Synchronoss Technologies Inc (NASDAQ:SNCR) announced that it has received a tax refund of $30.2 million under the 2020 CARES Act.
The provider of personal Cloud solutions said that the Internal Revenue Service confirmed the total refund amount will be $33.9 million, including $5.9 million in interest.
An additional $3.7 million is expected to be received before Labor Day 2025.
The company said 75% percent of the $30.2 million received, or $22.6 million, has been used to pay down the company’s term loan at par.
Once the remaining $3.7 million is received, about $25.4 million of the total refund will have been used to reduce the company’s $200 million term loan facility.
This payment is expected to lower annual interest costs by approximately $2.9 million at the current rate.
After the payment is applied, the company’s total debt will be $173.4 million, with about $30 million in cash and $143 million in net debt.
The company highlighted that it has lowered its total debt by more than $100 million over the past four years.
It also expects to become eligible for a one-time 50-basis-point interest rate reduction on the first anniversary of the term loan.
The rest of the refund will be retained on the balance sheet to enhance operational flexibility and support investments in the company’s personal Cloud offering.
“This payment allows us to not only improve our capital structure but also provides the company with additional cash to pursue operational priorities,” Synchronoss CEO Lou Ferraro said.
“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.”
Shares of Synchronoss jumped nearly 18% on Thursday morning to reach around $8.85.