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Form 8-K/A SYNCHRONOSS TECHNOLOGIES For: Dec 16

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January 5, 2017 6:04 AM EST


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 16, 2016
SYNCHRONOSS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

DELAWARE
 
000-52049
 
06-1594540
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)


200 Crossing Boulevard, 8th Floor
Bridgewater, New Jersey
 

08807
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (866) 620-3940

N/A
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K/A filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
☐
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 
☐
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 
☐
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





EXPLANATORY NOTE
 
This Amendment No. 1 on Form 8-K/A is being filed to amend and restate in its entirety Exhibit 99.1 of the Current Report on Form 8-K filed by Synchronoss Technologies, Inc. on December 22, 2016 (the “Original 8-K”). Exhibit 99.1 of the Original 8-K was amended to include the unaudited proforma statement of income for the period ended September 30, 2015 and unaudited pro forma consolidated supplemental cash flow data; none of the previously disclosed financial information was changed.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On December 16, 2016, Synchronoss Technologies, Inc. ("Synchronoss") completed the previously announced divestiture of a portion of its carrier activation business (“BPO”) to newly formed Sequential Technology International, LLC (“STI”) for a total purchase price of $146 million (the “Sale”). As part of the Sale, Synchronoss will retain a 30% investment in STI, which can be reduced during the course of 2017. The historical financial results of the BPO business will be classified as discontinued operations in Synchronoss' future filings.

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information

Unaudited pro forma financial information of Synchronoss to give effect to the disposition of the BPO is included in Exhibit 99.1 filed herewith and incorporated by reference into this Item 9.01.

(d)  Exhibits
Exhibit No.
 
Description
99.1
 
Unaudited pro forma condensed consolidated financial statements
 
 
 





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
 
 
 
 
SYNCHRONOSS TECHNOLOGIES, INC.
 
 
 
 
 
 
 
 
By:
/s/ Stephen G. Waldis
 
 
 
 
Stephen G. Waldis
 
 
 
 
Chairman of the Board of Directors
And Chief Executive Officer
 






Date: January 5, 2017



Exhibit 99.1
SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



On December 16, 2016, Synchronoss Technologies, Inc. (“Synchronoss,” “our,” and “the Company” refer to Synchronoss Technologies, Inc. and all of its subsidiaries) completed a divestiture of a portion of its carrier activation business (“BPO”) to newly formed Sequential Technology International, LLC (“STI”) for a total purchase price of $146 million (the “Sale”). As part of the sales arrangement, Synchronoss will retain a 30% investment in STI, which can be reduced during the course of 2017. The historical financial results of the BPO business will be classified as discontinued operations in the Company's future filings.

The following unaudited pro forma condensed consolidated balance sheet, as of September 30, 2016, reflects Synchronoss’ financial position as if the Sale had occurred on that date. The following unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2016 and 2015 and fiscal years ended December 31, 2015, 2014, and 2013 reflect Synchronoss’ results of operations as if the Sale had occurred on January 1, 2013.

These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read in conjunction with:

I.
The audited consolidated financial statements and the accompanying notes and Management’s Discussion and Analysis of the Financial Condition and Results of Operations included in Synchronoss' Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and

II.
The unaudited consolidated condensed financial statements and accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Synchronoss’ Form 10-Q for the nine months ended September 30, 2016.
 
The unaudited pro forma condensed consolidated financial statements are provided for illustrative and informational purposes only and are not intended to represent or be indicative of what Synchronoss’ results of operations or financial position would have been had the sale occurred on the dates indicated. The unaudited pro forma condensed consolidated financial statements also should not be considered representative of Synchronoss’ future results of operations or financial position.

In accordance with Article 11 of SEC Regulation S-X, the unaudited pro forma condensed consolidated financial statements reflect adjustments to the extent they are directly attributable to the Sale, factually supportable and, for statement of operations purposes, are expected to have a continuing impact on the Company’s results of operations.

The “Historical” column in the unaudited pro forma condensed consolidated financial statements reflects Synchronoss’ historical financial statements for the periods presented and does not reflect any adjustments related to the Sale and related events.

The “BPO Business” column in the unaudited pro forma condensed consolidated financial statements represents the financial position and results of BPO Business on a carve-out basis, including all net assets and corporate allocations necessary to operate the business.

The “Other Pro Forma Adjustments” column represents certain assets, liabilities and previously allocated corporate overhead costs of BPO Business that will be retained by the Company as well as certain adjustments related to the sale. The adjustments represent the Company's current best estimates and may differ from those that will be calculated to report discontinued operations in the Company's future filings.

The “Net Divested Business” column utilized in the unaudited pro forma consolidated supplemental cash flow data represents the net impact of the other pro forma adjustments and the BPO business.





1

SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)



 
September 30, 2016
 
 Historical
 
BPO
Business
 
Other Pro Forma Adjustments
 
Pro Forma
Synchronoss
ASSETS
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
123,319

 
$
—

 
$
17,335

A
$
140,654

Marketable securities
16,973

 
—

 
—

 
16,973

Accounts receivable, net of allowance for doubtful accounts
217,307

 
(51,308
)
 
42,358

B
208,357

Prepaid expenses & other assets 
48,242

 
(406
)
 
406

C
48,242

Total current assets
405,841

 
(51,714
)
 
60,099

 
414,226

 
 
 
 
 
 
 
 
Marketable securities
3,968

 
—

 
—

 
3,968

Property and equipment, net
168,083

 
—

 
—

 
168,083

Note receivable
—

 
—

 
83,000

D
83,000

Goodwill
315,185

 
(36,805
)
 
—

 
278,380

Intangible assets, net
215,666

 
—

 
—

 
215,666

Deferred tax assets
1,904

 
—

 
—

 
1,904

Other assets
14,082

 
—

 
—

 
14,082

Equity method investment
—

 
—

 
45,870

E
45,870

Total assets   
$
1,124,729

 
$
(88,519
)
 
$
188,969

 
$
1,225,179

 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 
 
 
 
 
 
 
Account payable
$
28,724

 
$
(5,354
)
 
$
5,354

C
$
28,724

Accrued expenses 
54,066

 
(6,415
)
 
13,176

C, F
60,827

Deferred revenue
26,106

 
—

 
—


26,106

Contingent consideration obligation
8,229

 
—

 
—

 
8,229

Short term debt
38,000

 
—

 
—

 
38,000

Total current liabilities                           
155,125

 
(11,769
)
 
18,530

 
161,886

 
 
 
 
 
 
 
 
Lease financing obligation - long-term
13,082

 
—

 
—

 
13,082

Convertible debt
225,938

 
—

 
—

 
225,938

Deferred tax liability
26,397

 
—

 
46,724

F
73,121

Other liabilities - long term
20,399

 
—

 
—

 
20,399

Redeemable noncontrolling interest
52,616

 
—

 
—

 
52,616

 
 
 
 
 
 
 


Total stockholders' equity                          
631,172

 
(76,750
)
 
123,715

G
678,137

Total liabilities and stockholders' equity            
$
1,124,729

 
$
(88,519
)
 
$
188,969

 
$
1,225,179





2

SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)





 
Nine months ended September 30, 2016
 
 Historical
 
BPO
Business
 
Other Pro Forma Adjustments
 
Pro Forma
Synchronoss
 
 
 
 
 
 
 
 
Net revenues
$
476,658

 
$
(121,704
)
 
$
—

 
$
354,954

Costs and expenses:
 
 
 
 
 
 
 
Cost of services
217,004

 
(75,680
)
 
2,498

H,L
143,822

Research and development
78,408

 
—

 
—

 
78,408

Selling, general and administrative
89,799

 
(17,704
)
 
15,714

I
87,809

Net change in contingent consideration obligation
7,299

 
—

 
—

 
7,299

Restructuring charges
5,139

 
—

 
—

 
5,139

Depreciation and amortization
74,009

 
(5,866
)
 
5,866

I
74,009

Total costs and expenses
471,658

 
(99,250
)
 
24,078

 
396,486

Income (loss) from operations
5,000

 
(22,454
)
 
(24,078
)
 
(41,532
)
Interest income                 
1,492

 
—

 
—

 
1,492

Interest expense                
(5,006
)
 
—

 
—

 
(5,006
)
Other expense, net             
(186
)
 
—

 
—

 
(186
)
Equity method investment earnings
—

 
—

 
6,736

J
6,736

Income (loss) before income tax expense
1,300

 
(22,454
)
 
(17,342
)
 
(38,496
)
Income tax (expense) benefit   
(14,853
)
 
8,757

 
6,763

K
667

Net loss
(13,553
)
 
(13,697
)
 
(10,579
)
 
(37,829
)
Net loss attributable to noncontrolling interests
(8,836
)
 
—

 
—

 
(8,836
)
Net loss attributable to Synchronoss
$
(4,717
)
 
$
(13,697
)
 
$
(10,579
)
 
$
(28,993
)
 
 
 
 
 
 
 
 
Net loss per share attributable to Synchronoss:
Basic
$
(0.11
)
 
 
 
 
 
$
(0.67
)
Diluted
$
(0.11
)
 
 
 
 
 
$
(0.67
)
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
Basic
43,488

 
 
 
 
 
43,488

Diluted
43,488

 
 
 
 
 
43,488



3

SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)





 
Nine months ended September 30, 2015
 
 Historical
 
BPO
Business
 
Other Pro Forma Adjustments
 
Pro Forma
Synchronoss
 
 
 
 
 
 
 
 
Net revenues
$
421,620

 
$
(114,716
)
 
$
—

 
$
306,904

Costs and expenses:
 
 
 
 
 
 
 
Cost of services
172,013

 
(70,658
)
 
8,310

H,L
109,665

Research and development
68,472

 
—

 
—

 
68,472

Selling, general and administrative
60,603

 
(13,946
)
 
12,215

I
58,872

Net change in contingent consideration obligation
—

 
—

 
—

 
—

Restructuring charges
5,090

 
—

 
—

 
5,090

Depreciation and amortization
51,221

 
(6,080
)
 
6,080

I
51,221

Total costs and expenses
357,399

 
(90,684
)
 
26,605

 
293,320

Income (loss) from operations
64,221

 
(24,032
)
 
(26,605
)
 
13,584

Interest income                 
1,483

 
—

 
—

 
1,483

Interest expense                
(4,208
)
 
—

 
—

 
(4,208
)
Other expense, net             
(601
)
 
—

 
—

 
(601
)
Equity method investment earnings
—

 
—

 
7,210

J
7,210

Income (loss) before income tax expense
60,895

 
(24,032
)
 
(19,395
)
 
17,468

Income tax (expense) benefit   
(25,535
)
 
9,372

 
7,564

K
(8,599
)
Net income (loss)
35,360

 
(14,660
)
 
(11,831
)
 
8,869

Net (loss) attributable to noncontrolling interests
—

 
—

 
—

 
—

Net income (loss) attributable to Synchronoss
$
35,360

 
$
(14,660
)
 
$
(11,831
)
 
$
8,869

Income effect for interest on convertible debt, net of tax
$
1,366

 
$
—

 
$
—

 
1,366

Net income (loss) applicable to shares of common stock for earnings per share
$
36,726

 
$
(14,660
)
 
$
(11,831
)
 
$
10,235

 
 
 
 
 
 
 
 
Net income per share attributable to Synchronoss:
Basic
$
0.84

 
 
 
 
 
$
0.21

Diluted
$
0.77

 
 
 
 
 
$
0.21

 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
Basic
42,077

 
 
 
 
 
42,077

Diluted
47,505

 
 
 
 
 
47,505




4

SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)





 
Year ended December 31, 2015
 
 Historical
 
BPO
Business
 
Other Pro Forma Adjustments
 
Pro Forma
Synchronoss
 
 
 
 
 
 
 
 
Net revenues
$
578,831

 
$
(150,714
)
 
$
—

 
$
428,117

Costs and expenses:
 
 
 
 
 
 
 
Cost of services
239,074

 
(95,020
)
 
11,089

H,L
155,143

Research and development
91,430

 
—

 
—

 
91,430

Selling, general and administrative
90,735

 
(19,310
)
 
16,986

I
88,411

Net change in contingent consideration obligation
760

 
—

 
—

 
760

Restructuring charges
5,090

 
—

 
—

 
5,090

Depreciation and amortization
72,152

 
(8,111
)
 
8,111

I
72,152

Total costs and expenses
499,241

 
(122,441
)
 
36,186

 
412,986

Income (loss) from operations
79,590

 
(28,273
)
 
(36,186
)
 
15,131

Interest income                 
2,047

 
—

 
—

 
2,047

Interest expense                
(5,711
)
 
—

 
—

 
(5,711
)
Other income, net
372

 
—

 
—

 
372

Equity method investment earnings
—

 
—

 
8,482

J
8,482

Income (loss) before income tax expense
76,298

 
(28,273
)
 
(27,704
)
 
20,321

Income tax (expense) benefit   
(29,616
)
 
11,026

 
10,805

K
(7,785
)
Net income (loss)
46,682

 
(17,247
)
 
(16,899
)
 
12,536

Net income attributable to noncontrolling interests
6,052

 
—

 
—

 
6,052

Net income (loss) attributable to Synchronoss
40,630

 
(17,247
)
 
(16,899
)
 
6,484

Income effect for interest on convertible debt, net of tax
1,920

 
—

 
—

 
1,920

Net income (loss) applicable to shares of common stock for earnings per share
$
42,550

 
$
(17,247
)
 
$
(16,899
)
 
$
8,404

 
 
 
 
 
 
 
 
Net income per share attributable to Synchronoss:
Basic
$
0.96

 
 
 
 
 
$
0.15

Diluted
$
0.89

 
 
 
 
 
$
0.15

 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
Basic
42,284

 
 
 
 
 
42,284

Diluted
47,653

 
 
 
 
 
42,284





5

SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)





 
Year ended December 31, 2014
 
 Historical
 
BPO
Business
 
Other Pro Forma Adjustments
 
Pro Forma
Synchronoss
 
 
 
 
 
 
 
 
Net revenues
$
457,314

 
$
(150,013
)
 
$
—

 
$
307,301

Costs and expenses:
 
 
 
 
 
 
 
Cost of services
184,414

 
(89,606
)
 
7,578

H,L
102,386

Research and development
73,620

 
—

 
—

 
73,620

Selling, general and administrative
79,227

 
(21,937
)
 
19,791

I
77,081

Net change in contingent consideration obligation
1,799

 
—

 
—

 
1,799

Depreciation and amortization
55,956

 
(8,938
)
 
8,938

I
55,956

Total costs and expenses
395,016

 
(120,481
)
 
36,307

 
310,842

Income (loss) from operations
62,298

 
(29,532
)
 
(36,307
)
 
(3,541
)
Interest income                 
1,265

 
—

 
—

 
1,265

Interest expense                
(3,430
)
 
—

 
—

 
(3,430
)
Other income, net
441

 
—

 
—

 
441

Equity method investment earnings
—

 
—

 
8,860

J
8,860

Income (loss) before income tax expense
60,574

 
(29,532
)
 
(27,447
)
 
3,595

Income tax (expense) benefit   
(21,679
)
 
11,517

 
10,704

K
542

Net income (loss)
38,895

 
(18,015
)
 
(16,743
)
 
4,137

Net loss attributable to noncontrolling interests
—

 
—

 
—

 
—

Net income (loss) attributable to Synchronoss
38,895

 
(18,015
)
 
(16,743
)
 
4,137

Income effect for interest on convertible debt, net of tax
754

 
—

 
—

 
754

Net income (loss) applicable to shares of common stock for earnings per share
$
39,649

 
$
(18,015
)
 
$
(16,743
)
 
$
4,891

 
 
 
 
 
 
 
 
Net income per share attributable to Synchronoss:
Basic
$
0.96

 
 
 
 
 
$
0.10

Diluted
$
0.92

 
 
 
 
 
$
0.10

 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
Basic
40,418

 
 
 
 
 
40,418

Diluted
43,297

 
 
 
 
 
40,418




6

SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)





 
Year ended December 31, 2013
 
 Historical
 
BPO
Business
 
Other Pro Forma Adjustments
 
Pro Forma
Synchronoss
 
 
 
 
 
 
 
 
Net revenues
$
349,047

 
$
(123,679
)
 
$
—

 
$
225,368

Costs and expenses:
 
 
 
 
 
 
 
Cost of services
146,238

 
(78,272
)
 
10,338

H,L
78,304

Research and development
64,845

 
—

 
—

 
64,845

Selling, general and administrative
62,096

 
(18,042
)
 
16,496

I
60,550

Net change in contingent consideration obligation
(5,324
)
 
—

 
—

 
(5,324
)
Restructuring charges
5,172

 
—

 
—

 
5,172

Depreciation and amortization
41,126

 
(12,558
)
 
12,558

I
41,126

Total costs and expenses
314,153

 
(108,872
)
 
39,392

 
244,673

Income (loss) from operations
34,894

 
(14,807
)
 
(39,392
)
 
(19,305
)
Interest income                 
2,646

 
—

 
—

 
2,646

Interest expense                
(3,178
)
 
—

 
—

 
(3,178
)
Other income, net
217

 
—

 
—

 
217

Equity method investment earnings
—

 
—

 
4,442

J
4,442

Income (loss) before income tax expense
34,579

 
(14,807
)
 
(34,950
)
 
(15,178
)
Income tax (expense) benefit   
(11,228
)
 
5,775

 
13,631

K
8,178

Net income (loss)
$
23,351

 
$
(9,032
)
 
$
(21,319
)
 
$
(7,000
)
Net loss attributable to noncontrolling interests
—

 
—

 
—

 
—

Net (loss) attributable to Synchronoss
$
23,351

 
$
(9,032
)
 
$
(21,319
)
 
$
(7,000
)
 
 
 
 
 
 
 
 
Net income (loss) per share attributable to Synchronoss:
Basic
$
0.60

 
 
 
 
 
$
(0.18
)
Diluted
$
0.58

 
 
 
 
 
$
(0.18
)
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
Basic
38,891

 
 
 
 
 
38,891

Diluted
40,009

 
 
 
 
 
38,891






7

SYNCHRONOSS TECHNOLOGIES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



The unaudited pro forma consolidated condensed balance sheet as of September 30, 2016 and the unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2016 and 2015 and for the year ended December 31, 2015, 2014, and 2013 include the following pro forma adjustments:

A.
Represents Synchronoss' cash distribution of approximately $17.3 million as part of the $100.3M consideration received in connection with the sale of 65.6%. Additionally, the buyer contributed assets for remaining 4.4% ownership in STI. Approximately $30 million has been set aside in escrow to cover certain conditions of the closing of the Sale, which is expected to be released and closed in the first half of 2017.
B.
In connection with the Sale, the billed receivables of the BPO Business were excluded from the transfer to STI. Unbilled receivables in the amount of approximately $9.0 million were transferred as part of the Sale.
C.
The total account balance will be retained by Synchronoss, in connection with the Sale.
D.
Synchronoss received a Sellers Note of approximately $83.0 million as part of the proceeds in connection with the Sale, which can be reduced or paid back in full to Synchronoss during 2017.
E.
Reflects the equity investment of 30% that Synchronoss retained in STI in connection with the Sale, which can be reduced during the course of 2017 through the exercise of a call or put option.
F.
Reflects an estimated payable for income taxes of $6.7 million and a deferred tax liability of $46.8 million as a result of the Sale.
G.
Includes the estimated after tax gain on the Sale of approximately $46.6 million as well as the impact of the balance sheet adjustments reflected in notes A through F.
H.
Reflects the inclusion of cost of services which were historically allocated to the BPO Business and will remain with the Company's continuing operations. Certain of these costs will be recovered prospectively as part of our support services agreements with STI.
I.
Reflects general corporate overhead costs, including depreciation, which were historically allocated to the BPO Business and will remain with the Company's continuing operations
J.
Represents the Company's estimated share of earnings on the retained 30% investment in the BPO Business.
K.
Reflects the pro forma tax adjustments related to the BPO Business, which were estimated using the applicable effective rate.
L.
Amounts include stock based compensation directly attributable to the BPO Business as follows:
 
Nine months ended September 30,
 
Year ended December 31,
 
2016
 
2015
 
2015
 
2014
 
2013
 
(in thousands)
Cost of Services
$
1,598

 
$
1,480

 
$
1,988

 
$
1,624

 
$
1,576





8

SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED SUPPLEMENTAL CASH FLOW DATA
(In thousands)



 
Nine months ended September 30, 2016
 
 Historical
 
Net Divested Business
 
Pro Forma
Synchronoss
 
 
 
 
 
 
Net (loss) income
$
(13,553
)
 
$
(24,276
)
 
$
(37,829
)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization
74,009

 
—

 
74,009

Amortization of debt issuance costs
1,197

 
—

 
1,197

Loss on disposal of assets
(70
)
 
—

 
(70
)
Amortization of bond premium
1,214

 
—

 
1,214

Deferred income taxes
5,537

 
(623
)
 
4,914

Non-cash interest on leased facility
763

 
—

 
763

Stock-based compensation
25,407

 
(1,598
)
 
23,809

Contingent consideration obligation
7,299

 
—

 
7,299

Changes in operating assets and liabilities:
Accounts receivable, net of allowance for doubtful accounts
(72,871
)
 
16,796

 
(56,075
)
Prepaid expenses and other current assets
5,315

 
29

 
5,344

Other assets
4,558

 
—

 
4,558

Accounts payable
(5,679
)
 
1,206

 
(4,473
)
Accrued expenses
4,070

 
(3,050
)
 
1,020

Other liabilities
(6,596
)
 
—

 
(6,596
)
Deferred revenues
25,884

 
—

 
25,884

Net cash provided by operating activities
$
56,484

 
$
(11,516
)
 
$
44,968


9

SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED SUPPLEMENTAL CASH FLOW DATA
(In thousands)



 
Nine months ended September 30, 2015
 
 Historical
 
Net Divested Business
 
Pro Forma
Synchronoss
 
 
 
 
 
 
Net income (loss)
$
35,360

 
$
(26,491
)
 
$
8,869

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
51,221

 
—

 
51,221

Amortization of debt issuance costs
1,125

 
—

 
1,125

Loss on disposal of assets
—

 
—

 
—

Amortization of bond premium
1,261

 
—

 
1,261

Deferred income taxes
(11,772
)
 
(577
)
 
(12,349
)
Non-cash interest on leased facility
694

 
—

 
694

Stock-based compensation
21,234

 
(1,480
)
 
19,754

Contingent consideration obligation
(1,532
)
 
 
 
(1,532
)
Changes in operating assets and liabilities:
Accounts receivable, net of allowance for doubtful accounts
(40,442
)
 
8,312

 
(32,130
)
Prepaid expenses and other current assets
8,020

 
215

 
8,235

Other assets
(670
)
 
—

 
(670
)
Accounts payable
106

 
(644
)
 
(538
)
Accrued expenses
10,497

 
(1,047
)
 
9,450

Other liabilities
(138
)
 
—

 
(138
)
Deferred revenues
1,610

 
—

 
1,610

Net cash provided (used) by operating activities
$
76,574

 
$
(21,712
)
 
$
54,862



10

SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED SUPPLEMENTAL CASH FLOW DATA
(In thousands)



 
Year ended December 31, 2015
 
 Historical1
 
Net Divested Business
 
Pro Forma
Synchronoss
 
 
 
 
 
 
Net income (loss)
$
46,682

 
$
(34,146
)
 
$
12,536

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
72,152

 
—

 
72,152

Amortization of debt issuance costs
1,501

 
—

 
1,501

Loss on disposal of assets
16

 
—

 
16

Amortization of bond premium
1,705

 
—

 
1,705

Deferred income taxes
8,319

 
(775
)
 
7,544

Non-cash interest on leased facility
924

 
—

 
924

Stock-based compensation
31,711

 
(1,988
)
 
29,723

Contingent consideration obligation
(772
)
 
—

 
(772
)
Changes in operating assets and liabilities:
Accounts receivable, net of allowance for doubtful accounts
(27,577
)
 
(1,532
)
 
(29,109
)
Prepaid expenses and other current assets
(8,543
)
 
131

 
(8,412
)
Other assets
(4,282
)
 
—

 
(4,282
)
Accounts payable
6,185

 
(2,528
)
 
3,657

Accrued expenses
16,333

 
367

 
16,700

Other liabilities
(402
)
 
—

 
(402
)
Deferred revenues
(4,130
)
 
—

 
(4,130
)
Net cash provided (used) by operating activities
$
139,822

 
$
(40,471
)
 
$
99,351


1 Certain historical amounts have been adjusted to conform with the adoption of ASU 2016-09.


11

SYNCHRONOSS TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED SUPPLEMENTAL CASH FLOW DATA
(In thousands)



 
Year ended December 31, 2014
 
 Historical1
 
Net Divested Business
 
Pro Forma
Synchronoss
 
 
 
 
 
 
Net income (loss)
$
38,895

 
$
(34,758
)
 
$
4,137

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
55,956

 
—

 
55,956

Amortization of debt issuance costs
618

 
—

 
618

Loss on disposal of assets
33

 
—

 
33

Amortization of bond premium
384

 
—

 
384

Deferred income taxes
3,207

 
(475
)
 
2,732

Non-cash interest on leased facility
946

 
—

 
946

Stock-based compensation
28,987

 
(1,624
)
 
27,363

Contingent consideration obligation
3,532

 
—

 
3,532

Changes in operating assets and liabilities:
Accounts receivable, net of allowance for doubtful accounts
(50,924
)
 
4,662

 
(46,262
)
Prepaid expenses and other current assets
(14,660
)
 
(28
)
 
(14,688
)
Other assets
(1,930
)
 
—

 
(1,930
)
Accounts payable
4,169

 
(1,235
)
 
2,934

Accrued expenses
(13,876
)
 
(440
)
 
(14,316
)
Other liabilities
5,825

 
—

 
5,825

Deferred revenues
(4,119
)
 
—

 
(4,119
)
Net cash provided (used) by operating activities
$
57,043

 
$
(33,898
)
 
$
23,145


1 Certain historical amounts have been adjusted to conform with the adoption of ASU 2016-09.


12

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