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Anticipated Impact to Full Year 2020 Financial Performance and Liquidity Update: The Company currently anticipates that the disruption caused byCOVID-19 will impact second quarter revenue and will likely extend into at least the third quarter of 2020, before beginning to recover. Due to this ongoing uncertainty, the Company is withdrawing its financial guidance for the year ending December 31, 2020 that was issued on February 20, 2020. The Company plans to provide further information on its first quarter 2020 earnings call.
In light of the current situation, the Company has initiated proactive cost management strategies. These include accelerating the Company’sForwardBound margin enhancement initiative of organizational and operating model efficiencies, hiring restrictions, reductions in third-party costs, certain compensation adjustments, and other initiatives. The Company has also implemented proactive cash conservation initiatives, including delaying some capital expenditures and locking in lower interest rates on certain variable rate debt.
The Company remains confident in its liquidity position, which includes cash on hand and access to its revolving credit facility. The Company is currently subject to only one financial maintenance covenant on its primary debt facilities, a First Lien Leverage Ratio of 4.5x, which applies through the maturity of these facilities in 2024. As of December 31, 2019, the Company’s First Lien Leverage Ratio, as calculated in accordance with the terms of these facilities, was 2.63x, and is expected to be safely within the financial maintenance covenant as of March 31, 2020.
Public Health Response
To address the public health challenge, the Company has created a public service educational initiative to raise awareness of the use of invasivebi-level positive airway pressure (BiPAP) machines to delay or remove the need for mechanical ventilation for intubatedCOVID-19 patients. Additionally, Syneos Health is contributing to a national effort in the UK to increase the level of COVID-19 testing by providing volunteers to execute drive-through testing. Macdonald, who also serves as Chair of ACRO is leading this industry effort, which is also being supported by several ACRO member companies.
First Quarter 2020 Results and Conference Call & Webcast
The Company will release its first quarter 2020 financial results on Thursday, April 30, 2020, prior to its earnings call at 8:00 a.m. ET.
Participants may access the conference call live via webcast on the Investor Relations section of the Syneos Health website atinvestor.syneoshealth.com. To participate via telephone, please dial +1 877 930 8058 within the United States or +1 253 336 7551 outside the United States, approximately 15 minutes prior to the scheduled start time. The conference ID for the call is 2042879.
A webcast replay will be available on the Investor Relations section of the Syneos Health website atinvestor.syneoshealth.com after 1:00 p.m. on April 30. In addition, an audio replay will be available for one week following the call and will be accessible by dialing +1 855 859 2056 within the United States or +1 404 537 3406 outside the United States. The replay ID is 2042879.
Financial Disclosure Advisory
The Company reports its financial results in accordance with U.S. generally accepted accounting principles. The expected financial results discussed in this press release are preliminary and represents the most current information available to the Company’s management, as financial closing procedures for the quarter ended March 31, 2020 are not yet complete. These estimates are not a comprehensive statement of the Company’s financial
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