TAMPA—Syniverse Holdings Inc. capped its first year as a publicly traded company with improved net income despite a decline in revenues for the fourth quarter.
Revenues for the quarter totaled $83.6 million, down 5.3 percent from fourth-quarter revenues of $88.3 million during 2004. Total revenues for the year were up 2.8 percent over 2004, to $341.8 million from $332.4 million.
Net income came in at $15.3 million, or 23 cents per share, which compares with a net loss during the preceding fourth quarter of $3.9 million, or 10 cents per share. For the year, net income was $5.6 million, or 9 cents per share, compared with a loss of $16.5 million, or 41 cents per share, in 2004.
Adjusted earnings before interest, taxes, depreciation and amortization was $36.3 million for the quarter, down 3.6 percent from EBIDTA of $37.7 million in the fourth quarter of 2004. Adjusted EBITDA for the year was $146.4 million, up 9.4 percent from $133.8 million in 2004.
Ray Lawless, chief financial officer at Syniverse, said the company paid down more than $97 million in debt during 2005.
The company’s president and chief executive officer, Tony Holcombe, highlighted several achievements for 2005, including a GSM clearing and settlement services contract with Vodafone Group plc, signing on several U.S. clearinghouse services customers including T-Mobile USA Inc., Cingular Wireless L.L.C. and Sprint Nextel Corp., and increased interest in its data and messaging solutions. Going forward, though, Holcombe offered a conservative view for the coming year.
“Despite favorable industry trends, however, a number of factors will weigh on 2006 financial results. First, in Europe, we have been investing significantly in our clearinghouse platform and have signed several major customers, but now believe longer migration times for new customers like Vodafone will likely push some of the revenues expected in 2006 to 2007,” said Holcombe. “Second, over the past quarter we have renewed several major customer contracts often with pricing concessions in exchange for longer terms.
“Although we expect volume increases to more than offset these pricing concessions over time, we now believe 2006 revenue from these customers will be lower than our previous expectations,” continued Holcombe. “And finally, despite significant interest by many carriers in our new services, we are now expecting slower adoption of several of our newer services due to delayed carrier purchasing decisions. As a result, we expect net revenue to be in the range of $330 to $340 million in 2006, but will maintain tight cost controls to manage to our historic margins.”
