UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from _______ to _______.
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices and Zip Code)
(
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of October 31, 2022, there were approximately
SYNEOS HEALTH, INC.
FORM 10-Q
TABLE OF CONTENTS
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Item 1. |
3 |
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3 |
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4 |
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Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 (unaudited) |
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6 |
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7 |
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Notes to Condensed Consolidated Financial Statements (unaudited) |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
37 |
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Item 4. |
37 |
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Item 1. |
38 |
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Item 1A. |
38 |
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Item 2. |
Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
39 |
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Item 5. |
40 |
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Item 6. |
41 |
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42 |
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
SYNEOS HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2022 |
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2021 |
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2022 |
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2021 |
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(in thousands, except per share data) |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Costs and operating expenses: |
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Direct costs (exclusive of depreciation and amortization) |
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Selling, general, and administrative expenses |
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Restructuring and other costs |
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Depreciation |
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Amortization |
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Total operating expenses |
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Income from operations |
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Total other expense, net: |
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Interest income |
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Interest expense |
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Loss on extinguishment of debt |
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— |
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Other income, net |
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Total other expense, net |
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Income before provision for income taxes |
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Income tax expense |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Earnings per share: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average common shares outstanding: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
SYNEOS HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2022 |
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2021 |
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2021 |
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(in thousands) |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Unrealized (loss) gain on derivative instruments, net of income tax (benefit) expense of ($ |
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Foreign currency translation adjustments, net of income tax expense (benefit) of $ |
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Comprehensive income |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
SYNEOS HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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September 30, 2022 |
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December 31, 2021 |
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(in thousands, except par value) |
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ASSETS |
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Current assets: |
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Cash, cash equivalents, and restricted cash |
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$ |
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$ |
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Accounts receivable and unbilled services, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Goodwill |
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Intangible assets, net |
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Deferred income tax assets |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Deferred revenue |
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Current portion of operating lease obligations |
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Current portion of finance lease obligations |
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Total current liabilities |
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Long-term debt |
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Operating lease long-term obligations |
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Finance lease long-term obligations |
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Deferred income tax liabilities |
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Other long-term liabilities |
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Total liabilities |
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Shareholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss, net of taxes |
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Retained earnings (accumulated deficit) |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
SYNEOS HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Nine Months Ended |
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2022 |
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2021 |
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(in thousands) |
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Cash flows from operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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Share-based compensation |
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Provision for doubtful accounts |
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Provision for (benefit from) deferred income taxes |
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Foreign currency transaction adjustments |
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Fair value adjustment of contingent obligations |
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Loss on extinguishment of debt |
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Other non-cash items |
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Changes in operating assets and liabilities, net of effect of acquisitions: |
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Accounts receivable, unbilled services, and deferred revenue |
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Accounts payable and accrued expenses |
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Other assets and liabilities |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Payments related to acquisitions of businesses, net of cash acquired |
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Proceeds from notes receivable from divestiture |
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Purchases of property and equipment |
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Investments in unconsolidated affiliates |
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Loan to unconsolidated affiliate |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Proceeds from issuance of long-term debt, net of discount |
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Payments of debt financing costs |
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Repayments of long-term debt |
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Proceeds from accounts receivable financing agreement |
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Proceeds from revolving line of credit |
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Repayments of revolving line of credit |
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Payments of contingent consideration related to acquisitions |
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Payments of finance leases |
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Payments for repurchases of common stock |
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Proceeds from exercises of stock options |
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Payments related to tax withholdings for share-based compensation |
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Net cash used in financing activities |
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Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
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Net change in cash, cash equivalents, and restricted cash |
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Cash, cash equivalents, and restricted cash - beginning of period |
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Cash, cash equivalents, and restricted cash - end of period |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
SYNEOS HEALTH, INC. AND SUBSIDIARIES
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2022 |
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2021 |
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2022 |
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2021 |
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(in thousands) |
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Shareholders’ equity, beginning balance |
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$ |
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$ |
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$ |
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$ |
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Common stock: |
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Beginning balance |
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Repurchases of common stock |
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— |
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Issuances of common stock |
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Ending balance |
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Additional paid-in capital: |
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Beginning balance |
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Repurchases of common stock |
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Issuances of common stock |
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Share-based compensation |
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Ending balance |
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