstanding 67,873 67,439 67,568 67,396 � (1) Represents the cash
benefit realized currently as a result of the tax deductibility of
goodwill amortization. � Three Months Ended Three Months Ended Six
Months Ended Six Months Ended June 30, 2006 June 30, 2007 June 30,
2006 June 30, 2007 Reconciliation to free cash flow Cash from
operations $ 24,997 $ 17,705 $ 26,348 $ 38,735 Capital expenditures
(6,046 ) (6,464 ) (10,821 ) (16,053 ) Less cash received in legal
settlement - - - (2,500 ) Change in working capital due to ITHL
contingent payment � - � � 6,895 � � - � � 6,160 � Free Cash Flows
$ 18,951 � $ 18,136 � $ 15,527 � $ 26,342 � � Supplemental
information: Cash interest paid $ 3,066 $ 2,511 $ 13,303 $ 11,763
Cash income taxes paid 21 1,650 21 1,650
Syniverse Hlgs (NYSE:SVR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Syniverse Hlgs (NYSE:SVR)
Historical Stock Chart
From Jul 2023 to Jul 2024