United States securities and exchange commission logo
December 21, 2020
Jason Meggs
Chief Financial Officer
Syneos Health, Inc.
1030 Sync Street
North Carolina 27560-5468
Re: Syneos Health, Inc.
Form 10-K for
Fiscal Year Ended December 31, 2019
Filed February 20,
2020
Form 8-K Furnished
October 29, 2020
File No. 001-36730
Dear Mr. Meggs:
We have reviewed your filings and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2019
Notes to Consolidated Financial Statements
Note 1. Basis of Presentation and Summary of Significant Accounting
Policies
Cash and Cash Equivalents, page 91
1. We note that certain of
your subsidiaries participate in a notional cash pooling
arrangement to manage
global liquidity requirements. The parties to the arrangement
combine their cash
balances in pooling accounts with the ability to offset bank overdrafts
of one subsidiary
against positive cash account balances maintained in another
subsidiary s bank
account at the same financial institution. Please tell us whether you
intend to and have set
off such amounts with the counterparty. Refer to ASC 210-20-45-1
to 5.
Jason Meggs
FirstName LastNameJason Meggs
Syneos Health, Inc.
Comapany21,
December NameSyneos
2020 Health, Inc.
December
Page 2 21, 2020 Page 2
FirstName LastName
Revenue Recognition, page 96
2. We note the majority of your Clinical Solutions segment revenue is for
service offerings
that range in duration from a few months to several years and
typically represent a single
performance obligation. Revenue is recognized over time using costs
incurred to date
relative to total estimated costs to complete ( cost-to-cost measure
of progress ). We also
note the estimate of total revenue and costs to completion requires
significant judgment.
Contract estimates are based on various assumptions to project future
outcomes of events
that often span several years, as well on evaluations and updates made
on an ongoing
basis. These estimates are reviewed periodically and any adjustments
are recognized on a
cumulative catch up basis in the period they become known. Updates and
adjustments to
estimates are likely to result in variability in revenue recognized
from period to period and
may cause unexpected variability in our operating results.
Please tell us and quantify in the notes to your financial statements
in annual and quarterly
reports the aggregate amount and related earnings per share impact of
changes in contract
estimates for each period presented. Refer to ASC 250-10-50-4 and
270-10-45-14 for
guidance. Please also revise your results of operations disclosure in
MD&A to separately
quantify gross favorable and gross unfavorable changes in estimates
material to either
consolidated or segment results, accompanied by an appropriate level
of analysis. Please
provide us with your intended revised disclosure.
12. Revenue from Contracts with Customers, page 128
3. Please tell us your consideration of providing disaggregated revenue
from contracts with
customers pursuant to ASC 606-10-50-5 and 55-89 through 55-91. In this
regard, we note
from your disclosures on page 9 to 15 and page 60 that you provide
multiple service
offerings.
Exhibits
4. We note that Article XI, Section 11.1 of your Amended and Restated
Certificate of
Incorporation provides that the Court of Chancery of the State of
Delaware is the sole and
exclusive forum for any derivative action or proceeding brought on
behalf of the
Corporation. In future filings, please clearly describe the
provision in your disclosure,
including any risks or other impact on investors related to the
provision. Risks may
include, but are not limited to, increased costs to bring a claim and
that these provisions
can discourage claims or limit investors' ability to bring a claim in
a judicial forum that
they find favorable. Please also tell us, and disclose in future
filings, whether this
provision applies to actions arising under the Exchange Act and/or the
Securities Act. In
this regard, we note that Section 27 of the Exchange Act creates
exclusive federal
jurisdiction over all suits brought to enforce any duty or liability
created by the Exchange
Act or the rules and regulations thereunder. We also note that Section
22 of the Securities
Act creates concurrent jurisdiction for federal and state courts over
all suits brought to
Jason Meggs
Syneos Health, Inc.
December 21, 2020
Page 3
enforce any duty or liability created by the Securities Act or the
rules and regulations
thereunder. If the provision applies to Securities Act claims, please
also disclose in future
filings that there is uncertainty as to whether a court would enforce
such provision and
that investors cannot waive compliance with the federal securities
laws and the rules and
regulations thereunder.
Form 8-K Furnished October 29, 2020
Exhibit 99.1
Highlights, page 1
5. We note the following in regards to your presentation of non-GAAP
financial measures in
the "Highlights" section of your earnings release:
Discussion is provided regarding Q3 growth of your "Adjusted
diluted earnings per
share" and "Adjusted EBITDA" measures without providing similar
discussion for
the comparable GAAP measure;
Presentation is provided of your "Adjusted EBITDA margin"
without providing
similar presentation of the comparable GAAP measure;
In the second to last bullet point, you highlight your
"adjusted EBITDA" and
"adjusted diluted earnings per share" guidance without providing
comparable GAAP
guidance.
When presenting non-GAAP measures in your earnings release, please
present the
most directly comparable GAAP measure with equal or greater
prominence. Refer to
Item 10(e)(1)(i)(A) of Regulation S-K and Question 102.10 of the
staff's Compliance
and Disclosure Interpretation on Non-GAAP Financial Measures ("C&DI
s").
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Abe Friedman at 202-551-8298 or Lyn Shenk at
202-551-3380 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Nicholas Lamparski at 202-551-4695 or Dietrich King at 202-551-8071
with any other
questions.
FirstName LastNameJason Meggs Sincerely,
Comapany NameSyneos Health, Inc.
Division of
Corporation Finance
December 21, 2020 Page 3 Office of Trade
& Services
FirstName LastName