Exhibit 99.1
FOR IMMEDIATE RELEASE
Syniverse Reports Third Quarter 2008 Results
Company achieves record net revenues of $135.8 million for quarter
TAMPA, Fla. – Nov. 5, 2008 –Syniverse Holdings, Inc. (NYSE: SVR), a leading provider of technology and business solutions for the global telecommunications industry, today reported results for the third quarter 2008.
• | Total revenue for third quarter 2008 was $137.2 million, a 36.8% increase compared to third quarter 2007. |
• | Net revenue, which excludes off-network database queries, was $135.8 million, a 36.9% increase compared to third quarter 2007. |
• | Net income was $25.5 million, or $0.37 per diluted share, 54.5% and 53.2% increases respectively, compared to third quarter 2007. |
• | Cash net income, a non-GAAP financial measure described below, was $34.2 million, or $0.50 per diluted share, 54.7% and 53.4% increases, respectively, compared to third quarter 2007. |
• | Adjusted EBITDA, a non-GAAP financial measure described below, was $67.6 million, a 51.0% increase compared to third quarter 2007. |
• | Cash flow from operations was $45.8 million, a 56.3% increase compared to the third quarter 2007. |
“I am pleased to report that Syniverse has once again achieved solid results this quarter,” said Tony Holcombe, President and CEO. “Our seventh consecutive quarter of organic growth was driven by the ongoing strong performance of our technology interoperability business. The people and technology investments we made early last year continue to generate solid returns for our shareholders. Furthermore, a global renewal rate of 99 percent is a clear proof point of the service quality and value we provide our customers.”
David Hitchcock, Executive Vice President and CFO, added, “I am proud to announce that the company generated record quarterly net revenues of $135.8 million as a result of organic growth that exceeded 20%. These results contributed free cash flow of $36.7 million for the quarter.”
Please refer to the information set forth below under the captions “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.
Syniverse Technologies | 8125 Highwoods Palm Way, Tampa, FL USA 33647-1776 | 1.813.637.5000 | www.syniverse.com
Third Quarter 2008 Service Line Revenue
Technology Interoperability Services
Technology interoperability services revenues were $88.6 million in the quarter, a 73.6% increase compared to third quarter 2007. The increase includes $15.8 million of revenues attributable to BSG Wireless, which was included in Syniverse’s income statement beginning on January.1, 2008. Excluding revenues from BSG Wireless, technology interoperability revenue grew 42.7%, driven by increases in messaging and mobile data services, clearing house services and UniRoam®.
Network Services
Network services revenues were $31.1 million in the quarter, a 2.8% decrease compared to third quarter 2007. Increases in SS7 transport, data networking and Visibility® Services were offset by expected continued declines in other parts of the segment.
Number Portability Services
Number portability services revenues were $8.1 million in the quarter, a 14.4% increase compared to third quarter 2007. Results were driven by increased porting volumes in 2008.
Call Processing Services
Call processing services revenues were $7.5 million in the quarter, a 7.9% decrease compared to third quarter 2007. This decrease was primarily due to continued declines in legacy fraud-related services.
Enterprise Solutions
Enterprise solutions revenues were $0.5 million in third quarter 2008.
Off-Network Database Queries (Pass-Through)
Pass-through revenues for third quarter 2008 were $1.4 million.
Third Quarter 2008 Business Highlights
• | The successful integration of BSG Wireless continues on schedule. |
• | Colibria and Syniverse announced a joint development agreement for an advanced messaging hub that will drive seamless interworking and interconnections between IM, SMS, MMS and presence applications for mobile operators. |
• | Entel PCS switched to Syniverse’ complete set of roaming solutions. |
• | Verizon Wireless and Syniverse announced a three-year contract extension for ongoing data clearing and roaming services. |
Outlook
Syniverse reiterates its existing guidance for 2008:
Net Revenues | $485 - 495 million | |
Net Income | $69 - 74 million | |
Adjusted EBITDA | $223 - $230 million | |
Cash Net Income | $105 - $110 million | |
Operating Free Cash Flow | in excess of $118 million |
Assuming we continue to be successful integrating BSG Wireless, Syniverse expects to realize approximately $12 million of annualized cost savings. Approximately $4 million of the expected cost savings are expected to be realized in 2008, with the remainder to be realized in 2009. Adjusted EBITDA and Cash Net income have been adjusted to exclude the one-time costs related to integrating the businesses and the duplicative costs that are expected to be eliminated by the end of 2009.
Syniverse Technologies | 8125 Highwoods Palm Way, Tampa, FL USA 33647-1776 | 1.813.637.5000 | www.syniverse.com
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, SFAS 123R non-cash compensation, purchase accounting amortization and BSG Wireless transition expenses, (ii) adjusting the resulting pre-tax sum for a provision for income taxes at an assumed long-term tax rate of 39%, which excludes the effect of our net operating losses, and (iii) addint to that sum the cash benefit of our tax-deductible goodwill. The cash benefit is a result of the differing treatments of approximately $362 million of goodwill on our balance sheet which primarily is the result of acquisitions that we made from Verizon and IOS North America. 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, SFAS 123R non-cash compensation, and BSG Wireless transition expenses.
Syniverse’s operating free cash flow is determined by adding the following items to (or subtracting them from) net cash provided by operating activities: (capital expenditures), (cash received in legal settlement), change in working capital due to ITHL contingent payment and change in working capital due to payment of BSG pre-acquisition contractual obligation.
A reconciliation of each 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 and cash net income 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 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 company and 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.
Syniverse Technologies | 8125 Highwoods Palm Way, Tampa, FL USA 33647-1776 | 1.813.637.5000 | www.syniverse.com
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.
Third Quarter 2008 Earnings Call
Syniverse will host a conference call today at 4:30 p.m. ET to discuss these results, and the accompanying slides for the conference call have been posted to the Syniverse website atwww.syniverse.com. To participate on this call, U.S. callers may dial toll-free free 1-866-713-8565; international callers may dial direct (+1) 617-597-5324. The passcode for this call is 69317082. This event also will be webcast live over the Internet in listen-only mode atwww.syniverse.com/investorevents.
A replay of this call will be available beginning at approximately 6:30 p.m. ET today and will remain available through Nov. 18 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 87044381.
About Syniverse
Syniverse Technologies (NYSE:SVR) provides solutions that allow more than 600 communications companies in over 120 countries to provide seamless mobile services by making it possible for disparate technologies and standards to interoperate. Syniverse’s flexibility and customer focus permit its customers to quickly react to market changes and demands, enabling the delivery of everything from voice calls to sophisticated data and video services wherever and whenever subscribers need them. With more than 20 years in the industry, 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 atwww.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 and Section 21E of the Securities Act of 1934, 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 ability to continue to report positive results in future periods and/or to continue to experience organic growth; Syniverse’s ability to realize the benefits of investments that it has made in its people and technology; Syniverse’s ability to continue to realize a positive global renewal rate; Syniverse’s ability to provide a high level of service quality and value to its customers; Syniverse’s ability to successfully and timely integrate BSG Wireless, and to realize the anticipated cost savings of that integration when and in the amounts anticipated; and Syniverse’s guidance for 2008, 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 2008, as well as the assumptions, estimates, and judgments applied in creating such guidance.
Syniverse Technologies | 8125 Highwoods Palm Way, Tampa, FL USA 33647-1776 | 1.813.637.5000 | www.syniverse.com
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 December 31, 2007 under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations – 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.
# # #
For more information:
Jim Huseby
Syniverse Investor Relations
+1 (813) 637-5007 (office)
Jim.huseby@syniverse.com
Diane Rose
Syniverse Corporate Communications
+1 813.637.5077 (office)
diane.rose@syniverse.com
Syniverse Technologies | 8125 Highwoods Palm Way, Tampa, FL USA 33647-1776 | 1.813.637.5000 | www.syniverse.com
Syniverse Holdings, Inc.
Condensed Consolidated Statements of Income (unaudited)
and Other Supplemental Information
(In thousands except per share information)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2008 | September 30, 2007 | September 30, 2008 | September 30, 2007 | |||||||||||||
Technology Interoperability Services | $ | 88,568 | $ | 51,006 | $ | 237,577 | $ | 130,862 | ||||||||
Network Services | 31,097 | 31,990 | 92,382 | 93,659 | ||||||||||||
Number Portability Services | 8,076 | 7,060 | 21,462 | 20,104 | ||||||||||||
Call Processing Services | 7,546 | 8,191 | 23,248 | 23,821 | ||||||||||||
Enterprise Solutions | 524 | 943 | 1,943 | 3,223 | ||||||||||||
Revenues excluding Off Network Database Queries | 135,811 | 99,190 | 376,612 | 271,669 | ||||||||||||
Off Network Database Queries | 1,358 | 1,088 | 3,821 | 4,362 | ||||||||||||
Total Revenues | 137,169 | 100,278 | 380,433 | 276,031 | ||||||||||||
Cost of operations | 43,133 | 34,584 | 122,700 | 102,100 | ||||||||||||
Gross Margin | 94,036 | 65,694 | 257,733 | 173,931 | ||||||||||||
Gross Margin % | 68.6 | % | 65.5 | % | 67.7 | % | 63.0 | % | ||||||||
Gross Margin % before Off Network Database Queries | 69.2 | % | 66.2 | % | 68.4 | % | 64.0 | % | ||||||||
Sales and marketing | 11,071 | 7,483 | 34,025 | 21,947 | ||||||||||||
General and administrative | 19,784 | 14,317 | 57,794 | 41,920 | ||||||||||||
Depreciation and amortization | 13,809 | 10,861 | 41,233 | 31,864 | ||||||||||||
Restructuring | (46 | ) | (319 | ) | (29 | ) | 2,236 | |||||||||
Operating income | 49,418 | 33,352 | 124,710 | 75,964 | ||||||||||||
Other expense, net | ||||||||||||||||
Interest expense, net | (8,686 | ) | (6,201 | ) | (26,901 | ) | (17,397 | ) | ||||||||
Other, net | (164 | ) | (90 | ) | (379 | ) | 38 | |||||||||
(8,850 | ) | (6,291 | ) | (27,280 | ) | (17,359 | ) | |||||||||
Income before provision for income taxes | 40,568 | 27,061 | 97,430 | 58,605 | ||||||||||||
Provision for income taxes | 15,101 | 10,582 | 36,218 | 22,812 | ||||||||||||
Net income | $ | 25,467 | $ | 16,479 | $ | 61,212 | $ | 35,793 | ||||||||
Net income per share | ||||||||||||||||
Basic | $ | 0.38 | $ | 0.24 | $ | 0.91 | $ | 0.53 | ||||||||
Diluted | $ | 0.37 | $ | 0.24 | $ | 0.90 | $ | 0.53 | ||||||||
Shares used in calculation | ||||||||||||||||
Basic | 67,757 | 67,377 | 67,629 | 67,298 | ||||||||||||
Diluted | 68,204 | 67,607 | 68,075 | 67,467 | ||||||||||||
Other Supplemental Information: | ||||||||||||||||
Revenue by region (1) (unaudited): | Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2008 | September 30, 2007 | September 30, 2008 | September 30, 2007 | |||||||||||||
North America (U.S. and Canada) | $ | 98,346 | $ | 77,274 | $ | 271,491 | $ | 213,219 | ||||||||
Asia Pacific | 10,357 | 11,279 | 32,430 | 30,528 | ||||||||||||
Caribbean and Latin America (includes Mexico) | 8,099 | 6,243 | 23,413 | 17,027 | ||||||||||||
Europe, Middle East and Africa | 19,009 | 4,394 | 49,278 | 10,895 | ||||||||||||
Subtotal non- North American Revenue | 37,465 | 21,916 | 105,121 | 58,450 | ||||||||||||
Revenues excluding Off Network Database Queries | 135,811 | 99,190 | 376,612 | 271,669 | ||||||||||||
Off Network Database Queries | 1,358 | 1,088 | 3,821 | 4,362 | ||||||||||||
Total Revenues | $ | 137,169 | $ | 100,278 | $ | 380,433 | $ | 276,031 | ||||||||
(1) | Based on “bill to” location on invoice. |
Syniverse Holdings, Inc.
Condensed Consolidated Balance Sheets
(In thousands except share information)
September 30, 2008 | December 31, 2007 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 126,035 | $ | 49,086 | ||||
Accounts receivable, net of allowances of $644 and $762, respectively | 98,599 | 79,378 | ||||||
Prepaid and other current assets | 16,099 | 12,240 | ||||||
Total current assets | 240,733 | 140,704 | ||||||
Property and equipment, net | 47,699 | 43,856 | ||||||
Capitalized software, net | 60,740 | 62,615 | ||||||
Deferred costs, net | 9,456 | 10,786 | ||||||
Goodwill | 608,952 | 616,304 | ||||||
Identifiable intangibles, net | 215,791 | 232,023 | ||||||
Other assets | 2,130 | 1,262 | ||||||
Total assets | $ | 1,185,501 | $ | 1,107,550 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 7,233 | $ | 5,006 | ||||
Accrued payroll and related benefits | 17,935 | 12,016 | ||||||
Accrued interest | 1,797 | 5,910 | ||||||
Deferred revenues | 5,422 | 5,327 | ||||||
Other accrued liabilities | 30,994 | 34,789 | ||||||
Current portion of Term Note B | 3,463 | 3,459 | ||||||
Total current liabilities | 66,844 | 66,507 | ||||||
Long-term liabilities: | ||||||||
Deferred tax liabilities | 65,086 | 43,587 | ||||||
7 3/4% senior subordinated notes due 2013 | 175,000 | 175,000 | ||||||
Term Note B, less current maturities | 339,354 | 344,476 | ||||||
Other long-term liabilities | 6,457 | 7,188 | ||||||
Total long-term liabilities | 585,897 | 570,251 | ||||||
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; 68,844,182 shares issued and 68,446,184 shares outstanding and 68,683,075 shares issued and 68,302,956 shares outstanding at September 30, 2008 and December 31, 2007, respectively | 68 | 68 | ||||||
Additional paid-in capital | 469,198 | 463,711 | ||||||
Retained earnings | 66,063 | 4,851 | ||||||
Accumulated other comprehensive income | (2,539 | ) | 2,191 | |||||
Common stock held in treasury, at cost; 391,998 and 380,119 at September 30, 2008 and December 31, 2007, respectively | (30 | ) | (29 | ) | ||||
Total stockholders’ equity | 532,760 | 470,792 | ||||||
Total liabilities and stockholders’ equity | $ | 1,185,501 | $ | 1,107,550 | ||||
Syniverse Holdings, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
Nine Months Ended September 30, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 61,212 | $ | 35,793 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization including amortization of deferred debt issuance costs | 42,563 | 32,661 | ||||||
Provision for (recovery of) uncollectible accounts | (129 | ) | 203 | |||||
Deferred income tax expense | 24,006 | 19,086 | ||||||
Stock-based compensation | 3,738 | 2,445 | ||||||
Loss on disposition of property | 478 | 1,061 | ||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||
Accounts receivable | (19,664 | ) | (8,314 | ) | ||||
Other current assets | (3,518 | ) | (1,513 | ) | ||||
Accounts payable | 8,205 | 618 | ||||||
Other current liabilities | (6,949 | ) | (10,022 | ) | ||||
Other assets and liabilities | (26 | ) | (3,982 | ) | ||||
Net cash provided by operating activities | 109,916 | 68,036 | ||||||
Cash flows from investing activities | ||||||||
Capital expenditures | (29,406 | ) | (21,974 | ) | ||||
Acquisition of BSG Wireless | (823 | ) | — | |||||
Acquisition of ITHL | — | (735 | ) | |||||
Net cash used in investing activities | (30,229 | ) | (22,709 | ) | ||||
Cash flows from financing activities | ||||||||
Debt issuance costs | — | (6,428 | ) | |||||
Principal payments on senior credit facility | (2,654 | ) | (24,561 | ) | ||||
Employee stock purchase plan | 388 | 430 | ||||||
Stock options exercised | 1,951 | 294 | ||||||
Minimum tax withholding on restricted stock awards | (590 | ) | (275 | ) | ||||
Purchase of treasury stock | (1 | ) | (1 | ) | ||||
Net cash used in financing activities | (906 | ) | (30,541 | ) | ||||
Effect of exchange rate changes on cash | (1,832 | ) | 552 | |||||
Net increase in cash | 76,949 | 15,338 | ||||||
Cash at beginning of period | 49,086 | 26,704 | ||||||
Cash at end of period | $ | 126,035 | $ | 42,042 | ||||
Supplemental cash flow information | ||||||||
Interest paid | $ | 30,018 | $ | 21,421 | ||||
Income taxes paid | 9,059 | 2,826 |
Syniverse Holdings, Inc.
Reconciliation of Non GAAP Measures to GAAP (unaudited)
(In thousands except per share information)
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2008 | September 30, 2007 | September 30, 2008 | September 30, 2007 | ||||||||||||
Reconciliation to adjusted EBITDA | |||||||||||||||
Net income | $ | 25,467 | $ | 16,479 | $ | 61,212 | $ | 35,793 | |||||||
Interest expense, net | 8,686 | 6,201 | 26,901 | 17,397 | |||||||||||
Provision for income taxes | 15,101 | 10,582 | 36,218 | 22,812 | |||||||||||
Depreciation and amortization | 13,809 | 10,861 | 41,233 | 31,864 | |||||||||||
Restructuring | (46 | ) | (319 | ) | (29 | ) | 2,236 | ||||||||
SFAS 123R non-cash compensation | 1,314 | 976 | 3,738 | 2,445 | |||||||||||
BSG Wireless transition expenses | 3,276 | — | 9,677 | — | |||||||||||
Adjusted EBITDA | $ | 67,607 | $ | 44,780 | $ | 178,950 | $ | 112,547 | |||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2008 | September 30, 2007 | September 30, 2008 | September 30, 2007 | |||||||||||||
Reconciliation to adjusted net income and cash net income | ||||||||||||||||
Net income | $ | 25,467 | $ | 16,479 | $ | 61,212 | $ | 35,793 | ||||||||
Add provision for income taxes | 15,101 | 10,582 | 36,218 | 22,812 | ||||||||||||
Income before provision for income taxes | 40,568 | 27,061 | 97,430 | 58,605 | ||||||||||||
Restructuring | (46 | ) | (319 | ) | (29 | ) | 2,236 | |||||||||
SFAS 123R non-cash compensation | 1,314 | 976 | 3,738 | 2,445 | ||||||||||||
Purchase accounting amortization | 7,119 | 4,703 | 21,357 | 14,109 | ||||||||||||
BSG Wireless transition expenses | 3,276 | — | 9,677 | — | ||||||||||||
Adjusted income before provision for income taxes | 52,231 | 32,421 | 132,173 | 77,395 | ||||||||||||
Less assumed provision for income taxes at 39% | (20,370 | ) | (12,644 | ) | (51,548 | ) | (30,184 | ) | ||||||||
Adjusted net income | 31,861 | 19,777 | 80,625 | 47,211 | ||||||||||||
Add cash savings of tax deductible goodwill(1) | 2,301 | 2,301 | 6,903 | 6,903 | ||||||||||||
Cash net income | $ | 34,162 | $ | 22,078 | $ | 87,528 | $ | 54,114 | ||||||||
Adjusted net income per share | $ | 0.47 | $ | 0.29 | $ | 1.18 | $ | 0.70 | ||||||||
Cash net income per share | $ | 0.50 | $ | 0.33 | $ | 1.29 | $ | 0.80 | ||||||||
Diluted shares outstanding | 68,204 | 67,607 | 68,075 | 67,467 |
1) | Represents the cash benefit realized currently as a result of the tax deductibility of goodwill amortization. |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2008 | September 30, 2007 | September 30, 2008 | September 30, 2007 | |||||||||||||
Reconciliation to operating free cash flow | ||||||||||||||||
Net cash provided by operating activities | $ | 45,790 | $ | 29,301 | $ | 109,916 | $ | 68,036 | ||||||||
Capital expenditures | (9,045 | ) | (5,921 | ) | (29,406 | ) | (21,974 | ) | ||||||||
Cash received in legal settlement | — | — | — | (2,500 | ) | |||||||||||
Change in working capital due to ITHL contingent payment | — | — | — | 6,160 | ||||||||||||
Change in working capital due to payment of BSG pre-acquisition contractual obligation | — | — | 5,440 | — | ||||||||||||
Operating Free Cash Flow | $ | 36,745 | $ | 23,380 | $ | 85,950 | $ | 49,722 | ||||||||
Supplemental cash flow information: | ||||||||||||||||
Cash interest paid | $ | 15,838 | $ | 9,658 | $ | 31,018 | $ | 21,421 | ||||||||
Cash income taxes paid | 2,692 | 1,176 | 9,059 | 2,826 |
Syniverse Holdings, Inc.
Reconciliation of Non GAAP Measure Estimates to GAAP (unaudited)
(in millions) | 2008E Low | 2008E High | ||||||
Reconciliation to adjusted EBITDA | ||||||||
Net income | $ | 69.0 | $ | 74.0 | ||||
Interest expense, net | 36.0 | 36.0 | ||||||
Provision for income taxes | 42.0 | 44.0 | ||||||
Depreciation and amortization(1) | 57.0 | 57.0 | ||||||
SFAS 123R non-cash compensation | 5.5 | 5.5 | ||||||
BSGW transition expenses(2) | 13.5 | 13.5 | ||||||
Adjusted EBITDA | $ | 223.0 | $ | 230.0 | ||||
Reconciliation to adjusted net income and cash net income | ||||||||
Net income | $ | 69.0 | $ | 74.0 | ||||
Add provision for income taxes | 42.0 | 44.0 | ||||||
Income before provision for income taxes | 111.0 | 118.0 | ||||||
Adjustments income before provision for income taxes | ||||||||
Purchase accounting amortization | 28.5 | 28.5 | ||||||
SFAS 123R non-cash compensation | 5.5 | 5.5 | ||||||
BSGW transition expenses(2) | 13.5 | 13.5 | ||||||
Adjusted income before provision for income taxes | 158.5 | 165.5 | ||||||
Less assumed provision for income taxes | (62.7 | ) | (64.7 | ) | ||||
Adjusted net income | 95.8 | 100.8 | ||||||
Add cash savings of tax deductible goodwill(3) | 9.2 | 9.2 | ||||||
Cash net income | $ | 105.0 | $ | 110.0 | ||||
1) | Includes preliminary estimates of purchase accounting amortizations for BSGW. |
2) | Represents certain costs that we do not expect to continue in the business upon full integration including: |
a) | Integration specific expenses, including any temporary headcount needed for the migrations, travel for the integration teams, and other one-time costs related to the integration project and: |
b) | Duplicative data processing and headcount expenses that we do not plan to remain following the full integration. |
3) | Represents the cash benefit realized currently as a result of the tax deductibility of goodwill amortization. |