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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission File Number: 001-37979

 

VERRA MOBILITY CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 

81-3563824

(State of

 

(I.R.S. Employer

Incorporation)

 

Identification No.)

 

 

 

1150 North Alma School Road

 

85201

Mesa, Arizona

 

(Zip Code)

(Address of Principal Executive Offices)

 

 

(480) 443-7000

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

(Title of Each Class)

 

(Trading Symbol)

 

(Name of Each Exchange on Which Registered)

Class A Common Stock, par value $0.0001 per share

 

VRRM

 

Nasdaq Capital Market

 

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. YES ☒ NO ☐

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). YES ☒ NO ☐

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:

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

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 ☐ NO

As of August 2, 2024, there were 164,658,507 shares of the Company’s Class A Common Stock, par value $0.0001 per share, issued and outstanding.

 

 


 

VERRA MOBILITY CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2024

TABLE OF CONTENTS

 

PART I—FINANCIAL INFORMATION

 

4

Item 1. Financial Statements

 

4

Condensed Consolidated Balance Sheets

 

4

Condensed Consolidated Statements of Operations and Comprehensive Income

 

5

Condensed Consolidated Statements of Stockholders’ Equity

 

6

Condensed Consolidated Statements of Cash Flows

 

7

Notes to the Condensed Consolidated Financial Statements

 

9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

25

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

36

Item 4. Controls and Procedures

 

37

PART II—OTHER INFORMATION

 

38

Item 1. Legal Proceedings

 

38

Item 1A. Risk Factors

 

38

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

 

38

Item 3. Defaults Upon Senior Securities

 

38

Item 4. Mine Safety Disclosures

 

38

Item 5. Other Information

 

38

Item 6. Exhibits

 

40

SIGNATURES

 

41

 

2


 

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of federal securities laws. All statements contained in this Report other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, products, services, and technology offerings, market conditions, growth and trends, expansion plans and opportunities, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “preliminary,” “likely” and similar expressions, and the negative of these expressions, are intended to identify forward-looking statements.

The future events and trends discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Factors that could cause actual results to differ include the risks and uncertainties described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 (our “Annual Report”), which highlight, among other risks:

customer concentration in our Commercial Services and Government Solutions segments, including risks relating to our contract with NYCDOT (defined below), which expires December 31, 2024 and is subject to competitive procurement, and for which there can be no assurance that we will be successful in extending;
risks and uncertainties related to our government contracts, including legislative changes, termination rights, delays in payments, audits and investigations;
decreases in the prevalence or political acceptance of, or an increase in governmental restrictions regarding, automated and other similar methods of photo enforcement, parking solutions or the use of tolling;
our ability to successfully implement our acquisition strategy or integrate acquisitions;
our ability to remediate the material weakness in internal controls over financial reporting on a timely basis and ability to establish and maintain effective internal controls over financial reporting;
failure in or breaches of our networks or systems, including as a result of cyber-attacks or other incidents;
risks and uncertainties related to our international operations;
our failure to acquire necessary intellectual property or adequately protect our intellectual property;
our ability to manage our substantial level of indebtedness; and
our reliance on specialized third-party providers.

You should not rely on forward-looking statements as predictions of future events. We operate in a very competitive and rapidly changing environment and new risks emerge from time to time. The forward-looking statements in this Report represent our views as of the date hereof. We undertake no obligation to update any of these forward-looking statements for any reason or to conform these statements to actual results or revised expectations.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, are available free of charge on our website, verramobility.com, under the heading “Investors” immediately after they are filed with, or furnished to, the SEC. We use our investor relations website, ir.verramobility.com, as a means of disclosing information, which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media. Information contained on or accessible through, including any reports available on, our website is not a part of, and is not incorporated by reference into, this Report or any other report or document we file with the SEC. Any reference to our website in this Report is intended to be an inactive textual reference only.

Unless the context indicates otherwise, the terms “Verra Mobility,” the “Company,” “we,” “us,” and “our” as used in this Report refer to Verra Mobility Corporation, a Delaware corporation, and its subsidiaries taken as a whole.

3


 

Part I—Financial Information

Item 1. Financial Statements

VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(In thousands, except per share data)

 

June 30,
2024

 

 

December 31,
2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

122,020

 

 

$

136,309

 

Restricted cash

 

 

3,378

 

 

 

3,413

 

Accounts receivable (net of allowance for credit losses of $21.6 million and
$
18.5 million at June 30, 2024 and December 31, 2023, respectively)

 

 

210,207

 

 

 

197,824

 

Unbilled receivables

 

 

44,151

 

 

 

37,065

 

Inventory

 

 

17,165

 

 

 

17,966

 

Prepaid expenses and other current assets

 

 

52,721

 

 

 

46,961

 

Total current assets

 

 

449,642

 

 

 

439,538

 

Installation and service parts, net

 

 

23,347

 

 

 

22,895

 

Property and equipment, net

 

 

133,314

 

 

 

123,248

 

Operating lease assets

 

 

30,346

 

 

 

33,523

 

Intangible assets, net

 

 

266,971

 

 

 

301,025

 

Goodwill

 

 

834,745

 

 

 

835,835

 

Other non-current assets

 

 

34,632

 

 

 

33,919

 

Total assets

 

$

1,772,997

 

 

$

1,789,983

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

84,888

 

 

$

78,749

 

Deferred revenue

 

 

26,402

 

 

 

28,788

 

Accrued liabilities

 

 

58,911

 

 

 

93,119

 

Tax receivable agreement liability, current portion

 

 

5,098

 

 

 

5,098

 

Current portion of long-term debt

 

 

 

 

 

9,019

 

Total current liabilities

 

 

175,299

 

 

 

214,773

 

Long-term debt, net of current portion

 

 

1,036,338

 

 

 

1,029,113

 

Operating lease liabilities, net of current portion

 

 

26,666

 

 

 

29,124

 

Tax receivable agreement liability, net of current portion

 

 

48,369

 

 

 

48,369

 

Asset retirement obligations

 

 

15,258

 

 

 

14,580

 

Deferred tax liabilities, net

 

 

16,835

 

 

 

18,360

 

Other long-term liabilities

 

 

15,605

 

 

 

14,197

 

Total liabilities

 

 

1,334,370

 

 

 

1,368,516

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Preferred stock, $0.0001 par value, 1,000 shares authorized with no shares issued and outstanding at June 30, 2024 and December 31, 2023

 

 

 

 

 

 

Common stock, $0.0001 par value, 260,000 shares authorized with 164,658
and
166,555 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

 

 

16

 

 

 

17

 

Additional paid-in capital

 

 

556,494

 

 

 

557,513

 

Accumulated deficit

 

 

(105,881

)

 

 

(125,887

)

Accumulated other comprehensive loss

 

 

(12,002

)

 

 

(10,176

)

Total stockholders' equity

 

 

438,627

 

 

 

421,467

 

Total liabilities and stockholders' equity

 

$

1,772,997

 

 

$

1,789,983

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

4


 

VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In thousands, except per share data)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Service revenue

 

$

212,017

 

 

$

196,050

 

 

$

414,738

 

 

$

380,748

 

Product sales

 

 

10,409

 

 

 

8,411

 

 

 

17,418

 

 

 

15,616

 

Total revenue

 

 

222,426

 

 

 

204,461

 

 

 

432,156

 

 

 

396,364

 

Cost of service revenue, excluding depreciation and amortization

 

 

4,641

 

 

 

4,338

 

 

 

8,946

 

 

 

8,568

 

Cost of product sales

 

 

7,848

 

 

 

5,962

 

 

 

13,134

 

 

 

11,345

 

Operating expenses

 

 

74,903

 

 

 

65,657

 

 

 

145,543

 

 

 

127,500

 

Selling, general and administrative expenses

 

 

46,343

 

 

 

43,205

 

 

 

94,514

 

 

 

83,218

 

Depreciation, amortization and (gain) loss on disposal of assets, net

 

 

27,522

 

 

 

29,088

 

 

 

54,497

 

 

 

59,421

 

Total costs and expenses

 

 

161,257

 

 

 

148,250

 

 

 

316,634

 

 

 

290,052

 

Income from operations

 

 

61,169

 

 

 

56,211

 

 

 

115,522

 

 

 

106,312

 

Interest expense, net

 

 

18,845

 

 

 

22,771

 

 

 

38,480

 

 

 

45,458

 

Change in fair value of private placement warrants

 

 

 

 

 

10,918

 

 

 

 

 

 

25,519

 

Gain on interest rate swap

 

 

(23

)

 

 

(4,805

)

 

 

(419

)

 

 

(2,007

)

Loss on extinguishment of debt

 

 

 

 

 

209

 

 

 

595

 

 

 

1,558

 

Other income, net

 

 

(5,245

)

 

 

(4,512

)

 

 

(9,698

)

 

 

(8,268

)

Total other expenses

 

 

13,577

 

 

 

24,581

 

 

 

28,958

 

 

 

62,260

 

Income before income taxes

 

 

47,592

 

 

 

31,630

 

 

 

86,564

 

 

 

44,052

 

Income tax provision

 

 

13,369

 

 

 

12,522

 

 

 

23,192

 

 

 

20,367

 

Net income

 

$

34,223

 

 

$

19,108

 

 

$

63,372

 

 

$

23,685

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Change in foreign currency translation adjustment

 

 

1,434

 

 

 

718

 

 

 

(1,826

)

 

 

628

 

Total comprehensive income

 

$

35,657

 

 

$

19,826

 

 

$

61,546

 

 

$

24,313

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.21

 

 

$

0.13

 

 

$

0.38

 

 

$

0.16

 

Diluted

 

$

0.20

 

 

$

0.13

 

 

$

0.38

 

 

$

0.16

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

166,064

 

 

 

151,132

 

 

 

166,152

 

 

 

150,151

 

Diluted

 

 

168,615

 

 

 

152,590

 

 

 

168,670

 

 

 

151,586

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

5


 

VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

For the Three and Six Months Ended June 30, 2024

 

 

 

Common
Stock

 

 

Common
Stock
Contingent

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders'

 

(In thousands)

 

Shares

 

 

Amount

 

 

Consideration

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

Balance as of December 31, 2023

 

 

166,555

 

 

$

17

 

 

$

 

 

$

557,513

 

 

$

(125,887

)

 

$

(10,176

)

 

$

421,467

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29,149

 

 

 

 

 

 

29,149

 

Share repurchases and retirement

 

 

(534

)

 

 

 

 

 

 

 

 

(1,789

)

 

 

1,789

 

 

 

 

 

 

 

Vesting of restricted stock units ("RSUs") and performance share units ("PSUs")

 

 

445

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

50

 

 

 

 

 

 

 

 

 

689

 

 

 

 

 

 

 

 

 

689

 

Payment of employee tax withholding related to RSUs and PSUs vesting

 

 

 

 

 

 

 

 

 

 

 

(4,608

)

 

 

 

 

 

 

 

 

(4,608

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

5,558

 

 

 

 

 

 

 

 

 

5,558

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,260

)

 

 

(3,260

)

Balance as of March 31, 2024

 

 

166,516

 

 

 

17

 

 

 

 

 

 

557,363

 

 

 

(94,949

)

 

 

(13,436

)

 

 

448,995

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34,223

 

 

 

 

 

 

34,223

 

Share repurchases and retirement

 

 

(2,000

)

 

 

(1

)

 

 

 

 

 

(6,694

)

 

 

(45,155

)

 

 

 

 

 

(51,850

)

Vesting of RSUs and PSUs

 

 

120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

22

 

 

 

 

 

 

 

 

 

285

 

 

 

 

 

 

 

 

 

285

 

Payment of employee tax withholding related to RSUs and PSUs vesting

 

 

 

 

 

 

 

 

 

 

 

(1,050

)

 

 

 

 

 

 

 

 

(1,050

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

6,590

 

 

 

 

 

 

 

 

 

6,590

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,434

 

 

 

1,434

 

Balance as of June 30, 2024

 

 

164,658

 

 

$

16

 

 

$

 

 

$

556,494

 

 

$

(105,881

)

 

$

(12,002

)

 

$

438,627

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three and Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2022

 

 

148,962

 

 

$

15

 

 

$

36,575

 

 

$

305,423

 

 

$

(98,078

)

 

$

(12,865

)

 

$

231,070

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,577

 

 

 

 

 

 

4,577

 

Vesting of RSUs and PSUs

 

 

313

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

53

 

 

 

 

 

 

 

 

 

699

 

 

 

 

 

 

 

 

 

699

 

Payment of employee tax withholding related to RSUs and PSUs vesting

 

 

 

 

 

 

 

 

 

 

 

(2,526

)

 

 

 

 

 

 

 

 

(2,526

)

Exercise of warrants

 

 

633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

3,378

 

 

 

 

 

 

 

 

 

3,378

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(90

)

 

 

(90

)

Balance as of March 31, 2023

 

 

149,961

 

 

 

15

 

 

 

36,575

 

 

 

306,974

 

 

 

(93,501

)

 

 

(12,955

)

 

 

237,108

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19,108

 

 

 

 

 

 

19,108

 

Earn-out shares issued to PE Greenlight Holdings, LLC

 

 

2,500

 

 

 

 

 

 

(18,288

)

 

 

18,288

 

 

 

 

 

 

 

 

 

 

Vesting of RSUs

 

 

121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

127

 

 

 

 

 

 

 

 

 

1,689

 

 

 

 

 

 

 

 

 

1,689

 

Payment of employee tax withholding related to RSUs vesting

 

 

 

 

 

 

 

 

 

 

 

(502

)

 

 

 

 

 

 

 

 

(502

)

Exercise of warrants

 

 

14,208

 

 

 

2

 

 

 

 

 

 

202,652

 

 

 

 

 

 

 

 

 

202,654

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

4,525

 

 

 

 

 

 

 

 

 

4,525

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

718

 

 

 

718

 

Balance as of June 30, 2023

 

 

166,917

 

 

$

17

 

 

$

18,287

 

 

$

533,626

 

 

$

(74,393

)

 

$

(12,237

)

 

$

465,300

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

 

6


 

VERRA MOBILITY CORPORATION

condensed consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Six Months Ended June 30,

 

($ in thousands)

 

2024

 

 

2023

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net income

 

$

63,372

 

 

$

23,685

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

54,351

 

 

 

59,305

 

Amortization of deferred financing costs and discounts

 

 

2,394

 

 

 

2,469

 

Change in fair value of private placement warrants

 

 

 

 

 

25,519

 

Change in fair value of interest rate swap

 

 

147

 

 

 

(3,563

)

Loss on extinguishment of debt

 

 

595

 

 

 

1,558

 

Credit loss expense

 

 

9,306

 

 

 

4,956

 

Deferred income taxes

 

 

(699

)

 

 

(4,733

)

Stock-based compensation

 

 

12,148

 

 

 

7,903

 

Other

 

 

465

 

 

 

134

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(21,968

)

 

 

(21,071

)

Unbilled receivables

 

 

(7,231

)

 

 

(6,120

)

Inventory

 

 

653

 

 

 

(55

)

Prepaid expenses and other assets

 

 

(4,192

)

 

 

3,000

 

Deferred revenue

 

 

(2,208

)

 

 

5,768

 

Accounts payable and other current liabilities

 

 

(31,170

)

 

 

8,890

 

Other liabilities

 

 

(1,595

)

 

 

282

 

Net cash provided by operating activities

 

 

74,368

 

 

 

107,927

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Cash receipts (payments) for interest rate swap

 

 

566

 

 

 

(1,556

)

Purchases of installation and service parts and property and equipment

 

 

(28,333

)

 

 

(30,098

)

Cash proceeds from the sale of assets

 

 

90

 

 

 

129

 

Net cash used in investing activities

 

 

(27,677

)

 

 

(31,525

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

Repayment of long-term debt

 

 

(4,509

)

 

 

(77,009

)

Payment of debt issuance costs

 

 

(224

)

 

 

(192

)

Proceeds from the exercise of warrants

 

 

 

 

 

105,750

 

Share repurchases and retirement

 

 

(51,500

)

 

 

 

Proceeds from the exercise of stock options

 

 

974

 

 

 

2,388

 

Payment of employee tax withholding related to RSUs and PSUs vesting

 

 

(5,658

)

 

 

(3,028

)

Net cash (used in) provided by financing activities

 

 

(60,917

)

 

 

27,909

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(98

)

 

 

73

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(14,324

)

 

 

104,384

 

Cash, cash equivalents and restricted cash - beginning of period

 

 

139,722

 

 

 

109,115

 

Cash, cash equivalents and restricted cash - end of period

 

$

125,398

 

 

$

213,499

 

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents, and restricted cash
to the condensed consolidated balance sheets

 

 

 

 

 

 

Cash and cash equivalents

 

$

122,020

 

 

$

210,083

 

Restricted cash

 

 

3,378

 

 

 

3,416

 

Total cash, cash equivalents and restricted cash

 

$

125,398

 

 

$

213,499

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

 

 

7


 

VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

Supplemental cash flow information:

 

 

 

 

 

 

Interest paid

 

$

39,009

 

 

$

43,960

 

Income taxes paid, net of refunds

 

 

27,199

 

 

 

22,904

 

Supplemental non-cash investing and financing activities:

 

 

 

 

 

 

Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at period-end

 

 

7,864

 

 

 

4,374

 

Accrued excise tax payable on net share repurchases

 

 

350

 

 

 

 

Earn-out shares issued to PE Greenlight Holdings, LLC

 

 

 

 

 

18,288

 

Proceeds receivable from the exercise of warrants at period-end

 

 

 

 

 

52,747

 

Increase in additional paid-in capital due to exercise of private placement warrants

 

 

 

 

 

44,155

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

8


 

VERRA MOBILITY CORPORATION

Notes to the CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1. Description of Business

Verra Mobility Corporation (collectively with its subsidiaries, the “Company” or “Verra Mobility”) offers integrated technology solutions and services to its customers who are located throughout the world, primarily within the United States, Australia, Canada and Europe. The Company is organized into three operating segments: Commercial Services, Government Solutions and Parking Solutions (see Note 14, Segment Reporting).

The Commercial Services segment offers automated toll and violations management and title and registration solutions to rental car companies (“RACs”), direct commercial fleet owner-operators (“Direct Fleets”) and fleet management companies (“FMCs”) and other large fleet owners in North America. Through its established relationships with individual tolling authorities throughout the United States, the segment provides an automated and outsourced administrative solution for its customers while also providing a value-added convenience for vehicle drivers and benefits to tolling and issuing authorities. The toll and violations management solutions help ensure timely payment of tolls and violations incurred by the customers’ vehicles and perform timely transfers of liability on the customers’ behalf, and driver billing and collections, as applicable. It also manages regional toll transponder installation and vehicle association—a critical and highly complex process for RAC, Direct Fleet and FMC customers—to ensure that the transponders (and corresponding toll transactions) are associated with the correct vehicle. In Europe, the Commercial Services segment provides violations processing through Euro Parking Collection plc and consumer tolling services through Pagatelia S.L.U.

The Government Solutions segment offers photo enforcement solutions and services to its customers which include complete, end-to-end speed, red-light, school bus stop arm and bus lane enforcement solutions. These programs are designed to reduce traffic violations and resulting collisions, injuries and fatalities. The Company implements and administers traffic safety programs for municipalities, counties, school districts and law enforcement agencies of all sizes. The international operations for this segment primarily involve the sale of traffic enforcement products and recurring maintenance services related to the equipment and software.

The Parking Solutions segment offers an integrated suite of parking software, transaction processing and hardware solutions to its customers, which include universities, municipalities, healthcare facilities and commercial parking operators. This segment develops specialized hardware and parking management software that provides a platform for the issuance of parking permits, enforcement, gateless vehicle counting, event parking and citation services. It also produces and markets its proprietary software as a service to its customers throughout the United States and Canada.

2. Significant Accounting Policies

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.

Use of Estimates

The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. There have been no material changes in the Company's significant accounting policies from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023.

9


 

Management believes that its estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.

Concentration of Credit Risk

Significant customers are those which represent more than 10% of the Company’s total revenue or accounts receivable, net. Revenue from the single Government Solutions customer exceeding 10% of total revenue is presented below:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

City of New York Department of Transportation

 

 

15.6

%

 

 

16.9

%

 

 

16.1

%

 

 

17.4

%

 

The City of New York Department of Transportation (“NYCDOT”) represented 12% and 18% of total accounts receivable, net as of June 30, 2024 and December 31, 2023, respectively. There is no material reserve related to NYCDOT open receivables as amounts are deemed collectible based on current conditions and expectations. No other Government Solutions customer exceeded 10% of total accounts receivable, net as of any period presented.

Significant customer revenues generated through the Company’s Commercial Services partners as a percent of total revenue are presented below:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Hertz Corporation

 

 

10.6