Synchronoss Technologies Announces Receipt of Federal CARES Act Tax Refund

Rhea-AI Summary

Synchronoss Technologies (Nasdaq: SNCR) has received a significant tax refund from the 2020 CARES Act totaling $33.9 million, including $5.9 million in interest. The company has already received $30.2 million, with the remaining $3.7 million expected before Labor Day 2025.

Of the received amount, 75% ($22.6 million) has been used to pay down the company's existing term loan at par. After the final payment, total debt reduction will reach $25.4 million, resulting in annual interest savings of approximately $2.9 million. Post-payments, Synchronoss will have total debt of $173.4 million, cash of about $30 million, and net debt of roughly $143 million.

Positive

• Receipt of substantial $33.9 million tax refund including $5.9 million in interest
• Significant debt reduction of $25.4 million from refund proceeds
• Annual interest savings of approximately $2.9 million at current rates
• Total debt reduction of over $100 million in the last 4 years
• Expected 50-basis point interest rate reduction on first loan anniversary
• Additional operational flexibility from remaining refund proceeds

Negative

• Significant remaining debt load of $173.4 million after payments
• Net debt position of approximately $143 million still substantial

Insights

Financial Restructuring Specialist

Synchronoss received $30.2M tax refund, using 75% to reduce debt, strengthening balance sheet and saving $2.9M annually in interest.

Synchronoss has received a substantial $30.2 million tax refund from the 2020 CARES Act, with an additional $3.7 million expected before Labor Day. The company has already allocated 75% ($22.6 million) of the received funds to pay down its existing term loan at par, in accordance with its Credit Agreement. This strategic debt reduction will yield approximately $2.9 million in annual interest savings at current rates.

The debt reduction strategy has significantly improved the company's financial position. Once all payments are applied, Synchronoss will have reduced its total debt to $173.4 million, while maintaining a cash position of approximately $30 million, resulting in net debt of about $143 million. This represents substantial progress in their deleveraging efforts, having cut total debt by over $100 million in the past four years.

The company also expects to qualify for a 50-basis point interest rate reduction on the first anniversary of the term loan due to its improved debt leverage ratio. The remaining portion of the refund will strengthen the balance sheet, providing operational flexibility and investment capital for their Personal Cloud solution.

This financial windfall enhances Synchronoss's capital structure at a crucial time, reducing debt service costs while preserving liquidity for operational priorities. The company appears well-positioned to continue improving its balance sheet through free cash flow generated by its high-margin Personal Cloud business.

Received Refund Amount of $30.2 Million with Additional $3.7 Million Expected by Labor Day 2025

75% of Received Proceeds Have Been Used to Pay Down Existing Term Loan at Par, Per Prior Agreement

BRIDGEWATER, N.J., July 24, 2025 (GLOBE NEWSWIRE) -- Synchronoss Technologies Inc. (“Synchronoss” or the “Company”) (Nasdaq: SNCR), a global leader and innovator in Personal Cloud platforms, today announced the receipt of the expected tax refund from the 2020 CARES Act. The Internal Revenue Service has confirmed the total amount of the refund will be $33.9 million, which includes $5.9 million of interest payment. Currently, the Company has received $30.2 million, of which 75% or $22.6 million, has already been used to pay down the existing term loan at par. The Internal Revenue Service has indicated that the final payment of $3.7 million should be received by the Company prior to Labor Day 2025.

Seventy-five percent of the total proceeds from the refund, totaling approximately $25.4 million after the receipt of the final payment, will pay down a portion of the $200 million term loan facility at par pursuant to the terms of the Credit Agreement. This will result in an annual interest savings of approximately $2.9 million at the current interest rate. After the payments have been applied to the term loan, the Company will have total debt of $173.4 million, cash of approximately $30 million and net debt of approximately $143 million. The Company has reduced its total debt by over $100 million dollars over the course of the last 4 years. Additionally, the Company expects to be eligible for a one-time 50-basis point interest rate step down on the first anniversary of the term loan pursuant to the terms of the Credit Agreement based on the improved debt leverage ratio.

The remainder of the refund proceeds will move to the balance sheet, providing the Company with additional operational flexibility to improve its capital structure and for investment in its Personal Cloud solution.

“After a lengthy period of anticipation, we are very pleased to announce that we have received the vast majority of our payment from the IRS with the remainder to be received before Labor Day. I want to thank our entire team for their diligence and effort across multiple quarters to make this happen, including our excellent partners at Grant Thornton,” said Lou Ferraro, Chief Financial Officer of Synchronoss. “This payment allows us to not only improve our capital structure but also provides the Company with additional cash to pursue operational priorities. We anticipate that the free cash flow generated by our high-margin personal Cloud solutions business will allow for the continued improvement of our balance sheet. We are thankful to have reached a satisfactory conclusion to the process and look forward to providing more details on our next earnings call.”

About Synchronoss
Synchronoss Technologies (Nasdaq: SNCR), a global leader in personal Cloud solutions, empowers service providers to establish secure and meaningful connections with their subscribers. Our SaaS Cloud platform simplifies onboarding processes and fosters subscriber engagement, resulting in enhanced revenue streams, reduced expenses, and faster time-to-market. Millions of subscribers trust Synchronoss to safeguard their most cherished memories and important digital content. Explore how our Cloud-focused solutions redefine the way you connect with your digital world at www.synchronoss.com.

Media Relations Contact:
Domenick Cilea
Springboard
dcilea@springboardpr.com

Investor Relations Contact:
Ryan Gardella
ICR for Synchronoss
SNCRIR@icrinc.com

FAQ

How much tax refund did Synchronoss (SNCR) receive from the CARES Act?

Synchronoss received $30.2 million initially, with an additional $3.7 million expected by Labor Day 2025, totaling $33.9 million including $5.9 million in interest.

How is Synchronoss (SNCR) using the CARES Act tax refund?

Synchronoss is using 75% of the refund (approximately $25.4 million) to pay down its term loan at par, with the remainder strengthening its balance sheet for operational flexibility.

What will be Synchronoss (SNCR) total debt after applying the tax refund?

After applying the tax refund payments, Synchronoss will have total debt of $173.4 million, cash of approximately $30 million, and net debt of approximately $143 million.

How much will Synchronoss (SNCR) save in annual interest from the debt reduction?

The debt reduction will result in annual interest savings of approximately $2.9 million at current interest rates.

What is the impact on Synchronoss (SNCR) interest rates going forward?

Synchronoss expects to qualify for a one-time 50-basis point interest rate reduction on the first anniversary of the term loan due to improved debt leverage ratio.