Syniverse Holdings, Inc. (NYSE:SVR), a leading provider of
mission-critical technology services to wireless telecommunications
companies worldwide, today reported results for the third quarter
2006. Total revenues were $93.6 million for the third quarter 2006,
a 1.8% increase compared to the third quarter 2005. Net revenue,
which excludes off-network database queries or pass-through
revenue, was $92.0 million for the third quarter 2006, a 3.5%
increase compared to the third quarter 2005. Net income
attributable to common stockholders was $17.6 million in the third
quarter 2006, compared to a loss of $0.3 million in the third
quarter 2005. Cash net income, a non-GAAP measure of profitability,
was $19.3 million for the third quarter 2006, nearly flat compared
to the third quarter 2005. 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 share was $0.28 in the third quarter 2006, on par with
the $0.28 reported in the third quarter 2005. Adjusted EBITDA, a
non-GAAP measure of operating cash flow, was $40.5 million for the
third quarter 2006, compared to $41.1 million in the third quarter
2005. �We continued to make progress on our strategic plan in the
third quarter,� said Syniverse President and CEO Tony Holcombe. �We
reinforced our leading global position in number portability by
winning a contract with the Canadian carriers and began integrating
Hong Kong-based ITHL, which was acquired in June. We continued to
migrate Vodafone properties to our platform during the quarter.
However, several properties have requested additional
customization, delaying the migrations of these properties until
the first quarter 2007.� Chief Financial Officer Ray Lawless added,
�During the third quarter, we exceeded our net revenue and cash net
income guidance, and recorded adjusted EBITDA in the upper half of
our guidance. Results this quarter benefited from the inclusion of
ITHL for the first time and seasonal effects that we typically see
in the third quarter.� �Syniverse continued to generate significant
cash from operations while investing in our business to enhance
future profitability,� said Lawless. �We generated $27.3 million
during the third quarter, and expect to exceed that in the fourth
quarter.� Third Quarter 2006 Service Line Revenue Technology
Interoperability Services Technology Interoperability revenues were
$43.0 million in the third quarter 2006, a 40.2% increase compared
to third quarter 2005, primarily driven by the inclusion of ITHL,
increases in clearing, Message Manager, UniRoam, and Mobile Data
Roaming. Network Services Network Services revenues were $31.9
million in the third quarter 2006, a 9.4% decrease compared to
third quarter 2005, primarily driven by previously disclosed
migrations and competitive pricing, partially offset by increases
in data networking. Number Portability Services Number Portability
revenues were $7.7 million in the third quarter 2006, a 42.2%
decrease compared to the third quarter 2005, primarily driven by
the previously disclosed migration of the Sprint port center. Call
Processing Services Call Processing Services revenues were $7.6
million in the third quarter 2006, a 6.1% increase compared to the
third quarter 2005, with increases in international roaming
supported by Signaling Solutions offset by a decline in fraud
services. Enterprise Solutions Enterprise Solutions revenues were
$1.8 million in the third quarter 2006. Off-Network Database
Queries (Pass-Through) Pass-through revenues for the third quarter
2006 were $1.6 million. Third Quarter 2006 Business Highlights
Awarded a contract to provide Wireless Number Portability to a
group of 10 Canadian carriers. Won a consolidated service contract
with Centennial Wireless, adding Network and Number Portability
Services to the existing service relationship. Continued
international progress with new global customer wins across
multiple products, including clearing & settlement and mobile
data roaming. Completed successful migrations of four operating
companies from Vodafone to Syniverse platforms. Outlook The company
provides the following estimates for 2006: Full Year 2006 Net
Revenues $328 million - $330 million Adjusted EBITDA $131 million -
$133 million Cash Net Income $59 million - $60 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 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 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. We present Adjusted EBITDA
because we believe that Adjusted EBITDA provides useful information
regarding our continuing operating results. We rely on Adjusted
EBITDA as a primary measure 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 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 as an assessment of our overall liquidity and our ability to
meet our debt service obligations. We believe that Adjusted EBITDA,
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, 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 should not be considered a
measure 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, Adjusted Net Income and Cash Net
Income as supplemental information. Third Quarter 2006 Earnings
Call Syniverse Technologies will host a conference call at 4:30
p.m. (ET) to discuss these results. To participate on the call,
U.S. callers may dial toll-free 1-866-713-8565; international
callers may dial direct (+1) 617-597-5324. The passcode for the
call is 21800507. The event will be webcast live over the Internet
in listen-only mode at http://www.syniverse.com/investorevents. A
replay of the call will be available beginning Nov. 7, 2006, at
6:30 p.m. EST through Nov. 21, 2006, at 11:59 p.m. EST. 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 60891097. 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) is a leading
provider of mission-critical technology services to wireless
telecommunications companies worldwide. Syniverse solutions
simplify technology complexities by integrating disparate carriers'
systems and networks in order to provide seamless global voice and
data communications to wireless subscribers. Carriers depend on
Syniverse's integrated suite of services to solve their most
complex technology challenges and to facilitate the rapid
deployment of next generation wireless services. Syniverse provides
services to over 350 telecommunications carriers in more than 50
countries, including the ten largest U.S. wireless carriers and
seven of the ten largest international wireless carriers.
Headquartered in Tampa, Fla., U.S.A., Syniverse has offices in
major cities throughout North America, The Netherlands, China, the
United Kingdom and a global sales force in Brazil, France, India,
Italy, Japan, Luxembourg, Norway, Singapore and Slovakia.
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; and
changes in our tax status. 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 Nine Months Ended Nine Months Ended Sept. 30,
2005 Sept. 30, 2006 Sept. 30, 2005 Sept. 30, 2006 Technology
Interoperability Services $ 30,662� $ 42,996� $ 81,062� $ 99,631�
Network Services 35,227� 31,911� 100,874� 94,953� Number
Portability Services 13,300� 7,682� 37,576� 21,632� Call Processing
Services 7,158� 7,596� 20,883� 22,075� Enterprise Solution 2,517�
1,792� 8,526� 6,005� Revenues excluding Off Network Database
Queries 88,864� 91,977� 248,921� 244,296� Off Network Database
Queries 3,015� 1,590� 9,252� 6,882� Total Revenues 91,879� 93,567�
258,173� 251,178� � Cost of operations 31,603� 35,196� 98,475�
99,947� � Gross Margin 60,276� 58,371� 159,698� 151,231� � Gross
Margin % 65.6% 62.4% 61.9% 60.2% Gross Margin % before Off Network
Database Queries 67.8% 63.5% 64.2% 61.9% � Sales and marketing
6,227� 6,297� 17,701� 18,661� General and administrative 13,649�
13,566� 36,183� 44,550� Depreciation and amortization 11,246�
10,685� 35,321� 30,534� Restructuring 143� 668� 143� 1,006� �
Operating income 29,011� 27,155� 70,350� 56,480� � Other expense,
net Interest expense, net (7,905) (6,691) (26,262) (19,061) Loss on
extinguishment of debt (19,016) -� (42,804) (924) Other, net (6)
57� (6) 387� (26,927) (6,634) (69,072) (19,598) � Income before
provision for income taxes 2,084� 20,521� 1,278� 36,882� �
Provision for income taxes 2,379� 2,939� 6,747� 6,263� � Net income
(loss) (295) 17,582� (5,469) 30,619� � Preferred stock dividends -�
-� (4,195) -� � Net income (loss) attributable to common
stockholders $ (295) $ 17,582� $ (9,664) $ 30,619� � Net income
(loss) per share Basic $ (0.00) $ 0.26� $ (0.16) $ 0.46� Diluted $
(0.00) $ 0.26� $ (0.16) $ 0.45� IPO pro forma(1) $ (0.00) $ 0.26� $
(0.08) $ 0.45� � Shares used in calculation Basic 66,289� 67,006�
60,442� 66,888� Diluted 66,289� 67,930� 60,442� 67,689� IPO pro
forma(2) 67,667� 67,667� 67,667� 67,667� � Notes: 1) Assumes no
preferred stock dividends since all of the outstanding preferred
stock was either redeemed or converted to common shares after our
IPO. 2) Assumes shares outstanding after our IPO were outstanding
for the full period above. Selected Balance Sheet Data (unaudited):
As of (in thousands) Sept. 30, 2006 Cash $ 17,316� � Senior
subordinated notes $ 175,000� Term note B 161,974� Total debt $
336,974� � � Common stock and additional paid-in capital $ 458,329�
Accumulated deficit and other comprehensive income (104,002) Total
stockholders' equity $ 354,327� Syniverse Holdings, Inc
Reconciliation of Non GAAP Measures to GAAP (unaudited) (In
thousands except per share information) � Three Months Ended Three
Months Ended Nine Months Ended Nine Months Ended Sept. 30, 2005
Sept. 30, 2006 Sept. 30, 2005 Sept. 30, 2006 � Reconciliation to
adjusted EBITDA Net income (loss) $ (295) $ 17,582� $ (5,469) $
30,619� Interest expense, net 7,905� 6,691� 26,262� 19,061�
Provision for income taxes 2,379� 2,939� 6,747� 6,263� Depreciation
and amortization 11,246� 10,685� 35,321� 30,534� Restructuring 143�
668� 143� 1,006� Loss from disposal of assets -� -� 612� -� SFAS
123R non-cash compensation -� 704� 1,033� IOS North America
transition expenses 567� -� 3,073� 794� Facilities move expense
110� (165) 605� 5,273� Loss on extinguishment of debt 19,016� -�
42,804� 924� Litigation settlement -� 1,368� -� 1,368�
Non-operating gains -� -� -� (330) Adjusted EBITDA $ 41,071� $
40,472� $ 110,098� $ 96,545� � � Three Months Ended Three Months
Ended Nine Months Ended Nine Months Ended Sept. 30, 2005 Sept. 30,
2006 Sept. 30, 2005 Sept. 30, 2006 Reconciliation to adjusted net
income (loss) and cash net income Net income (loss) $ (295) $
17,582� $ (5,469) $ 30,619� Add provision for income taxes 2,379�
2,939� 6,747� 6,263� Income before provision for income taxes
2,084� 20,521� 1,278� 36,882� � Restructuring 143� 668� 143� 1,006�
Loss from disposal of assets -� -� 612� -� SFAS 123R non-cash
compensation -� 704� -� 1,033� Purchase accounting amortization
5,742� 4,717� 18,585� 13,131� IOS North America transition expenses
567� -� 3,073� 794� Facilities move expense 194� (165) 1,016�
5,273� Loss on extinguishment of debt 19,016� -� 42,804� 924�
Litigation settlement -� 1,368� -� 1,368� Non-operating gains -� -�
-� (330) Adjusted income before provision for income taxes 27,746�
27,813� 67,511� 60,081� � Less assumed provision for income taxes
at 39% (10,821) (10,847) (26,329) (23,432) � Adjusted net income
16,925� 16,966� 41,182� 36,649� � Add cash savings of tax
deductible goodwill(1) 2,300� 2,300� 6,900� 6,900� � Cash net
income $ 19,225� $ 19,266� $ 48,082� $ 43,549� � Adjusted net
income per share after IPO $ 0.25� $ 0.25� $ 0.61� $ 0.54� Cash net
income per share after IPO $ 0.28� $ 0.28� $ 0.71� $ 0.64� Shares
outstanding after IPO(2) 67,667� 67,667� 67,667� 67,667� � � 1)
Represents the cash benefit realized currently as a result of the
tax deductibility of goodwill amortization. 2) Assumes shares
outstanding after our IPO were outstanding for all periods above.
Syniverse Holdings, Inc. (NYSE:SVR), a leading provider of
mission-critical technology services to wireless telecommunications
companies worldwide, today reported results for the third quarter
2006. -- Total revenues were $93.6 million for the third quarter
2006, a 1.8% increase compared to the third quarter 2005. -- Net
revenue, which excludes off-network database queries or
pass-through revenue, was $92.0 million for the third quarter 2006,
a 3.5% increase compared to the third quarter 2005. -- Net income
attributable to common stockholders was $17.6 million in the third
quarter 2006, compared to a loss of $0.3 million in the third
quarter 2005. -- Cash net income, a non-GAAP measure of
profitability, was $19.3 million for the third quarter 2006, nearly
flat compared to the third quarter 2005. 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 share was $0.28 in the third quarter 2006, on
par with the $0.28 reported in the third quarter 2005. -- Adjusted
EBITDA, a non-GAAP measure of operating cash flow, was $40.5
million for the third quarter 2006, compared to $41.1 million in
the third quarter 2005. "We continued to make progress on our
strategic plan in the third quarter," said Syniverse President and
CEO Tony Holcombe. "We reinforced our leading global position in
number portability by winning a contract with the Canadian carriers
and began integrating Hong Kong-based ITHL, which was acquired in
June. We continued to migrate Vodafone properties to our platform
during the quarter. However, several properties have requested
additional customization, delaying the migrations of these
properties until the first quarter 2007." Chief Financial Officer
Ray Lawless added, "During the third quarter, we exceeded our net
revenue and cash net income guidance, and recorded adjusted EBITDA
in the upper half of our guidance. Results this quarter benefited
from the inclusion of ITHL for the first time and seasonal effects
that we typically see in the third quarter." "Syniverse continued
to generate significant cash from operations while investing in our
business to enhance future profitability," said Lawless. "We
generated $27.3 million during the third quarter, and expect to
exceed that in the fourth quarter." Third Quarter 2006 Service Line
Revenue Technology Interoperability Services Technology
Interoperability revenues were $43.0 million in the third quarter
2006, a 40.2% increase compared to third quarter 2005, primarily
driven by the inclusion of ITHL, increases in clearing, Message
Manager, UniRoam, and Mobile Data Roaming. Network Services Network
Services revenues were $31.9 million in the third quarter 2006, a
9.4% decrease compared to third quarter 2005, primarily driven by
previously disclosed migrations and competitive pricing, partially
offset by increases in data networking. Number Portability Services
Number Portability revenues were $7.7 million in the third quarter
2006, a 42.2% decrease compared to the third quarter 2005,
primarily driven by the previously disclosed migration of the
Sprint port center. Call Processing Services Call Processing
Services revenues were $7.6 million in the third quarter 2006, a
6.1% increase compared to the third quarter 2005, with increases in
international roaming supported by Signaling Solutions offset by a
decline in fraud services. Enterprise Solutions Enterprise
Solutions revenues were $1.8 million in the third quarter 2006.
Off-Network Database Queries (Pass-Through) Pass-through revenues
for the third quarter 2006 were $1.6 million. Third Quarter 2006
Business Highlights -- Awarded a contract to provide Wireless
Number Portability to a group of 10 Canadian carriers. -- Won a
consolidated service contract with Centennial Wireless, adding
Network and Number Portability Services to the existing service
relationship. -- Continued international progress with new global
customer wins across multiple products, including clearing &
settlement and mobile data roaming. -- Completed successful
migrations of four operating companies from Vodafone to Syniverse
platforms. Outlook The company provides the following estimates for
2006: -0- *T Full Year 2006 Net Revenues $328 million - $330
million Adjusted EBITDA $131 million - $133 million Cash Net Income
$59 million - $60 million *T 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 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 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. We present Adjusted EBITDA because we believe
that Adjusted EBITDA provides useful information regarding our
continuing operating results. We rely on Adjusted EBITDA as a
primary measure 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 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 as an
assessment of our overall liquidity and our ability to meet our
debt service obligations. We believe that Adjusted EBITDA, 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, 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 should not be considered a measure 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, Adjusted Net Income and Cash Net Income as
supplemental information. Third Quarter 2006 Earnings Call
Syniverse Technologies will host a conference call at 4:30 p.m.
(ET) to discuss these results. To participate on the call, U.S.
callers may dial toll-free 1-866-713-8565; international callers
may dial direct (+1) 617-597-5324. The passcode for the call is
21800507. The event will be webcast live over the Internet in
listen-only mode at http://www.syniverse.com/investorevents. A
replay of the call will be available beginning Nov. 7, 2006, at
6:30 p.m. EST through Nov. 21, 2006, at 11:59 p.m. EST. 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 60891097. 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) is a leading
provider of mission-critical technology services to wireless
telecommunications companies worldwide. Syniverse solutions
simplify technology complexities by integrating disparate carriers'
systems and networks in order to provide seamless global voice and
data communications to wireless subscribers. Carriers depend on
Syniverse's integrated suite of services to solve their most
complex technology challenges and to facilitate the rapid
deployment of next generation wireless services. Syniverse provides
services to over 350 telecommunications carriers in more than 50
countries, including the ten largest U.S. wireless carriers and
seven of the ten largest international wireless carriers.
Headquartered in Tampa, Fla., U.S.A., Syniverse has offices in
major cities throughout North America, The Netherlands, China, the
United Kingdom and a global sales force in Brazil, France, India,
Italy, Japan, Luxembourg, Norway, Singapore and Slovakia.
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; and
changes in our tax status. These and other risks and uncertainties
associated with our business are described in our filings with the
Securities and Exchange Commission. -0- *T Syniverse Holdings, Inc.
Condensed Consolidated Statements of Operations (unaudited) (In
thousands except per share information) Three Months Three Months
Nine Months Nine Months Ended Ended Ended Ended Sept. 30, Sept. 30,
Sept. 30, Sept. 30, 2005 2006 2005 2006 ------------ ------------
------------ ------------ Technology Interoperability Services
$30,662 $42,996 $81,062 $99,631 Network Services 35,227 31,911
100,874 94,953 Number Portability Services 13,300 7,682 37,576
21,632 Call Processing Services 7,158 7,596 20,883 22,075
Enterprise Solution 2,517 1,792 8,526 6,005 ------------
------------ ------------ ------------ Revenues excluding Off
Network Database Queries 88,864 91,977 248,921 244,296 Off Network
Database Queries 3,015 1,590 9,252 6,882 ------------ ------------
------------ ------------ Total Revenues 91,879 93,567 258,173
251,178 Cost of operations 31,603 35,196 98,475 99,947 ------------
------------ ------------ ------------ Gross Margin 60,276 58,371
159,698 151,231 Gross Margin % 65.6% 62.4% 61.9% 60.2% Gross Margin
% before Off Network Database Queries 67.8% 63.5% 64.2% 61.9% Sales
and marketing 6,227 6,297 17,701 18,661 General and administrative
13,649 13,566 36,183 44,550 Depreciation and amortization 11,246
10,685 35,321 30,534 Restructuring 143 668 143 1,006 ------------
------------ ------------ ------------ Operating income 29,011
27,155 70,350 56,480 Other expense, net Interest expense, net
(7,905) (6,691) (26,262) (19,061) Loss on extinguishment of debt
(19,016) - (42,804) (924) Other, net (6) 57 (6) 387 ------------
------------ ------------ ------------ (26,927) (6,634) (69,072)
(19,598) ------------ ------------ ------------ ------------ Income
before provision for income taxes 2,084 20,521 1,278 36,882
Provision for income taxes 2,379 2,939 6,747 6,263 ------------
------------ ------------ ------------ Net income (loss) (295)
17,582 (5,469) 30,619 Preferred stock dividends - - (4,195) -
------------ ------------ ------------ ------------ Net income
(loss) attributable to common stockholders $(295) $17,582 $(9,664)
$30,619 ============ ============ ============ ============ Net
income (loss) per share Basic $(0.00) $0.26 $(0.16) $0.46 Diluted
$(0.00) $0.26 $(0.16) $0.45 IPO pro forma(1) $(0.00) $0.26 $(0.08)
$0.45 Shares used in calculation Basic 66,289 67,006 60,442 66,888
Diluted 66,289 67,930 60,442 67,689 IPO pro forma(2) 67,667 67,667
67,667 67,667 Notes: 1) Assumes no preferred stock dividends since
all of the outstanding preferred stock was either redeemed or
converted to common shares after our IPO. 2) Assumes shares
outstanding after our IPO were outstanding for the full period
above. *T -0- *T Selected Balance Sheet Data (unaudited): As of (in
thousands) Sept. 30, 2006 -------------- Cash $17,316 Senior
subordinated notes $175,000 Term note B 161,974 --------------
Total debt $336,974 ============== Common stock and additional
paid-in capital $458,329 Accumulated deficit and other
comprehensive income (104,002) -------------- Total stockholders'
equity $354,327 ============== *T -0- *T Syniverse Holdings, Inc
Reconciliation of Non GAAP Measures to GAAP (unaudited) (In
thousands except per share information) Three Months Three Months
Nine Months Nine Months Ended Ended Ended Ended Sept. 30, Sept. 30,
Sept. 30, Sept. 30, 2005 2006 2005 2006 ------------ ------------
------------ ------------ Reconciliation to adjusted EBITDA Net
income (loss) $(295) $17,582 $(5,469) $30,619 Interest expense, net
7,905 6,691 26,262 19,061 Provision for income taxes 2,379 2,939
6,747 6,263 Depreciation and amortization 11,246 10,685 35,321
30,534 Restructuring 143 668 143 1,006 Loss from disposal of assets
- - 612 - SFAS 123R non- cash compensation - 704 1,033 IOS North
America transition expenses 567 - 3,073 794 Facilities move expense
110 (165) 605 5,273 Loss on extinguishment of debt 19,016 - 42,804
924 Litigation settlement - 1,368 - 1,368 Non-operating gains - - -
(330) ------------ ------------ ------------ ------------ Adjusted
EBITDA $41,071 $40,472 $110,098 $96,545 ============ ============
============ ============ Three Months Three Months Nine Months
Nine Months Ended Ended Ended Ended Sept. 30, Sept. 30, Sept. 30,
Sept. 30, 2005 2006 2005 2006 ------------ ------------
------------ ------------ Reconciliation to adjusted net income
(loss) and cash net income Net income (loss) $(295) $17,582
$(5,469) $30,619 Add provision for income taxes 2,379 2,939 6,747
6,263 ------------ ------------ ------------ ------------ Income
before provision for income taxes 2,084 20,521 1,278 36,882
Restructuring 143 668 143 1,006 Loss from disposal of assets - -
612 - SFAS 123R non- cash compensation - 704 - 1,033 Purchase
accounting amortization 5,742 4,717 18,585 13,131 IOS North America
transition expenses 567 - 3,073 794 Facilities move expense 194
(165) 1,016 5,273 Loss on extinguishment of debt 19,016 - 42,804
924 Litigation settlement - 1,368 - 1,368 Non-operating gains - - -
(330) ------------ ------------ ------------ ------------ Adjusted
income before provision for income taxes 27,746 27,813 67,511
60,081 Less assumed provision for income taxes at 39% (10,821)
(10,847) (26,329) (23,432) ------------ ------------ ------------
------------ Adjusted net income 16,925 16,966 41,182 36,649 Add
cash savings of tax deductible goodwill(1) 2,300 2,300 6,900 6,900
------------ ------------ ------------ ------------ Cash net income
$19,225 $19,266 $48,082 $43,549 ============ ============
============ ============ Adjusted net income per share after IPO
$0.25 $0.25 $0.61 $0.54 Cash net income per share after IPO $0.28
$0.28 $0.71 $0.64 Shares outstanding after IPO(2) 67,667 67,667
67,667 67,667 1) Represents the cash benefit realized currently as
a result of the tax deductibility of goodwill amortization. 2)
Assumes shares outstanding after our IPO were outstanding for all
periods above. *T
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