Syniverse Reports Second Quarter 2008 Results.TAMPA, Fla. -- Syniverse Holdings, Inc. (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 telecommunications industry, today reported results for the second quarter 2008. * Total revenues were $127.6 million for second quarter 2008, a 39.7% increase compared to second quarter 2007. * Net revenues, which exclude off-network database queries or pass-through revenue, were $126.2 million for second quarter 2008, a 40.6% increase compared to second quarter 2007. * Net income was $20.4 million in second quarter 2008, a 74.4% increase compared to second quarter 2007. * Net income per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share was $0.30 in second quarter 2008, a 72.7% increase compared to second quarter 2007. * Cash net income, a non-GAAP financial measure, was $28.4 million for second quarter 2008, a 58.9% increase compared to second quarter 2007. 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 That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). goodwill amortization to adjusted net income. * Cash net income per diluted share was $0.42 in second quarter 2008, a 57.3% increase compared to second quarter 2007. * 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 financial measure, was $58.3 million for second quarter 2008, a 57.3% increase compared to second quarter 2007. "Syniverse continues to report record results driven by double-digit organic growth and successful acquisition integration," said Tony Holcombe, President and 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. , Syniverse. "We are capitalizing on the growth in messaging and wireless data while increasing our market share, and now provide services to more than 600 operators worldwide. Syniverse also is successfully executing our plan to integrate BSG BSG Battlestar Galactica BSG Broadband Stakeholder Group (UK) BSG British Society of Gastroenterology (London, UK) BSG Business Systems Group BSG Business Solutions Group BSG Basigin Wireless, and we continue to anticipate $12 million of annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. cost synergies Cost Synergy In the context of mergers, cost synergy is the savings in operating costs expected after two companies, who compliment each other's strengths, join. Notes: The savings in operating costs usually come in the form of laying off employees. as we integrate the two businesses." Chief Financial Officer David Hitchcock added, "Organic net revenue growth exceeded 25% during the second quarter as technology interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. services continue to accelerate. Costs were again well contained as we realize the benefits of our increasing scale, leading to $40.9 million of cash from operating activities. In addition, inclusive of inclusive of prep. Taking into consideration or account; including. $13.0 million of capital expenditures, we generated $33.3 million of operating free cash flow in the quarter." Please refer to the information set forth below under the captions "Non-GAAP Measures" and "Reconciliation of Non-GAAP Measures to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). " for an explanation of the foregoing non-GAAP financial measures as well as a reconciliation of such non-GAAP financial measures to GAAP financial measures. Second Quarter 2008 Service Line Revenue Technology Interoperability Services Technology interoperability services revenues were $80.2 million in second quarter 2008, a 90.7% increase compared to second quarter 2007. The increase included $13.7 million of revenues attributable to BSG Wireless, which was included in Syniverse's income statement beginning on January 1. Excluding revenues from BSG Wireless, technology interoperability revenue grew 58.1% during the second quarter of 2008 driven by increases across the product line. Data services, such as 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 The ability to use a communications device such as a cellphone or PDA and be able to move from one cell or access point to another without losing the connection. , continue their explosive growth, while growth in clearing house services, UniRoam([R]) and technology products from ITHL ITHL Institute for the Translation of Hebrew Literature all showed strong double-digit increases. Network Services Network services revenues were $31.6 million in second quarter 2008, 1.3% increase compared to second quarter 2007. Increases in SS7, data networking and Visibility([R]) were largely offset by continued declines elsewhere. Number Portability See NP. Services Number portability services revenues were $6.4 million in second quarter 2008, a 7.2% decrease compared to second quarter 2007. Results were primarily due to lower volumes in 2008. Call Processing In telecommunication, the term call processing has the following meanings:
Call processing services revenues were $7.3 million in second quarter 2008, a 13.2% decrease compared to second quarter 2007. This decrease was attributable to continued declines in legacy fraud-related services and a decline in signaling solutions. Enterprise Solutions Enterprise solutions revenues were $0.6 million in second quarter 2008. Off-Network Database Queries (Pass-Through) Pass-through revenues for second quarter 2008 were $1.4 million. Second Quarter 2008 Business Highlights * Continued the integration of BSG Wireless. * Gained additional market traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. with recent product introductions, including DataNet, 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. Visibility and financial clearing house services. * Completed implementation for June launch of true number portability in Singapore. Outlook The company is revising its guidance and providing the following outlook for 2008: Net Revenues $485 - 495 million Net Income $69 - 74 million Adjusted EBITDA $223 - $230 million Cash Net Income $105 - $110 million Additionally, the company expects to generate operating free cash flow in excess of $118 million for 2008. Syniverse expects to realize approximately $12 million of annualized run-rate cost savings in connection with its integration of BSG Wireless. Approximately one-third of this total is expected to be realized by year end 2008, with the remainder to be realized in 2009. Expected Adjusted EBITDA and Cash Net Income have been adjusted to exclude the one-time costs related to integrating the businesses and the duplicative costs that are expected to be eliminated by the end of 2009. Non-GAAP Measures Syniverse's Cash Net Income is determined by first calculating Adjusted Net Income. Adjusted Net Income is calculated by adding the following items to net income: provision for income taxes, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , 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, purchase accounting amortization and BSG Wireless transition expenses to arrive at Adjusted Net Income 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. To calculate Cash Net Income, the cash benefit of our tax-deductible goodwill is added to Adjusted Net Income. This cash benefit is a result of the differing treatments of approximately $362 million of goodwill on our balance sheet that primarily is the result of acquisitions that we made from Verizon and 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. . Specifically, while this goodwill is not amortized for GAAP purposes, the amortization of goodwill is nonetheless 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 actual cash tax liabilities. Syniverse's Adjusted EBITDA is determined by adding to net income the following items: interest expense, net, provision for income taxes, depreciation and amortization, restructuring, SFAS 123R non-cash compensation and BSG Wireless transition expenses. Syniverse's Operating Free Cash Flow is determined by adding to (or subtracting from) Net cash provided by operating activities the following items: (capital expenditures), cash paid (received) in legal settlement and accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. but not yet paid acquisition-related earn-out and other contingent payments. A reconciliation of Adjusted Net Income, Cash Net Income and Adjusted EBITDA to net income, the closest GAAP measure, is presented in the financial tables below under the caption "Reconciliation of Non-GAAP Measures to GAAP." A reconciliation of Operating Free Cash Flow to Net Cash Provided by Operating Activities, the closest GAAP measure, is presented in the financial tables below under the caption "Reconciliation of Non-GAAP Measures to GAAP." 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 certain 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. We rely on Adjusted Net Income and Cash Net Income as primary measures of Syniverse's earnings exclusive of these certain and other non-cash cash charges. We present Adjusted EBITDA and Operating Free Cash Flow because we believe that Adjusted EBITDA and Operating Free Cash Flow provide useful information regarding our continuing operating results. We rely on Adjusted EBITDA and Operating 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 Operating 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 utilize Adjusted EBITDA and Operating Free Cash Flow as an assessment of our overall liquidity and our ability to meet our debt service obligations. We believe that the disclosure of Adjusted EBITDA, Operating Free Cash Flow, Adjusted Net Income and Cash Net Income is useful to investors as these non-GAAP measures form the basis of how our management team reviews and considers our operating results. By disclosing these non-GAAP measures, we believe that we create for an investor a greater understanding of, and an enhanced level of transparency into, the means by which our management team operates our company. 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 that do not directly affect our ongoing operating performance or cash flows. Adjusted EBITDA, Operating Free Cash Flow, Adjusted Net Income and Cash Net Income have limitations as analytical tools, and you should not rely upon them or consider them in isolation or as a substitute for GAAP measures such as net income, cash flows from operating activities and other consolidated income or other cash flows statement data prepared in accordance with GAAP. In addition, these non-GAAP measures may not be comparable to other similarly titled measures of other companies. Because of these limitations, Adjusted EBITDA and Operating 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, or in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. , net income. We attempt to compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA, Operating Free Cash Flow, Adjusted Net Income and Cash Net Income as supplemental information only. Second Quarter 2008 Earnings Call Syniverse will host a conference call today at 4:30 p.m. ET to discuss these results, and the accompanying slides for the conference call have been posted to the Syniverse website at www.syniverse.com. To participate on this call, U.S. callers may dial toll-free free 1-888-873-4896; international callers may dial direct (+1) 617-213-8850. The passcode for this call is 66117475. This event also 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 at approximately 6:30 p.m. ET on August 4 and will remain available through August 18 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 63723020. About Syniverse Syniverse Technologies (NYSE:SVR) provides solutions that allow more than 600 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 over 120 countries to provide seamless mobile services by making it possible for disparate technologies and standards to interoperate See interoperable. . Syniverse's flexibility and customer focus permit its customers to quickly react to market changes and demands, enabling the delivery of everything from voice calls to sophisticated data and video services wherever and whenever subscribers need them. With more than 20 years in the industry, 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 See certification. and TL 9000 approved, adhering to the principles of customer focus and quality improvement practices. More information is available at www.syniverse.com. Cautionary Notice Regarding 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. Certain of the statements in this Press Release may constitute "forward-looking statements" for purposes of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Syniverse to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements include, without limitation: statements regarding Syniverse's ability to continue to report strong results, whether as a result of organic growth and acquisitions or otherwise; Syniverse's ability to continue to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the positive growth in messaging and wireless data; Syniverse's ability to successfully and timely integrate BSG Wireless, and to realize the anticipated cost savings of that integration when and in the amounts anticipated; the ability of Syniverse to gain market acceptance and penetration in respect of several recent product introductions, including Datanet, GSM Visibility and Financial Clearing House services; Syniverse's guidance for 2008, as contained under the caption "Outlook", including, without limitation, expected net revenues, net income, adjusted EBITDA, cash net income and operating free cash flow for 2008, as well as the assumptions, estimates and judgments applied in creating such guidance. These forward looking statements are based upon information presently available to the Company's management and are inherently subjective, uncertain and subject to change, due to any number of risks and uncertainties, including, without limitation, those other risks and factors discussed in Syniverse's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2007 under the captions "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations - Forward-Looking Statements" and "Risk Factors" and otherwise in Syniverse's reports and filings that it makes with the Securities and Exchange Commission. You should not place undue reliance on any forward-looking statements, since those statements speak only as of the date that they are made. Syniverse has no obligation and does not undertake to publicly update, revise or correct any of the forward-looking statements after the date of this Press Release, or after the respective dates on which such statements otherwise are made, whether as a result of new information, future events, or otherwise, except as otherwise may be required by law. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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