Synchronoss receives $30.2mln in CARES Act tax refund, pays down loan.

• Synchronoss Technologies receives $30.2 million CARES Act tax refund. • Company pays down $22.6 million of existing term loan. • Additional $3.7 million expected by Labor Day 2025. • Total refund amount $33.9 million, including $5.9 million interest payment.

Synchronoss Technologies (Nasdaq: SNCR), a global leader in personal Cloud solutions, has received a significant tax refund from the 2020 CARES Act totaling $30.2 million, with an additional $3.7 million expected by Labor Day 2025. The total refund amount is $33.9 million, including $5.9 million in interest payment [1].

The company has allocated 75% ($22.6 million) of the received funds to pay down its existing term loan at par, as per its Credit Agreement. This strategic debt reduction will yield approximately $2.9 million in annual interest savings at current rates [1]. After the final payment, Synchronoss will have reduced its total debt to $173.4 million, maintaining a cash position of approximately $30 million, resulting in net debt of about $143 million [1].

The debt reduction strategy has significantly improved the company's financial position. Over the past four years, Synchronoss has cut its total debt by over $100 million. Additionally, the company 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 [1].

The remaining portion of the refund will strengthen the balance sheet, providing operational flexibility and investment capital for the company's 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 [1].

The company's Chief Financial Officer, Lou Ferraro, expressed gratitude for the successful receipt of the refund and the diligence of the team. He stated, "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" [1].

References:
[1] https://www.stocktitan.net/news/SNCR/synchronoss-technologies-announces-receipt-of-federal-cares-act-tax-naatyzqafm40.html