UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 18, 2019
VERRA MOBILITY CORPORATION
(Exact name of registrant as specified in its charter)
|
Delaware |
1-37979 |
81-3563824 |
|
(State or other jurisdiction |
(Commission |
(IRS Employer |
|
1150 N. Alma School Road |
85201 |
(480) 443-7000
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
☒ 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.
Item 2.02 Results of Operations and Financial Condition.
On March 18, 2019, Verra Mobility Corporation (the “Company”) issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2018. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 2.02 and Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
The Company will host a conference call and live webcast to discuss its 2018 financial results on March 19, 2019, at 8 a.m. Eastern time. On March 18, 2019, the Company disseminated an investor presentation to be used in connection with the earnings call. A copy of the investor presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
The information furnished in this Item 7.01, and Exhibit 99.2 attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such filing.
The Company expressly disclaims any obligation to update or revise any of the information contained in the investor presentation.
The investor presentation is available on the Company’s investor relations website located at ir.verramobility.com, although the Company reserves the right to discontinue that availability at any time.
Item 9.01 Financial Statements and Exhibits.
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Exhibit Number |
|
Description of Exhibits |
|
|
|
|
|
|
|
99.1 |
|
Press Release, dated March 18, 2019, issued by Verra Mobility Corporation. |
|
|
99.2 |
|
Investor Presentation, dated March 18, 2019, given by Verra Mobility Corporation. |
|
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
Dated: March 18, 2019 |
Verra Mobility Corporation |
|
|
|
|
|
|
|
By: |
/s/ Patricia Chiodo |
|
|
Name: |
Patricia Chiodo |
|
|
Title: |
Chief Financial Officer |
3
Ex. 99.1
Verra Mobility Announces Fourth Quarter and Full Year 2018 Financial Results
MESA, Arizona – March 18, 2019 – Verra Mobility Corporation (NASDAQ: VRRM) (the “Company” or “Verra Mobility”) a leading provider of smart mobility technology solutions, today announced financial results for the fourth quarter and full year ended December 31, 2018.
Total revenue for the fourth quarter increased to $95.1 million compared to $63.2 million for fourth quarter of 2017. Total revenue for the full year 2018 increased to $370.1 million compared to $232.1 million for full year 2017.
“We are pleased with our execution during the fourth quarter and fiscal year 2018; this was an outstanding and transformative year for the Company. We closed two highly strategic acquisitions and became a publicly traded company through the SPAC transaction with Gores Holdings II,” said David Roberts, Chief Executive Officer of Verra Mobility. “I could not be prouder of the team and the hard work that was accomplished to make this transformation seamless.”
The Company reports its results of operations based on two operating segments: Commercial Services and Government Solutions. Commercial Services delivers market-leading automated toll and violations management and title and registration solutions to rental car companies, fleet management companies and other large fleet owners. Government Solutions delivers market-leading automated safety solutions to municipalities and school districts, including services and technology that enable photo enforcement via road safety camera programs related to red light, speed, school bus, and city bus lanes.
Fourth Quarter 2018 Financial Highlights
|
|
• |
Revenues of $95.1 million |
|
|
• |
Net loss of $38.0 million |
|
|
• |
Adjusted EBITDA of $47.3 million, representing 49.7% of total revenue |
|
|
• |
Commercial Services segment generated total revenue of $58.4 million and segment profit of $33.2 million |
|
|
• |
Government Solutions segment generated total revenue of $36.7 million and segment profit of $13.1 million |
|
|
• |
Cash flow used in consolidated operations was $94,000 |
The Company recorded certain out-of-period adjustments which reduced revenue in the fourth quarter of 2018, in the aggregate amount of $4.2 million pertaining to prior 2018 quarters. These adjustments, had they been recorded in the period they originated, would have decreased revenue, as a percentage of quarterly revenue, as follows: Q1: -1.4%, Q2: -0.9%, Q3: -2.2% and
Q4: +4.4%. The overall impact of these adjustments are immaterial to the Company’s consolidated financial statements.
Full Year 2018 Financial Highlights
|
|
• |
Revenues of $370.1 million |
|
|
• |
Net Loss of $58.4 million |
|
|
• |
Adjusted EBITDA of $197.6 million, representing 53.4% of total revenue |
|
|
• |
Commercial Services segment generated total revenue of $222.6 million and segment profit of $121.6 million |
|
|
• |
Government Solutions segment generated total revenue of $147.5 million and segment profit of $56.1 million |
|
|
• |
Cash flow from operations was $46.0 million |
Quarterly Conference Call
Verra Mobility will host a conference call and live webcast to discuss financial results for investors and analysts at 5:00 a.m. Pacific Time (8:00 a.m. Eastern Time) on March 19, 2019. To access the conference call, dial (800) 263-0877 for the U.S. or Canada or (646) 828-8143 with conference ID # 3538970. The webcast will be available live on the Investors section of the company website at www.verramobility.com. An audio replay of the call will also be available to investors by phone beginning at approximately 8:00 a.m. Pacific Time on March 19, 2019, until 8:59 p.m. Pacific Time on April 2, 2019, by dialing (844) 512-2921 for the U.S. or Canada or (412) 317-6671 for international callers, and entering passcode #3538970. In addition, an archived webcast will be available on the Investors section of the company website at www.verramobility.com.
Forward-Looking Statements
This press release contains forward-looking statements which address The Company’s expected future business and financial performance, and often contain words such as “goal,” “target,” “future,” “estimate,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “project,” “may,” “should,” or “will” and similar expressions. Examples of forward-looking statements include, among others, statements regarding the benefits of the Company’s strategic acquisitions; changes in the market for our products and services; expected operating results, such as revenue growth; expansion plans and opportunities; and earnings guidance related to 2018 financial and operational metrics. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Risks and uncertainties that may affect future results include those that are described from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”), which are available on the Company’s Investor Relations website, http://ir.verramobility.com, and on the SEC website, www.sec.gov. These forward-looking statements represent the judgment of the Company, as of the date of this release, and Verra Mobility disclaims any intent or obligation to update forward-looking statements. This press release should be read in conjunction with the information included in the Company’s other press releases, reports and other filings with the SEC. Understanding the information contained in these filings is important in order to fully understand the Company’s reported financial results and our business outlook for future periods.
Non-GAAP Financial Information
In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also discloses certain non-GAAP financial information in this press release. These financial measures are not recognized measures under GAAP and they are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. EBITDA, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures as defined by SEC rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements have been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.
About Verra Mobility
Verra Mobility is committed to developing and using the latest in technology and data intelligence to help make transportation safer and easier. As a global company, Verra Mobility sits at the center of the mobility ecosystem – one that brings together vehicles, devices, information, and people to solve the most complex challenges faced by our customers and the constituencies they serve.
Verra Mobility serves the world's largest commercial fleets and rental car companies to manage tolling transactions and violations for millions of vehicles. A leading provider of connected systems, Verra Mobility processes millions of transactions each year through connectivity with more than 50 individual tolling authorities and more than 400 issuing authorities. Verra Mobility also fosters the development of safe cities, partnering with law enforcement agencies, transportation departments and school districts across North America operating thousands of red-light, speed, bus lane and school bus stop arm safety cameras. For more information, visit www.verramobility.com.
Investor Contact
Marc P. Griffin
ICR, Inc., for Verra Mobility
646-277-1290
IR@verramobility.com
VERRA MOBILITY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
||
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
65,048,194 |
|
|
$ |
8,724,945 |
|
|
Restricted cash |
|
|
2,033,186 |
|
|
|
1,784,665 |
|
|
Accounts receivable, net |
|
|
87,510,691 |
|
|
|
60,180,536 |
|
|
Unbilled receivables |
|
|
12,955,507 |
|
|
|
4,802,074 |
|
|
Prepaid expenses and other current assets |
|
|
17,600,270 |
|
|
|
15,788,912 |
|
|
Total current assets |
|
|
185,147,848 |
|
|
|
91,281,132 |
|
|
|
|
|
|
|
|
|
|
|
|
Installation and service parts, net |
|
|
9,282,064 |
|
|
|
9,066,913 |
|
|
Property and equipment, net |
|
|
69,242,811 |
|
|
|
65,370,696 |
|
|
Intangible assets, net |
|
|
514,541,531 |
|
|
|
203,749,221 |
|
|
Goodwill |
|
|
564,723,498 |
|
|
|
294,414,522 |
|
|
Other non-current assets |
|
|
1,845,443 |
|
|
|
982,731 |
|
|
Total assets |
|
$ |
1,344,783,195 |
|
|
$ |
664,865,215 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
45,188,357 |
|
|
$ |
20,158,977 |
|
|
Accrued liabilities |
|
|
14,443,967 |
|
|
|
10,086,622 |
|
|
Current portion of long-term debt |
|
|
9,103,518 |
|
|
|
3,250,000 |
|
|
Total current liabilities |
|
|
68,735,842 |
|
|
|
33,495,599 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net of current portion and deferred financing costs |
|
|
860,249,164 |
|
|
|
425,439,034 |
|
|
Other long-term liabilities |
|
|
3,368,710 |
|
|
|
2,689,145 |
|
|
Payable related to tax receivable agreement |
|
|
69,996,334 |
|
|
|
|
|
|
Asset retirement obligation |
|
|
6,749,822 |
|
|
|
6,373,125 |
|
|
Deferred tax liabilities |
|
|
33,627,191 |
|
|
|
49,603,691 |
|
|
Total Liabilities |
|
|
1,042,727,063 |
|
|
|
517,600,594 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
Preferred stock, $.0001 par value, 1,000,000 shares authorized with no shares issued and outstanding as of December 31, 2018 and 2017 |
|
|
— |
|
|
|
— |
|
|
Common stock, $.0001 par value, 260,000,000 shares authorized with 156,056,642 and 60,483,804 shares issued and outstanding as of December 31, 2018 and 2017, respectively |
|
|
15,606 |
|
|
|
6,048 |
|
|
Common stock contingent consideration |
|
|
73,150,000 |
|
|
|
— |
|
|
Additional paid-in capital |
|
|
348,017,132 |
|
|
|
129,020,351 |
|
|
Retained earnings (accumulated deficit) |
|
|
(113,306,294 |
) |
|
|
18,238,222 |
|
|
Accumulated other comprehensive loss |
|
|
(5,820,312 |
) |
|
|
— |
|
|
Total stockholders' equity |
|
|
302,056,132 |
|
|
|
147,264,621 |
|
|
Total liabilities and stockholders' equity |
|
$ |
1,344,783,195 |
|
|
$ |
664,865,215 |
|
VERRA MOBILITY CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
Three months ended |
|
|||||
|
|
|
December 31, |
|
|
December 31, |
|
||
|
Unaudited |
|
2018 |
|
|
2017 |
|
||
|
Service revenue |
|
$ |
93,822,287 |
|
|
$ |
61,268,951 |
|
|
Product sales |
|
|
1,283,125 |
|
|
|
1,895,085 |
|
|
Total revenue |
|
|
95,105,412 |
|
|
|
63,164,036 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service revenue |
|
|
1,570,255 |
|
|
|
812,854 |
|
|
Cost of product sales |
|
|
1,021,797 |
|
|
|
1,118,821 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
28,582,987 |
|
|
|
21,703,161 |
|
|
Selling, general and administrative expenses |
|
|
53,517,772 |
|
|
|
14,832,998 |
|
|
Depreciation, amortization, impairment, and (gain) loss on disposal of assets, net |
|
|
28,523,027 |
|
|
|
13,868,581 |
|
|
Total costs and expenses |
|
|
113,215,838 |
|
|
|
52,336,415 |
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
(18,110,426 |
) |
|
|
10,827,621 |
) |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
17,011,457 |
|
|
|
9,022,518 |
|
|
Loss on extinguishment of debt |
|
|
16,335,105 |
|
|
|
— |
|
|
Other income (expense), net |
|
|
(1,793,712 |
) |
|
|
(837,012 |
) |
|
Total other expense |
|
|
31,552,850 |
|
|
|
8,185,506 |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
|
(49,663,276 |
) |
|
|
2,642,115 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income tax provision (benefit) |
|
|
(11,708,873 |
) |
|
|
(26,539,460 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
$ (37,954,403 |
) |
|
|
$ (29,181,575 |
) |
VERRA MOBILITY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
|
|
|
Successor |
|
|
|
Predecessor |
|
||||||||||
|
|
|
|
|
|
|
Period from |
|
|
|
Period From |
|
|
|
|
|
||
|
|
|
Year Ended |
|
|
June 1, 2017 to |
|
|
|
January 1, 2017 to |
|
|
Year Ended |
|
||||
|
|
|
December 31, |
|
|
December 31, |
|
|
|
May 31, |
|
|
December 31, |
|
||||
|
|
|
2018 |
|
|
2017 |
|
|
|
2017 |
|
|
2016 |
|
||||
|
Service revenue |
|
$ |
365,075,935 |
|
|
$ |
135,655,277 |
|
|
|
$ |
92,530,939 |
|
|
$ |
212,514,712 |
|
|
Product sales |
|
|
5,069,785 |
|
|
|
2,583,410 |
|
|
|
|
1,340,191 |
|
|
|
18,234,874 |
|
|
Total revenue |
|
|
370,145,720 |
|
|
|
138,238,687 |
|
|
|
|
93,871,130 |
|
|
|
230,749,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service revenue |
|
|
5,787,699 |
|
|
|
1,936,063 |
|
|
|
|
1,369,445 |
|
|
|
2,638,070 |
|
|
Cost of product sales |
|
|
3,446,929 |
|
|
|
1,590,018 |
|
|
|
|
963,504 |
|
|
|
9,505,473 |
|
|
Operating expenses |
|
|
108,883,622 |
|
|
|
50,471,055 |
|
|
|
|
35,967,664 |
|
|
|
83,762,399 |
|
|
Selling , general and administrative expenses |
|
|
136,068,633 |
|
|
|
44,882,140 |
|
|
|
|
40,884,179 |
|
|
|
53,033,871 |
|
|
Depreciation, amortization, impairment and (gain) loss on disposal of assets, net |
|
|
103,352,668 |
|
|
|
33,112,553 |
|
|
|
|
12,613,143 |
|
|
|
33,916,936 |
|
|
Total costs and expenses |
|
|
357,539,551 |
|
|
|
131,991,829 |
|
|
|
|
91,797,935 |
|
|
|
182,856,749 |
|
|
Income from operations |
|
|
12,606,169 |
|
|
|
6,246,858 |
|
|
|
|
2,073,195 |
|
|
|
47,892,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
69,550,214 |
|
|
|
20,857,920 |
|
|
|
|
875,102 |
|
|
|
2,706,499 |
|
|
Loss on extinguishment of debt |
|
|
26,486,179 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Other income, net |
|
|
(8,794,596 |
) |
|
|
(2,172,261 |
) |
|
|
|
(1,294,299 |
) |
|
|
(2,470,776 |
) |
|
Total other expense (income) |
|
|
87,241,797 |
|
|
|
18,685,659 |
|
|
|
|
(419,197 |
) |
|
|
235,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income tax (benefit) provision |
|
|
(74,635,628 |
) |
|
|
(12,438,801 |
) |
|
|
|
2,492,392 |
|
|
|
47,657,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) provision |
|
|
(16,241,112 |
) |
|
|
(30,677,023 |
) |
|
|
|
1,252,793 |
|
|
|
18,661,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(58,394,516 |
) |
|
$ |
18,238,222 |
|
|
|
$ |
1,239,599 |
|
|
$ |
28,996,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(5,820,312 |
) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Change in interest rate swap valuation, net of taxes |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
50,255 |
|
|
Total comprehensive (loss) income |
|
$ |
(64,214,828 |
) |
|
$ |
18,238,222 |
|
|
|
$ |
1,239,599 |
|
|
$ |
29,046,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
|
87,320,072 |
|
|
|
60,483,804 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
|
$ |
(0.67 |
) |
|
$ |
0.30 |
|
|
|
(1) |
|
|
(1) |
|
||
|
Diluted weighted average shares outstanding |
|
|
87,320,072 |
|
|
|
60,483,804 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share |
|
$ |
(0.67 |
) |
|
$ |
0.30 |
|
|
|
(1) |
|
|
(1) |
|
||
|
|
(1) |
Basis and diluted earnings (loss) per share for the Predecessor Period are not presented due to lack of comparability with the Successor Period. |
VERRA MOBILITY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Successor |
|
|
|
Predecessor |
|
||||||||||
|
|
|
|
|
|
|
Period from |
|
|
|
Period From |
|
|
|
|
|
||
|
|
|
Year Ended |
|
|
June 1, 2017 to |
|
|
|
January 1, 2017 to |
|
|
Year Ended |
|
||||
|
|
|
December 31, |
|
|
December 31, |
|
|
|
May 31, |
|
|
December 31, |
|
||||
|
|
|
2018 |
|
|
2017 |
|
|
|
2017 |
|
|
2016 |
|
||||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(58,394,516 |
) |
|
$ |
18,238,222 |
|
|
|
$ |
1,239,599 |
|
|
$ |
28,996,084 |
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
103,346,438 |
|
|
|
33,151,063 |
|
|
|
|
12,574,006 |
|
|
|
33,814,562 |
|
|
Loss on extinguishment of debt |
|
|
26,486,179 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Deferred financing cost amortization |
|
|
9,167,979 |
|
|
|
1,981,476 |
|
|
|
|
143,241 |
|
|
|
475,596 |
|
|
Accretion expense |
|
|
396,374 |
|
|
|
153,542 |
|
|
|
|
106,404 |
|
|
|
185,021 |
|
|
Write-downs of installation and service parts and (gain) loss on disposal of assets |
|
|
6,230 |
|
|
|
(38,510 |
) |
|
|
|
39,137 |
|
|
|
102,374 |
|
|
Installation and service parts expense |
|
|
1,238,512 |
|
|
|
565,198 |
|
|
|
|
177,124 |
|
|
|
1,382,686 |
|
|
Bad debt expense |
|
|
6,024,939 |
|
|
|
3,441,004 |
|
|
|
|
2,181,957 |
|
|
|
7,881,872 |
|
|
Deferred income taxes |
|
|
(24,434,693 |
) |
|
|
(31,083,621 |
) |
|
|
|
(3,326,978 |
) |
|
|
(3,204,635 |
) |
|
Stock-based compensation |
|
|
2,271,874 |
|
|
|
— |
|
|
|
|
— |
|
|
|
(618,911 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(23,721,307 |
) |
|
|
(17,152,616 |
) |
|
|
|
6,107,664 |
|
|
|
(17,409,068 |
) |
|
Unbilled receivables |
|
|
(6,123,612 |
) |
|
|
(362,336 |
) |
|
|
|
1,945,493 |
|
|
|
(2,655,961 |
) |
|
Prepaid expense and other current assets |
|
|
2,959,758 |
|
|
|
4,202,237 |
|
|
|
|
(1,581,750 |
) |
|
|
(2,584,650 |
) |
|
Other assets |
|
|
(845,281 |
) |
|
|
139,856 |
|
|
|
|
322,260 |
|
|
|
294,181 |
|
|
Accounts payable and accrued liabilities |
|
|
7,125,305 |
|
|
|
(4,846,446 |
) |
|
|
|
22,413,747 |
|
|
|
(703,321 |
) |
|
Other Liabilities |
|
|
512,648 |
|
|
|
(77,736 |
) |
|
|
|
(508,181 |
) |
|
|
(2,114,649 |
) |
|
Net cash provided by operating activities |
|
|
46,016,827 |
|
|
|
8,311,333 |
|
|
|
|
41,833,723 |
|
|
|
43,841,181 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of business, net of cash and restricted cash acquired |
|
|
(536,698,777 |
) |
|
|
(537,853,861 |
) |
|
|
|
— |
|
|
|
(21,232,989 |
) |
|
Purchases of installation and service parts and property and equipment |
|
|
(26,576,364 |
) |
|
|
(15,873,607 |
) |
|
|
|
(8,952,667 |
) |
|
|
(14,825,371 |
) |
|
Cash proceeds from the sale of assets and insurance recoveries |
|
|
418,238 |
|
|
|
191,788 |
|
|
|
|
166,603 |
|
|
|
1,007,478 |
|
|
Net cash provided by (used in) investing activities |
|
|
(562,856,903 |
) |
|
|
(553,535,680 |
) |
|
|
|
(8,786,064 |
) |
|
|
(35,050,882 |
) |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor borrowings on revolver |
|
|
468,306 |
|
|
|
18,530,956 |
|
|
|
|
— |
|
|
|
— |
|
|
Successor repayment on revolver |
|
|
(468,306 |
) |
|
|
(18,530,956 |
) |
|
|
|
— |
|
|
|
— |
|
|
Successor borrowings of long-term debt |
|
|
1,103,800,000 |
|
|
|
444,250,000 |
|
|
|
|
— |
|
|
|
— |
|
|
Successor repayment of long-term debt |
|
|
(654,850,879 |
) |
|
|
(1,625,000 |
) |
|
|
|
— |
|
|
|
— |
|
|
Successor payment of debt issuance costs |
|
|
(31,752,670 |
) |
|
|
(15,917,442 |
) |
|
|
|
— |
|
|
|
— |
|
|
Payment of debt extinguishment costs |
|
|
(12,186,961 |
) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Capitalization from Merger with Gores Holdings II |
|
|
803,293,629 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Payment of underwriting and transaction costs |
|
|
(24,023,524 |
) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Predecessor borrowings on note payable |
|
|
— |
|
|
|
— |
|
|
|
|
40,752,179 |
|
|
|
187,920,609 |
|
|
Predecessor repayments on note payable |
|
|
— |
|
|
|
— |
|
|
|
|
(68,213,359 |
) |
|
|
(147,521,410 |
) |
|
Predecessor payments of debt issue costs |
|
|
— |
|
|
|
— |
|
|
|
|
(30,000 |
) |
|
|
(332,500 |
) |
|
Capital contribution from Greenlight |
|
|
169,258,843 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Successor distribution to selling shareholders |
|
|
(779,270,105 |
) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Proceeds from issuance of common stock |
|
|
— |
|
|
|
129,026,399 |
|
|
|
|
— |
|
|
|
— |
|
|
Payment of cash dividend |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
(47,107,808 |
) |
|
Net cash provided by (used in) by financing activities |
|
|
574,268,333 |
|
|
|
555,733,957 |
|
|
|
|
(27,491,180 |
) |
|
|
(7,041,109 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(856,487 |
) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash, cash equivalents and restricted cash |
|
|
56,571,770 |
|
|
|
10,509,610 |
|
|
|
|
5,556,479 |
|
|
|
1,749,190 |
|
|
Cash, cash equivalents and restricted cash - beginning of period |
|
|
10,509,610 |
|
|
|
— |
|
|
|
|
4,345,567 |
|
|
|
2,596,377 |
|
|
Cash, cash equivalents and restricted cash - end of period |
|
$ |
67,081,380 |
|
|
$ |
10,509,610 |
|
|
|
$ |
9,902,046 |
|
|
$ |
4,345,567 |
|
VERRA MOBILITY CORPORATION AND SUBSIDIARIES
ADJUSTED EBITDA RECONCILIATION
|
|
Successor |
|
|
|
Successor |
|
|
|
Successor |
|
|
|
Successor |
|
|
|
Predecessor |
|
|||||||||
|
|
For the Three Months Ended December 31, |
|
|
|
For the Three Months Ended December 31, |
|
|
|
For the Year Ended December 31, |
|
|
|
Period from June 1, 2017 to December 31, |
|
|
|
Period from January 1, 2017 to May 31, |
|
|
For the Year Ended December 31, |
|
||||||
|
($ in thousands) |
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2017 |
|
|
2016 |
|
||||||
|
Net income (loss) |
$ |
(37,954 |
) |
|
|
$ |
29,182 |
|
|
|
$ |
(58,395 |
) |
|
|
$ |
18,238 |
|
|
|
$ |
1,240 |
|
|
$ |
28,996 |
|
|
Interest expense |
|
17,011 |
|
|
|
|
9,023 |
|
|
|
|
69,550 |
|
|
|
|
20,858 |
|
|
|
|
875 |
|
|
|
2,706 |
|
|
Income tax provision expense (benefit) |
|
(11,709 |
) |
|
|
|
(26,539 |
) |
|
|
|
(16,241 |
) |
|
|
|
(30,677 |
) |
|
|
|
1,253 |
|
|
|
18,661 |
|
|
Depreciation and amortization |
|
28,508 |
|
|
|
|
13,895 |
|
|
|
|
103,346 |
|
|
|
|
33,151 |
|
|
|
|
12,574 |
|
|
|
33,815 |
|
|
EBITDA |
|
(4,144 |
) |
|
|
|
25,559 |
|
|
|
|
98,260 |
|
|
|
|
41,570 |
|
|
|
|
15,942 |
|
|
|
84,178 |
|
|
Transaction and other related expenses (i) |
|
30,855 |
|
|
|
|
135 |
|
|
|
|
56,443 |
|
|
|
|
10,190 |
|
|
|
|
21,772 |
|
|
|
1,154 |
|
|
Transformation expenses (ii) |
|
727 |
|
|
|
|
1,451 |
|
|
|
|
8,766 |
|
|
|
|
3,913 |
|
|
|
|
— |
|
|
|
— |
|
|
Loss on extinguishment of debt (iii) |
|
16,335 |
|
|
|
|
— |
|
|
|
|
26,486 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Sponsor Fees and expenses (iv) |
|
1,250 |
|
|
|
|
1,804 |
|
|
|
|
5,383 |
|
|
|
|
4,228 |
|
|
|
|
— |
|
|
|
— |
|
|
Non-cash amortization of contract inducement (v) |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
277 |
|
|
|
1,784 |
|
|
Stock-based compensation (vi) |
|
2,272 |
|
|
|
|
— |
|
|
|
|
2,272 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Adjusted EBITDA |
$ |
47,295 |
|
|
|
$ |
28,950 |
|
|
|
$ |
197,610 |
|
|
|
$ |
59,901 |
|
|
|
$ |
37,991 |
|
|
$ |
87,116 |
|
|
|
(i) |
Adjustments to add back deal fees incurred in relation to the ATS Merger (as defined below), Verra Mobility’s acquisition of Highway Toll Administration, LLC and Euro Parking Collection plc in March and April 2018, respectively and the Business Combination with Gores Holdings II, Inc. in October 2018. Consists primarily of acquisition services to advisors, professional fees and other expenses. |
|
|
(ii) |
One-time costs including costs of strategy consultants, procurement optimization and IT optimization |
|
|
(iii) |
Costs incurred to refinance the Company’s credit facility and term loans. Includes prepayment penalties, the write-off of deferred financing costs, lender fees and third-party costs to issue the new debt. |
|
|
(iv) |
Sponsor management fees paid to Platinum Equity. |
|
|
(v) |
Adjustments for amortization of a tolling contract with a major RAC. |
|
|
(vi) |
Non-cash stock based compensation. |
Basis of Presentation
On May 31, 2017, the Company was acquired by Greenlight Acquisition Corporation (“Acquirer”) pursuant to the Agreement and Plan of Merger, dated April 15, 2017 by and among the Company, Greenlight Merger Corporation, a wholly-owned subsidiary of Acquirer, (“Merger Sub”) and Acquirer whereby the Company merged with and into Merger Sub with the former surviving (the “ATS Merger”). Acquirer is ultimately owned by certain private equity investment vehicles sponsored by Platinum Equity, LLC.
Pursuant to the ATS Merger, a new basis of accounting at fair value was established in accordance with U.S. GAAP under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. The new stepped-up basis was pushed down by Acquirer to the Company. The consolidated financial statements and footnotes contained herein are presented in distinct periods to indicate the application of two different bases of accounting between the periods presented. The period from January 1, 2017 to May 31, 2017 has been labeled “Predecessor” and has been prepared using the historical basis of accounting of the Predecessor. The periods from June 1, 2017 to September 30, 2017 and from January 1, 2018 to September 30, 2018 have been labeled “Successor.” The accompanying condensed
consolidated statements of operations, cash flows and certain footnotes include a black line division separating the Predecessor Period from the Successor Period. As a result of purchase accounting, the pre-ATS Merger and post-ATS Merger condensed consolidated statements of operations and cash flows are not comparable.
Segment profit (loss) is based on revenues and income (loss) from operations before depreciation, amortization, impairment and gain (loss) on disposal of assets and after other income, net. Depreciation, amortization, impairment and gain (loss) on disposal of assets, interest expense, loss on extinguishment of debt and income taxes are not indicative of operating performance, and, as a result are not included in the operating and reportable segments. Other income, net consists primarily of credit card rebates earned on the prepayment of tolls and therefore included in Segment profit (loss). There are no significant non-cash items reported in Segment profit (loss).
EBITDA and adjusted EBITDA.
EBITDA is defined as net income, net of interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further excludes certain non-cash expenses, loss on extinguishment of debt and other transactions that management believes are not indicative of our business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies. EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA, respectively, divided by total revenues expressed as a percentage.
We present EBITDA and adjusted EBITDA because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and an overall evaluation of our financial condition. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows from operations, or other consolidated income or cash flow data prepared in accordance with GAAP.
Verra Mobility Q4 and Full Year Investor Presentation For the Quarter and the Full Year Ended December 31, 2018 Ex. 99.2
Forward-Looking Statements This presentation includes “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include projected financial information. Such forward-looking statements with respect to revenues, earnings, run rate synergies and cost items, performance, strategies, prospects and other aspects of the business of Verra Mobility Corporation and its subsidiaries (collectively, “Verra Mobility”) are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward looking statements. These factors include, but are not limited to: (1) the inability to launch new products or services or to profitably expand into new markets; (2) changes in applicable laws or regulations; (3) the possibility that Verra Mobility may be adversely affected by other economic, business or competitive factors; (4) the inability to recognize the anticipated benefits of the business combination with Gores Holdings, II, Inc.; and (5) other risks and uncertainties indicated from time to time in documents filed or to be filed with the Securities and Exchange Commission (the “SEC”) by Verra Mobility. You are cautioned not to place undue reliance upon any forward-looking statements, including the projections, which speak only as of the date made. Verra Mobility does not undertake any commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP Financial Information This presentation uses certain non-GAAP financial information, including earnings before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA, which further excludes certain non-cash expenses, loss on extinguishment of debt and other transactions management believes are not indicative of Verra Mobility’s business. Verra Mobility believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Verra Mobility’s financial condition and results of operations. These financial measures are not recognized measures under GAAP and they are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. EBITDA, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures as defined by SEC rules. This non-GAAP financial information may be determined or calculated differently by other companies. A reconciliation of Verra Mobility’s non-GAAP financial information to GAAP financial information is provided in the Appendix hereto and in Verra Mobility’s Form 8-K, filed with the SEC, with the earnings press release for the period indicated.
Consolidated Full Year Results For the Year Ended December 31, 2018 Pro Forma Adj. Revenue $ in Millions 11.5% YoY Growth Revenue by Segment Basis of Presentation: Verra Mobility made two acquisitions earlier in 2018; the data presented has been adjusted as if the acquisition were included in the results for all periods. The unadjusted and pro forma adjusted results of operations are included in the appendix to this presentation. All pro forma adjustments are in the commercial reporting segment. Run-Rate Synergies: Run-Rate Synergies reflect the impact of actions taken in 2018 in connection with our acquisitions that we expect to be realized in 2019. $219.5 Run-Rate Synergies Pro Forma Adj. EBITDA $ in Millions 19.5% YoY Growth
Consolidated Q4 Results For the quarter ended December 31, 2018 Pro Forma Adj. Revenue and YoY Growth $ in Millions Pro Forma Adj. EBITDA and Margin $ in Millions Net Debt and Leverage $ in Millions Q4 Revenue by Segment Commercial Services Government Solutions Basis of Presentation: Verra Mobility made two acquisitions earlier in 2018; the data presented has been adjusted as if the acquisitions were included in the results for all periods. The unadjusted and pro forma adjusted results of operations are included in the appendix to this presentation. All pro forma adjustments are in the Commercial Services segment. Leverage calculated as net debt divided by TTM Pro Forma Adjusted EBITDA for each period, Q4 includes $10M of run-rate synergies Revenue of $95.1M in the fourth quarter increased 1% from the same quarter in the prior year. The company recorded $4.2M of out-of-period adjustments to revenue in Q4. The impact as a percentage of revenue on Q1 (1.4%), Q2 (0.9%), Q3 (2.2%) and Q4 +4.4% is immaterial to our consolidated results. Q4 2018 EBITDA was negatively impacted by a $1.8M legal settlement Our cash position increased by $13M in the quarter to $65M Total Debt dropped from $1.04 Billion at the end of Q3 to $904 Million at the end of Q4. Commentary Q4 2019
Consolidated Q4 Results by segment For the quarter ended December 31, 2018 Pro Forma Adj. Revenue and YoY Growth $ in Millions Adj. EBITDA and Margin $ in Millions Commercial Services Government Solutions Revenue and YoY Growth $ in Millions Adj. EBITDA and Margin $ in Millions Commercial Services Commentary Revenue of $58.4M in Q4 increased 3.7% from the same quarter in the prior year The company recorded $4.2M of out-of-period adjustments to revenue in Q4 impacting Commercial Services revenue. Q4 2018 EBITDA was negatively impacted by a $1.8M legal settlement Full year 2018 pro forma adj. revenue of $241.4M grew $33.4M or 16% from $208.0M for the full year 2017 Full year 2018 pro forma adj. EBITDA of $153.2M grew $25.4M or $19.9% from $127.8M for the full year 2017 Government Solutions Commentary Revenue of $36.7M in Q4 decreased by $1.2M or 3.3% from the same quarter in the prior year. The decrease in revenue was primarily driven by declines in red light due to the loss of Miami earlier in 2018, offset by growth in speed products and lower product sales, which are sporadic in nature. Full year 2018 revenue of $147.5M grew $6.8M or 4.8% from $140.7M for full year 2017 Full year 2018 Adj. EBITDA of $56.1M remained flat compared to full year 2017 of $55.9M.
Consolidated Full Year 2019 Guidance For the Year Ended December 31, 2019 Full year 2019 revenue is expected to grow by 10% to 12% over full year 2018 We expect to generate 54% of our revenue in the second half of 2019 Two of our new offerings in the Commercial Services Segment, Peasy and expansion of RAC tolling in Europe, are expected to ramp up in 2019 contributing to the stronger second half Our Street Light Maintenance (SLM) contract within the Government Solutions business segment will end in April of 2019. We will not rebid on this contract to retain focus on offerings that are closer to our core. SLM generated ~$3M of revenue in 2018 We anticipate product sales to increase in 2019, these sales will be heavily weighted to the back half of the year and generally have lower margins than service revenue. Our investment in Peasy and our European expansion will continue in 2019. These costs along with the costs of becoming a public company will impact Adjusted EBITDA Margins in 2019 (1) Basis of Presentation: Verra Mobility made two acquisitions in 2018; the data presented has been adjusted as if the acquisitions were included in the results for all periods. The unadjusted and pro forma adjusted results of operations are included in the appendix to this presentation. All pro forma adjustments are in the Commercial Services segment. (2) Run-Rate Synergies: Adjusted EBITDA for 2018 includes $10 million of run-rate synergies which reflect the impact of actions taken in 2018 in connection with our acquisitions that we expect to be realized in 2019. Revenue Breakdown by Period
0. Appendix
Quarterly Results of Operations as Reported
Quarterly Pro Forma Results of Operations
Quarterly HTA Results of Operations
Quarterly EPC Results of Operations
Quarterly Segment Results of Operations Commercial Services Government Solutions