Syneos Health (Nasdaq:SYNH), a leading fully integrated
biopharmaceutical solutions organization, today reported financial
results for the three months ended March 31, 2023.
“I’m encouraged by our first quarter results and the progress on
the recovery plan for Clinical awards compared to the fourth
quarter. Our enhanced operating model and differentiated strategy
continue to receive positive feedback from customers,” said
Michelle Keefe, CEO, Syneos Health. “We remain focused on our
strategic long-term growth priorities, driven by our relentless
customer focus and accelerated investments in our transformation
and profitability initiatives. Anchored by new collaborations with
Microsoft and KX, our technology investments are enabling us to
deploy “fit for purpose” solutions specific to each customer’s
needs.”
Please refer to the “Use of Non-GAAP Financial Measures” and
“Reconciliation of GAAP to Non-GAAP Measures” included in this
press release and accompanying tables for important disclosures
about non-GAAP measures and a reconciliation of these measures to
the nearest GAAP measures.
First Quarter 2023 Results
Revenue of $1,356.8 million increased 1.5% on a reported basis
and increased 2.4% on a constant currency basis for the three
months ended March 31, 2023, compared to the same period in
the prior year. Clinical Solutions revenue decreased 0.5% on a
reported basis and increased 0.2% on a constant currency basis to
$1,013.7 million. Commercial Solutions revenue increased 7.9% on a
reported basis and 9.4% on a constant currency basis to $343.1
million.
GAAP net loss for the three months ended March 31, 2023 was
$72.1 million, resulting in diluted loss per share of $0.70,
compared to GAAP net income of $46.2 million, or diluted earnings
per share of $0.44, for the three months ended March 31, 2022.
Adjusted net income for the three months ended March 31, 2023 was
$77.8 million, resulting in adjusted diluted earnings per share of
$0.75, compared to adjusted net income of $105.0 million, or
adjusted diluted earnings per share of $1.01, for the three months
ended March 31, 2022.
Adjusted EBITDA for the three months ended March 31, 2023 was
$151.1 million.
Net New Business Awards and Backlog
Net new business awards and book-to-bill ratios for the three
and twelve months ended March 31, 2023 were as follows (dollars in
millions):
|
|
Three Months EndedMarch 31, 2023 |
|
Twelve Months EndedMarch 31, 2023 |
|
|
|
Net New BusinessAwards |
|
|
|
Book-to-BillRatio |
|
|
|
Net New BusinessAwards |
|
|
|
Book-to-BillRatio |
|
Including reimbursable
out-of-pocket expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clinical Solutions |
|
$ |
713.6 |
|
|
|
0.70 |
x |
|
$ |
2,313.3 |
|
|
|
0.57 |
x |
Commercial Solutions |
|
|
369.6 |
|
|
|
1.08 |
x |
|
|
1,385.0 |
|
|
|
1.03 |
x |
Total |
|
$ |
1,083.2 |
|
|
|
0.80 |
x |
|
$ |
3,698.3 |
|
|
|
0.68 |
x |
Excluding reimbursable out-of-pocket expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clinical Solutions |
|
$ |
529.1 |
|
|
|
0.78 |
x |
|
$ |
1,764.9 |
|
|
|
0.63 |
x |
Commercial Solutions |
|
|
289.5 |
|
|
|
1.06 |
x |
|
|
1,146.6 |
|
|
|
1.03 |
x |
Total |
|
$ |
818.6 |
|
|
|
0.86 |
x |
|
$ |
2,911.5 |
|
|
|
0.75 |
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our backlog as of March 31, 2023, was as follows (dollars in
millions):
Including reimbursable out-of-pocket expenses: |
|
2023 |
|
|
2022 |
|
Change |
|
Clinical Solutions |
$ |
8,977.5 |
|
$ |
10,772.3 |
|
(16.7 |
)% |
Commercial Solutions - Deployment
Solutions |
|
855.6 |
|
|
861.8 |
|
(0.7 |
)% |
Total backlog |
$ |
9,833.1 |
|
$ |
11,634.1 |
|
(15.5 |
)% |
Excluding reimbursable
out-of-pocket expenses: |
|
|
|
|
|
Clinical Solutions |
$ |
5,924.0 |
|
$ |
6,977.5 |
|
(15.1 |
)% |
Commercial Solutions - Deployment
Solutions |
|
679.8 |
|
|
688.8 |
|
(1.3 |
)% |
Total backlog |
$ |
6,603.8 |
|
$ |
7,666.3 |
|
(13.9 |
)% |
|
|
|
|
|
|
|
|
|
Liquidity and Capital Management Update
Cash flows provided by operating activities were $30.4 million
during the three months ended March 31, 2023.
During the three months ended March 31, 2023, long-term debt
remained relatively unchanged. In March 2023, the Company entered
into interest rate swaps with multiple counterparties. The interest
rate swaps had an initial aggregate notional value of $650.0
million, an effective date of March 31, 2023, and will expire
on March 31, 2026.
During the three months ended March 31, 2023, the Company did
not repurchase any shares of common stock and, as of May 10, 2023,
has $350.0 million of remaining share repurchase authorization
available through December 31, 2024.
Cancellation of Earnings Call
In a separate press release issued today, Syneos Health
announced that it had entered into a definitive agreement pursuant
to which a group of private equity firms comprised of Elliott
Investment Management, Patient Square Capital and Veritas Capital
have agreed to acquire all of the outstanding shares of Syneos
Health (the “Merger”). Considering today’s announcement and the
pending transaction, Syneos Health will no longer be hosting its
previously scheduled conference call to discuss first quarter 2023
financial results.
About Syneos Health
Syneos Health® (Nasdaq:SYNH) is a leading fully integrated
biopharmaceutical solutions organization built to accelerate
customer success. We translate unique clinical, medical affairs and
commercial insights into outcomes to address modern market
realities.
We bring together a talented team of professionals, who work
across more than 110 countries, with a deep understanding of
patient and physician behaviors and market dynamics. Together we
share insights, use the latest technologies and apply advanced
business practices to speed our customers’ delivery of important
therapies to patients.
Syneos Health supports a diverse, equitable and inclusive
culture that cares for colleagues, customers, patients, communities
and the environment.
To learn more about how we are Shortening the distance from lab
to life®, visit syneoshealth.com or subscribe to our podcast.
Forward-Looking Statements
Except for historical information, all of the statements,
expectations, and assumptions contained in this press release are
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995, including, without
limitation, statements regarding inflation, rising interest rates,
and other macroeconomic trends on our business, financial results
and financial condition, expected interest rates, anticipated
financial results, our sales pipeline, existing backlog and
expectations of net awards, including expectations regarding lower
net new business awards, delays in backlog conversion, and customer
delays in its FSP business within Clinical Solutions, expected
non-GAAP tax rate, trends in reimbursable out-of-pocket expenses,
benefits of recent acquisitions, restructuring initiatives
including Project Velocity, capital management strategies, and
plans for capital deployment. Actual results might differ
materially from those explicit or implicit in the forward-looking
statements. Important factors that could cause actual results to
differ materially include, but are not limited to: risks related to
the proposed Merger, including that the Merger may not
be consummated at all or in the anticipated timeframe; the
potential for securities class action and derivative lawsuits and
other legal or regulatory proceedings in connection with the
Merger; restrictions on our business during the pendency of the
Merger that could affect our ability to pursue business
opportunities or strategic transactions; uncertainties relating to
the pendency of the Merger relating to our relationships with our
employees and third-party business partners; our ability to obtain
stockholder approval required to consummate the Merger; conditions
to closing the Merger may not be satisfied; the Merger may
involve unexpected costs, liabilities or delays; the effect of the
announcement of the Merger on our ability to retain and hire key
personnel and maintain relationships with customers, suppliers and
others with whom we do business, or on our operating results and
business generally; our business may suffer as a result of
uncertainty surrounding the Merger and disruption of management’s
attention due to the Merger; the outcome of any legal proceedings
related to the Merger; our potential failure to generate a large
number of new business awards and the risk of delay, termination,
reduction in scope, or failure to go to contract of our business
awards; our potential failure to convert backlog to revenue;
fluctuations in our operating results and effective income tax
rate; risks associated with the ongoing COVID-19 pandemic;
concentration of our customers or therapeutic areas; our potential
failure to successfully increase our market share, grow our
business, and execute our growth strategies; the impact of
potentially underpricing our contracts, overrunning our cost
estimates, or failing to receive approval for or experiencing
delays with documentation of change orders; cyber-security and
other risks associated with our information systems infrastructure;
changes and costs of compliance with regulations related to data
privacy; the risks associated with doing business internationally,
including risks related to the war in Ukraine; challenges by
tax authorities of our intercompany transfer pricing policies;
our ability to effectively upgrade our information systems; failure
to meet objectives of internal business transformation initiatives
and dependence on third parties for outsourcing; our failure to
perform our services in accordance with contractual requirements,
regulatory standards, and ethical considerations; risks related to
the management of clinical trials; the need to hire, develop, and
retain key personnel; the impact of unfavorable economic
conditions, including the uncertain international economic
environment and changes in foreign currency exchange rates; our
ability to protect our intellectual property; risks related to our
acquisition strategy, including our ability to realize synergies;
risks related to stockholder activism; our relationships with
customers who are in competition with each other; any failure to
realize the full value of our goodwill and intangible assets; our
compliance with anti-corruption and anti-bribery laws; our
dependence on third parties; potential employment liability; the
increasing focus on environmental sustainability and social
initiatives and impacts on our operations from climate change; our
ability to utilize net operating loss carryforwards and other tax
attributes; downgrades of our credit ratings; competition in the
biopharmaceutical services industry; outsourcing trends and
changes in aggregate spending and research and development budgets;
the impact of, including changes in, government regulations and
healthcare reform; intense competition faced by our customers from
lower cost generic products and other competing products; our
ability to keep pace with rapid technological change; the cost of
and our ability to service our substantial indebtedness; and other
risks related to ownership of our common stock and other risk
factors set forth in the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2022 as updated by the
Company’s other SEC filings, copies of which are available free of
charge on the Company’s website at investor.syneoshealth.com. The
Company assumes no obligation and does not intend to update these
forward-looking statements, except as required by law.
Additional Information and Where to Find it
This communication does not constitute an offer to buy or sell
or the solicitation of an offer to buy or sell any securities or a
solicitation of any vote or approval. The proposed transaction will
be submitted to the stockholders of Syneos Health for their
consideration and approval. In connection with the proposed
transaction, Syneos Health will file a preliminary proxy statement
with the SEC. Once the SEC completes its review of the preliminary
proxy statement, a definitive proxy statement and a form of proxy
will be filed with the SEC and mailed or otherwise furnished to the
stockholders of Syneos Health. Before making any voting decision,
Syneos Health stockholders are urged to read the proxy statement in
its entirety, when it becomes available, and any other documents to
be filed with the SEC in connection with the proposed merger or
incorporated by reference in the proxy statement, if any, because
they will contain important information about the proposed
transaction and the parties to the proposed transaction. This
communication is not a substitute for the proxy statement or any
other document that may be filed by Syneos Health with the SEC.
Syneos Health investors and stockholders may obtain a free copy
of the proxy statement and documents filed by Syneos Health with
the SEC at the SEC’s website at www.sec.gov. In addition, Syneos
Health investors and stockholders may obtain a free copy of Syneos
Health’s filings with the SEC from Syneos Health’s website at
investor.syneoshealth.com or by directing a request by mail to 1030
Sync Street, Morrisville, NC 27560 or telephone to +1 (919)
876-9300.
Participants in the Solicitation
Syneos Health and its respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from the stockholders of Syneos Health in respect of the
proposed transactions contemplated by the proxy statement.
Information regarding Syneos Health’s directors and executive
officers is contained in Syneos Health’s Annual Report on Form
10-K/A for the year ended December 31, 2022, filed with the SEC on
May 1, 2023 (the “Form 10-K/A”), and in the proxy statement
for Syneos Health’s 2022 annual meeting of stockholders on Schedule
14A, filed with the SEC on April 12, 2022. Additional information
regarding the persons who are, under the rules of the SEC,
participants in the solicitation of the stockholders of Syneos
Health in connection with the proposed transaction, including a
description of their direct or indirect interests, by security
holdings or otherwise, will be set forth in the proxy statement
when it is filed with the SEC, free copies of which may be obtained
as described in the preceding paragraph. To the extent holdings of
Syneos Health’s securities by Syneos Health’s directors and
executive officers change from the amounts set forth in the Form
10-K/A or in the proxy statement, such changes have been or will be
reflected on Statements of Change in Ownership on Form 4 filed with
the SEC.
Use of Non-GAAP Financial Measures and Operating Metrics
In addition to the financial measures prepared in accordance
with U.S. Generally Accepted Accounting Principles (“GAAP”), this
press release contains certain non-GAAP financial measures,
including adjusted net income (including adjusted diluted earnings
per share), EBITDA, adjusted EBITDA, and non-GAAP effective income
tax rate. We also present revenue growth in constant currency.
Constant currency revenue growth is defined as revenues for a given
period restated at the comparative period’s foreign currency
exchange rates measured against the comparative period’s revenues.
Constant currency segment revenue growth is defined as revenue for
a given period restated at the comparative period’s foreign
currency exchange rates measured against the comparative
period’s revenues.
A “non-GAAP financial measure” is generally defined as a
numerical measure of a company’s financial performance that
excludes or includes amounts from the most directly comparable
measure calculated and presented in accordance with GAAP in the
statements of operations, balance sheets, or statements of cash
flows of the Company.
The Company defines adjusted net income (including adjusted
diluted earnings per share) as net income (including diluted
earnings per share) excluding acquisition-related amortization;
restructuring and other costs; transaction, integration-related,
and other expenses; share-based compensation expense; other income
(expense), net; and the income tax effect of the above
adjustments.
EBITDA represents earnings before interest, taxes, depreciation
and amortization. The Company defines adjusted EBITDA as EBITDA,
further adjusted to exclude expenses and transactions that the
Company believes are not representative of its core operations,
namely: restructuring and other costs; transaction,
integration-related, and other expenses; share-based compensation
expense; and other income (expense), net. The Company presents
EBITDA and adjusted EBITDA because it believes they are useful
metrics for investors as they are commonly used by investors,
analysts and debt holders to measure the Company’s ability to fund
capital expenditures and meet working capital requirements.
Each of the non-GAAP measures noted above are used by management
and the Board to evaluate the Company’s core operating results
because they exclude certain items whose fluctuations from
period-to-period do not necessarily correspond to changes in the
core operations of the business. Adjusted net income (including
adjusted diluted earnings per share) and adjusted EBITDA are used
by management and the Board to assess the performance of the
Company’s business.
Non-GAAP measures have limitations in that they do not reflect
all of the amounts associated with the Company’s results of
operations as determined in accordance with GAAP. Also, other
companies might calculate these measures differently. Investors are
encouraged to review the reconciliations of the non-GAAP financial
measures to their most directly comparable GAAP measures included
in this press release and the accompanying tables.
We also present certain key operating metrics excluding
reimbursable out-of-pocket expenses, due to our expectations that
reimbursable out-of-pocket expenses as a percentage of revenue will
remain lower relative to pre-pandemic levels. Specifically,
Clinical Solutions book-to-bill ratio excluding reimbursable
out-of-pocket expenses, represents Clinical Solutions net new
business awards, excluding reimbursable out-of-pocket expenses,
divided by Clinical Solutions revenue, excluding reimbursable
out-of-pocket expenses, in each case for the respective period.
Commercial Solutions book-to-bill ratio excluding reimbursable
out-of-pocket expenses, represents Commercial Solutions net new
business awards, excluding reimbursable out-of-pocket expenses,
divided by Commercial Solutions revenue, excluding reimbursable
out-of-pocket expenses, in each case for the respective period.
Segment operating metrics such as backlog, net new business awards
and book-to-bill ratio are not necessarily indicative of future
financial results and are subject to change due to cancellations,
changes in project scope or delays.
Investor Relations Contact:Ronnie SpeightSenior Vice
President, Investor RelationsPhone: +1 919 745
2745Email: Investor.Relations@syneoshealth.com |
Press/Media Contact:Gary GatyasExecutive Director, External
CommunicationsPhone: +1 908 763
3428Email: gary.gatyas@syneoshealth.com |
Syneos Health, Inc.
and Subsidiaries |
Consolidated
Statements of Operations |
(in thousands,
except per share data) |
(unaudited) |
|
|
|
|
|
Three Months
Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
Revenue |
$ |
1,356,800 |
|
|
$ |
1,336,253 |
Costs and
operating expenses: |
|
|
|
Direct costs (exclusive of depreciation and amortization) |
|
1,088,549 |
|
|
|
1,044,432 |
Selling, general, and administrative expenses |
|
161,517 |
|
|
|
140,166 |
Restructuring and other costs |
|
84,687 |
|
|
|
15,557 |
Depreciation |
|
23,173 |
|
|
|
20,579 |
Amortization |
|
38,414 |
|
|
|
41,623 |
Total operating expenses |
|
1,396,340 |
|
|
|
1,262,357 |
(Loss)
income from operations |
|
(39,540 |
) |
|
|
73,896 |
Total other expense, net: |
|
|
|
Interest expense, net |
|
26,259 |
|
|
|
15,762 |
Other expense, net |
|
9,363 |
|
|
|
4,642 |
Total other expense, net |
|
35,622 |
|
|
|
20,404 |
(Loss)
income before provision for income taxes |
|
(75,162 |
) |
|
|
53,492 |
Income tax
(benefit) expense |
|
(3,013 |
) |
|
|
7,316 |
Net (loss) income |
$ |
(72,149 |
) |
|
$ |
46,176 |
(Loss)
earnings per share: |
|
|
|
Basic |
$ |
(0.70 |
) |
|
$ |
0.45 |
Diluted |
$ |
(0.70 |
) |
|
$ |
0.44 |
Weighted
average common shares outstanding: |
|
|
|
Basic |
|
103,326 |
|
|
|
103,665 |
Diluted |
|
103,326 |
|
|
|
104,410 |
|
|
|
|
Syneos Health, Inc.
and Subsidiaries |
Consolidated Balance
Sheets |
(in thousands,
except par value) |
(unaudited) |
|
|
|
|
|
March 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash, cash equivalents, and restricted cash |
$ |
111,055 |
|
|
$ |
112,004 |
|
Accounts receivable and unbilled services, net |
|
1,650,903 |
|
|
|
1,645,162 |
|
Prepaid expenses and other current assets |
|
184,320 |
|
|
|
186,770 |
|
Total current assets |
|
1,946,278 |
|
|
|
1,943,936 |
|
Property and
equipment, net |
|
245,672 |
|
|
|
264,295 |
|
Operating
lease right-of-use assets |
|
110,947 |
|
|
|
172,794 |
|
Goodwill |
|
4,907,070 |
|
|
|
4,897,518 |
|
Intangible
assets, net |
|
644,843 |
|
|
|
680,863 |
|
Deferred
income tax assets |
|
48,183 |
|
|
|
50,677 |
|
Other
long-term assets |
|
195,783 |
|
|
|
189,135 |
|
Total assets |
$ |
8,098,776 |
|
|
$ |
8,199,218 |
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
145,967 |
|
|
$ |
118,621 |
|
Accrued expenses |
|
618,091 |
|
|
|
614,200 |
|
Deferred revenue |
|
859,381 |
|
|
|
923,875 |
|
Current portion of operating lease obligations |
|
42,718 |
|
|
|
43,984 |
|
Current portion of finance lease obligations |
|
21,743 |
|
|
|
24,011 |
|
Total current liabilities |
|
1,687,900 |
|
|
|
1,724,691 |
|
Long-term
debt |
|
2,611,580 |
|
|
|
2,611,166 |
|
Operating
lease long-term obligations |
|
165,554 |
|
|
|
175,568 |
|
Finance
lease long-term obligations |
|
38,421 |
|
|
|
44,124 |
|
Deferred
income tax liabilities |
|
74,903 |
|
|
|
92,155 |
|
Other
long-term liabilities |
|
65,947 |
|
|
|
56,513 |
|
Total liabilities |
|
4,644,305 |
|
|
|
4,704,217 |
|
Commitments
and contingencies |
|
|
|
Shareholders’ equity: |
|
|
|
Preferred
stock, $0.01 par value; 30,000 shares authorized, 0 shares issued
and outstanding as of March 31, 2023 and December 31, 2022 |
|
— |
|
|
|
— |
|
Common
stock, $0.01 par value; 600,000 shares authorized, 103,641 and
102,911 shares issued and outstanding as of March 31, 2023 and
December 31, 2022, respectively |
|
1,036 |
|
|
|
1,029 |
|
Additional
paid-in capital |
|
3,482,614 |
|
|
|
3,460,152 |
|
Accumulated
other comprehensive loss, net of taxes |
|
(124,724 |
) |
|
|
(133,874 |
) |
Retained
earnings |
|
95,545 |
|
|
|
167,694 |
|
Total shareholders’ equity |
|
3,454,471 |
|
|
|
3,495,001 |
|
Total liabilities and shareholders’ equity |
$ |
8,098,776 |
|
|
$ |
8,199,218 |
|
|
|
|
|
Syneos Health, Inc.
and Subsidiaries |
Consolidated
Statements of Cash Flows |
(in thousands) |
(unaudited) |
|
|
|
|
|
Three Months
Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
Cash flows
from operating activities: |
|
|
|
Net (loss)
income |
$ |
(72,149 |
) |
|
$ |
46,176 |
|
Adjustments
to reconcile net (loss) income to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
61,587 |
|
|
|
62,202 |
|
Share-based compensation |
|
18,692 |
|
|
|
17,333 |
|
Provision for (recovery from) doubtful accounts |
|
374 |
|
|
|
(108 |
) |
(Benefit from) provision for deferred income taxes |
|
(12,052 |
) |
|
|
1,000 |
|
Foreign currency transaction adjustments |
|
4,898 |
|
|
|
434 |
|
Other non-cash items |
|
17,748 |
|
|
|
(1,945 |
) |
Changes in
operating assets and liabilities, net of effect of
acquisitions: |
|
|
|
Accounts receivable, unbilled services, and deferred revenue |
|
(66,855 |
) |
|
|
(49,905 |
) |
Accounts payable and accrued expenses |
|
33,825 |
|
|
|
39,650 |
|
Operating lease assets and liabilities |
|
51,085 |
|
|
|
(1,752 |
) |
Other assets and liabilities |
|
(6,729 |
) |
|
|
(42,198 |
) |
Net cash provided by operating activities |
|
30,424 |
|
|
|
70,887 |
|
Cash flows
from investing activities: |
|
|
|
Payments
related to acquisitions of businesses, net of cash acquired |
|
— |
|
|
|
(1,727 |
) |
Purchases of
property and equipment |
|
(27,509 |
) |
|
|
(23,474 |
) |
Investments
in unconsolidated affiliates |
|
(113 |
) |
|
|
(296 |
) |
Net cash used in investing activities |
|
(27,622 |
) |
|
|
(25,497 |
) |
Cash flows
from financing activities: |
|
|
|
Proceeds
from revolving line of credit |
|
55,000 |
|
|
|
130,000 |
|
Repayments
of revolving line of credit |
|
(55,000 |
) |
|
|
— |
|
Payments of
finance leases |
|
(3,671 |
) |
|
|
(2,193 |
) |
Payments for
repurchases of common stock |
|
— |
|
|
|
(149,961 |
) |
Proceeds
from exercises of stock options |
|
11,962 |
|
|
|
11,483 |
|
Payments
related to tax withholdings for share-based compensation |
|
(8,092 |
) |
|
|
(25,901 |
) |
Net cash provided by (used in) financing activities |
|
199 |
|
|
|
(36,572 |
) |
Effect of
exchange rate changes on cash, cash equivalents, and restricted
cash |
|
(3,950 |
) |
|
|
3,858 |
|
Net change in cash, cash equivalents, and restricted cash |
|
(949 |
) |
|
|
12,676 |
|
Cash, cash
equivalents, and restricted cash - beginning of period |
|
112,004 |
|
|
|
106,475 |
|
Cash, cash
equivalents, and restricted cash - end of period |
$ |
111,055 |
|
|
$ |
119,151 |
|
|
|
|
|
Syneos Health, Inc.
and Subsidiaries |
Reconciliation of
GAAP to Non-GAAP Measures |
(in thousands) |
(unaudited) |
|
|
|
|
|
Three Months
Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
EBITDA and
adjusted EBITDA: |
|
|
|
Net (loss)
income, as reported |
$ |
(72,149 |
) |
|
$ |
46,176 |
Interest expense, net |
|
26,259 |
|
|
|
15,762 |
Income tax (benefit) expense |
|
(3,013 |
) |
|
|
7,316 |
Depreciation |
|
23,173 |
|
|
|
20,579 |
Amortization (a) |
|
38,414 |
|
|
|
41,623 |
EBITDA |
|
12,684 |
|
|
|
131,456 |
Restructuring and other costs (b) |
|
84,687 |
|
|
|
15,557 |
Transaction, integration-related, and other expenses (c) |
|
25,702 |
|
|
|
4,639 |
Share-based compensation (d) |
|
18,692 |
|
|
|
17,333 |
Other expense, net (e) |
|
9,363 |
|
|
|
4,642 |
Adjusted
EBITDA |
$ |
151,128 |
|
|
$ |
173,627 |
Syneos Health, Inc.
and Subsidiaries |
Reconciliation of
GAAP to Non-GAAP Measures |
(in thousands,
except per share data) |
(unaudited) |
|
|
|
|
|
Three Months
Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
Adjusted net
income: |
|
|
|
Net (loss)
income, as reported |
$ |
(72,149 |
) |
|
$ |
46,176 |
|
Amortization (a) |
|
38,414 |
|
|
|
41,623 |
|
Restructuring and other costs (b) |
|
84,687 |
|
|
|
15,557 |
|
Transaction, integration-related, and other expenses (c) |
|
25,702 |
|
|
|
4,639 |
|
Share-based compensation (d) |
|
18,692 |
|
|
|
17,333 |
|
Other expense, net (e) |
|
9,363 |
|
|
|
4,642 |
|
Income tax adjustment to normalized rate (f) |
|
(26,912 |
) |
|
|
(24,946 |
) |
Adjusted net
income |
$ |
77,797 |
|
|
$ |
105,024 |
|
Diluted
weighted average common shares outstanding: |
|
|
|
Diluted
weighted average common shares outstanding, as reported |
|
103,326 |
|
|
|
104,410 |
|
Effect of certain securities considered anti-dilutive under
GAAP |
|
438 |
|
|
|
— |
|
Diluted
weighted average common shares outstanding |
|
103,764 |
|
|
|
104,410 |
|
Adjusted
diluted earnings per share |
$ |
0.75 |
|
|
$ |
1.01 |
|
a. Represents the amortization of intangible assets associated
with acquired backlog, customer relationships, trade names and
trademarks, intellectual property, patient communities, and
acquired technologies.b. Restructuring and other costs consist
primarily of termination costs associated with abandonment and
closure of redundant facilities and otherlease-related charges and
severance costs associated with reduction/optimization of our
workforce as part of our business transformation initiatives
including Project Velocity.c. Represents fees associated with
acquisitions, debt placement and refinancings, and other corporate
costs that management believes are not representative of our
operating performance, including one-time costs associated with our
business transformation initiatives including Project Velocity,
implementation costs associated with a new enterprise resource
planning system, and incremental costs resulting from the war in
Ukraine.d. Represents non-cash share-based compensation expense
related to awards granted under equity incentive plans.e. Other
expense, net is comprised primarily of foreign currency exchange
gains and losses, and other gains and losses related to
investments.f. Represents the income tax effect of the non-GAAP
adjustments made to arrive at adjusted net income using an
estimated effective tax rate of approximately 23.5% for the three
months ended March 31, 2023 and March 31, 2022. These rates have
been adjusted to exclude tax impacts related to valuation
allowances recorded against deferred tax assets.
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