Syniverse Reports Second Quarter 2007 Results.TAMPA, Fla. -- Syniverse Technologies (NYSE NYSE See: New York Stock Exchange :SVR Noun 1. SVR - Russia's intelligence service responsible for foreign operations, intelligence-gathering and analysis, and the exchange of intelligence information; collaborates with other countries to oppose proliferation of weapons of mass destruction, terrorism and ), a leading provider of technology and business solutions for the global mobile telecommunications industry, today reported results for the second quarter 2007. * Total revenues were $91.4 million for the second quarter 2007, an 11.2% increase compared to the second quarter 2006. * Net revenues, which exclude off-network database queries or pass-through revenue, were $89.8 million for the second quarter 2007, a 13.7% increase compared to the second quarter 2006. * Net income was $11.7 million in the second quarter 2007, a 23.0% increase compared to $9.5 million in the second quarter 2006. * Cash net income, a non-GAAP measure of profitability, was $17.9 million for the second quarter 2007, a 38.7% increase compared to the second quarter 2006. 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 diluted share was $0.26 in the second quarter 2007, a 36.8% increase compared to the second quarter 2006. * Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become , a non-GAAP measure of operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. , was $37.1 million for the second quarter 2007, a 26.7% increase compared to $29.3 million in the second quarter 2006. "Syniverse continued to execute its strategic plan in the second quarter, with strong growth in data services and global expansion driving financial outperformance. Key data services such as SMS-IG for SMS (1) (Storage Management System) Software used to routinely back up and archive files. See HSM. (2) (Systems Management Server) Systems management software from Microsoft that runs on Windows NT Server. interoperability and mobile data roaming saw accelerating growth, while new contracts in Singapore, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. and Georgia expanded our global reach," said Tony Holcombe, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and President of Syniverse. "Given the robust results through six months, combined with strong organic trends that we anticipate for the remainder of 2007, we are increasing our full year outlook." Chief Financial Officer David Hitchcock added: "Syniverse delivered strong financial results in the second quarter, with organic revenue growth of 6.3% year over year. This growth, combined with continued cost management, led to a significant expansion in our margins. Syniverse continues to generate significant free cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , and we've increased our free cash flow expectations for the full year." Second Quarter 2007 Service Line Revenue Technology Interoperability Services Technology Interoperability Services revenues were $42.1 million in the second quarter 2007, a 36.6% increase compared to the second quarter 2006, primarily driven by increases in data services such as SMS interoperability and mobile data roaming as well as acquired revenues from ITHL ITHL Institute for the Translation of Hebrew Literature . Organic revenue growth was 17.6% while the services acquired from ITHL in June 2006 contributed $5.8 million. Network Services Network Services revenues were $31.2 million in the second quarter 2007, a 1.0% decrease compared to the second quarter 2006, as wireline migrations were mostly offset by organic increases in data networking and SS7 connectivity. Number Portability See NP. Services Number Portability Services revenues were $6.9 million in the second quarter 2007, a 3.9% decrease compared to the second quarter 2006, as the price impact of certain renewals was partially offset by increased revenues from new services provided to Canadian mobile operators. Call Processing In telecommunication, the term call processing has the following meanings:
Call Processing Services revenues were $8.4 million in the second quarter 2007, a 15.6% increase compared to the second quarter 2006, driven higher by Signaling Solutions revenue from increased domestic and international roaming. Enterprise Solutions Enterprise Solutions revenues were $1.1 million in the second quarter 2007. Off-Network Database Queries (Pass-Through) Pass-through revenues for the second quarter 2007 were $1.6 million. Second Quarter 2007 Business Highlights * Agreement to acquire the wireless clearing and financial settlement business of Billing Services Group. This transaction remains subject to European Commission European Commission, branch of the governing body of the European Union (EU) invested with executive and some legislative powers. Located in Brussels, Belgium, it was founded in 1967 when the three treaty organizations comprising what was then the European Community approval, and Syniverse has filed for a 20-day extension to the Commission's Phase 2 review. * Named David Hitchcock as Chief Financial Officer. * Appointed as Singapore's only number portability centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. database administrator. * New GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. clearing contracts with SmartTone Vodafone of Hong Kong and Mobitel of Georgia. Outlook Based on strong results from the first six months and an improved outlook for the remainder of the year, the company is increasing its outlook as follows: Net Revenues $345 - $350 million Adjusted EBITDA $133 - $138 million Cash Net Income $60 - $65 million Additionally, the company expects to generate operating free cash flow in excess of $75 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 (1) (Internetwork Operating System) An operating system from Cisco that is the primary control program used in its routers. IOS is widely used and robust system software that supports the common functions of all products under Cisco's CiscoFusion architecture. North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . While not amortized for GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). purposes, goodwill amortization is deductible in calculating our taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. 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 The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt, headquarters facilities move expenses, transition expenses of integrating the IOS North America business, loss from disposal of assets, SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R non-cash compensation, data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a contract termination Defense procurement: the cessation or cancellation, in whole or in part, of work under a prime contract or a subcontract thereunder for the convenience of, or at the option of, the government, or due to failure of the contractor to perform in accordance with the terms of the contract (default). fee, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement 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 restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , loss on extinguishment of debt, headquarters facilities move expenses, the transition expenses of integrating the IOS North America business, loss from disposal of assets, SFAS 123R non-cash compensation, data processing contract termination fee, litigation settlement 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. Syniverse's Free Cash Flow is determined by adding (or subtracting) the following to Net cash provided by operating activities: (capital expenditures), cash paid (received) in legal settlement and (accrued but not yet paid acquisition earn-out). We present Adjusted EBITDA and Free Cash Flow because we believe that Adjusted EBITDA and Free Cash Flow provide useful information regarding our continuing operating results. We rely on Adjusted EBITDA and 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 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 also utilize Adjusted EBITDA and Free Cash Flow as an assessment of our overall liquidity and our ability to meet our debt service obligations. We believe that Adjusted EBITDA, Free Cash Flow, 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, Free Cash Flow, 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Because of these limitations, Adjusted EBITDA and Free Cash Flow should not be considered as measures 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, Free Cash Flow, Adjusted Net Income and Cash Net Income as supplemental information. Second quarter 2007 Earnings Call Syniverse Technologies will host a conference call today at 4:30 p.m. ET to discuss these results. To participate on this call, U.S. callers may dial toll-free 1-866-272-9941; international callers may dial direct (+1) 617-213-8895. The passcode for this call is 77001491. This event will be webcast live over the Internet in listen-only mode at www.syniverse.com/investorevents. A replay of this call will be available beginning shortly after the call concludes through August 14, 2007, 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 94860182. 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) makes it possible for over 350 communications companies Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. in more than 50 countries to address market changes and demands as they deliver everything from voice calls to sophisticated data and video services. By ensuring that disparate technologies and standards interoperate, Syniverse allows operators to provide seamless, interactive mobile services to their subscribers wherever and whenever they need them. Celebrating its 20th anniversary in 2007, Syniverse is headquartered in Tampa, Florida “Tampa” redirects here. For other uses, see Tampa (disambiguation). Tampa is a United States city in Hillsborough County, on the west coast of Florida. It serves as the county seat for Hillsborough County.GR6. , U.S.A., and has offices in major cities around the globe. Syniverse is ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001:2000 certified and TL 9000 approved, adhering to the principles of customer focus and quality improvement practices. More information is available at www.syniverse.com. Cautions about Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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; changes in our tax status; risks or uncertainties inherent in or related to the integration of the business we proposed to acquire (including unanticipated operating costs operating costs npl → gastos mpl operacionales and business disruptions following the proposed transaction); our ability to secure financing for the proposed acquisition; the timing or impact of any regulatory or governmental approvals; satisfaction of the various closing conditions set forth in the share purchase agreement for the proposed acquisition, and the timing of the closing of the proposed acquisition. These and other risks and uncertainties associated with our business are described in our filings with the Securities and Exchange Commission. [TABLE OMITTED] [TABLE OMITTED] |
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