vrrm-8k_20191105.DOCX.htm

 

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): November 5, 2019

 

VERRA MOBILITY CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Delaware

1-37979

81-3563824

(State or other jurisdiction
of incorporation)

(Commission
File Number)

(IRS Employer
Identification No.)

 

1150 N. Alma School Road
Mesa, Arizona
(Address of principal executive offices)

85201
(Zip Code)

(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))

 

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 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 November 5, 2019, Verra Mobility Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2019.  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 third quarter 2019 financial results on November 5, 2019, at 8 a.m. Eastern time. On November 5, 2019, the Company disseminated an investor presentation to be used in connection with the earnings call. A copy of the earnings presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K and incorporated into this Item 7.01 by reference. Additionally, an investor presentation that will be used by the Company in presenting to certain existing and potential stockholders of the Company at upcoming investor conferences is attached as Exhibit 99.3 to this Current Report on Form 8-K and incorporated into this Item 7.01 by reference.

The information furnished in this Item 7.01 and Exhibits 99.2 and 99.3 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 presentations.

The presentations are 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.

 

(d)

Exhibits.

 

Exhibit Number

 

Description of Exhibits

 

 

 

 

 

99.1

 

Press Release, dated November 5, 2019, issued by Verra Mobility Corporation.

 

99.2

 

Q3 2019 Earnings Presentation, dated November 5, 2019, given by Verra Mobility Corporation.

 

99.3

 

Investor Presentation, dated November 5, 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:  November 5, 2019

Verra Mobility Corporation

 

 

 

 

By:

/s/ Patricia Chiodo

 

Name:

Patricia Chiodo

 

Title:

Chief Financial Officer

 

3

vrrm-ex991_6.htm

 Exhibit 99.1

 

 

Verra Mobility Announces Third Quarter 2019 Financial Results

 

Total revenue of $128.2 million

Net income of $17.8 million, Adjusted EBITDA of $70.8 million

Generated year-to-date cash flow from operations of $95.6 million

 

Mesa, AZ, November 5, 2019 – Verra Mobility (NASDAQ: VRRM), a leading provider of smart mobility technology solutions, announced today financial results for the quarter ended September 30, 2019.

 

“We are very pleased with the company’s performance in the third quarter, with financial results that exceeded expectations across the organization,” said David Roberts, Chief Executive Officer, Verra Mobility. “A year ago, Verra Mobility went public, and we’ve had a phenomenal first year. We grew our Commercial Services segment by growth in tolling usage while continuing our focus on European expansion and the Government Solutions segment by implementing smart city innovation initiatives like New York City’s school zone expansion. All these efforts are increasing the company’s value proposition to its customers.”

 

Third Quarter 2019 Financial Highlights

 

Revenue: Total revenue for the third quarter of 2019 was $128.2 million, up 19.2% compared to $107.6 million for the third quarter of 2018. Within total revenue, service revenue was $110.8 million and product revenue contributed $17.5 million.

 

Net income: Net income for the third quarter of 2019 was $17.8 million, or $0.11 per share, based on 163.7 million diluted weighted average shares outstanding. Net income for the comparable 2018 period was $6.5 million, or $0.09 per share, based on 72.9 million diluted weighted average shares outstanding.

 

Adjusted EBITDA: Adjusted EBITDA was $70.8 million for the third quarter of 2019, up 14.4% compared to $61.9 million in the third quarter of 2018.

 

Year-To-Date 2019 Financial Highlights

 

Revenue: Total revenue for year-to-date 2019 was $336.3 million, up 22.3% compared to $275.0 million for the year-to-date 2018 period. Within total revenue, service revenue was $311.9 million and product revenue was $24.4 million.

 

Net income (loss): Net income for year-to-date 2019 was $24.2 million, or $0.15 per share, based on 160.7 million diluted weighted average shares outstanding. During the year-to-date 2018 period, we had a net loss of $20.4 million, or $0.29 per share, based on 69.3 million weighted average shares outstanding.

 

Adjusted EBITDA: Adjusted EBITDA was $181.8 million for year-to-date 2019, up 20.9% compared to $150.3 million for year-to-date 2018.

 

1

 


The Company reports its results of operations based on two operating segments:

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 related to red-light, speed, school bus, and city bus lanes.  

 

Third Quarter 2019 Segment Detail

 

Commercial Services segment generated total revenue of $77.6 million growing 8% over the same period in 2018. Segment profit margins continue to be strong at 65.8% for 2019 and 68.7% for the 2018 period.

 

Government Solutions segment generated total revenue of $50.6 million growing 42% over the same period in 2018. The growth in this segment is driven by product sales in the current period which totaled $17.5 million. Segment profit was $19.8 million, a 58% increase from $12.5 million in the prior year. Segment margin was 39.1% in 2019 compared to 35.2% for the prior year period.

Quarterly Conference Call

Verra Mobility will host a conference call and a live webcast to discuss financial results for investors and analysts at 6:00 a.m. Mountain Time (8:00 a.m. Eastern Time) on November 5, 2019. To access the conference call, dial (877) 407-0784 for the United States or Canada and (201) 689-8560 for international callers with conference ID #13695024. The webcast will be available live in the “Investor Relations” section of the Company’s website at http://ir.verramobility.com. An audio replay of the call will also be available until 9:59 p.m. Mountain Time (11:59 p.m. Eastern Time) on November 19, 2019, by dialing (844) 512-2921 for the United States or Canada and (412) 317-6671 for international callers, and entering passcode #13695024. In addition, an archived webcast will be available in the “News & Events” section of the Investor Relations page of the Company’s website at http://ir.verramobility.com.

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 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. As 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. Arizona-based Verra Mobility operates in more than 15 countries. For more information, visit www.verramobility.com.

2

 


Forward-Looking Statements

This press release contains forward-looking statements which address the Company’s expected future business and financial performance, and may contain words such as “goal,” “target,” “future,” “estimate,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “project,” “may,” “should,” “will” or 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 2019 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 Measures

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 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, Adjusted EBITDA margin, Free Cash Flow, Adjusted Net Income and Adjusted EPS 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 reconciliations.

 

 


3

 


VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

($ in thousands except per share data)

 

September 30,

2019

 

 

December 31,

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

135,564

 

 

$

65,048

 

Restricted cash

 

 

2,156

 

 

 

2,033

 

Accounts receivable, net

 

 

108,682

 

 

 

87,511

 

Unbilled receivables

 

 

15,073

 

 

 

12,956

 

Prepaid expenses and other current assets

 

 

26,623

 

 

 

17,600

 

Total current assets

 

 

288,098

 

 

 

185,148

 

Installation and service parts, net

 

 

7,936

 

 

 

9,282

 

Property and equipment, net

 

 

69,481

 

 

 

69,243

 

Intangible assets, net

 

 

444,506

 

 

 

514,542

 

Goodwill

 

 

563,452

 

 

 

564,723

 

Other non-current assets

 

 

2,386

 

 

 

1,845

 

Total assets

 

$

1,375,859

 

 

$

1,344,783

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

57,194

 

 

$

45,188

 

Accrued liabilities

 

 

24,020

 

 

 

14,444

 

Current portion of long-term debt

 

 

9,104

 

 

 

9,104

 

Total current liabilities

 

 

90,318

 

 

 

68,736

 

Long-term debt, net of current portion and deferred financing costs

 

 

858,189

 

 

 

860,249

 

Other long-term liabilities

 

 

2,872

 

 

 

3,369

 

Payable related to tax receivable agreement

 

 

66,097

 

 

 

69,996

 

Asset retirement obligation

 

 

6,740

 

 

 

6,750

 

Deferred tax liabilities

 

 

24,052

 

 

 

33,627

 

Total liabilities

 

 

1,048,268

 

 

 

1,042,727

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Preferred stock, $.0001 par value

 

 

 

 

 

 

Common stock, $.0001 par value

 

 

16

 

 

 

16

 

Common stock contingent consideration

 

 

54,862

 

 

 

73,150

 

Additional paid-in capital

 

 

369,670

 

 

 

348,017

 

Accumulated deficit

 

 

(89,400

)

 

 

(113,306

)

Accumulated other comprehensive loss

 

 

(7,557

)

 

 

(5,821

)

Total stockholders' equity

 

 

327,591

 

 

 

302,056

 

Total liabilities and stockholders' equity

 

$

1,375,859

 

 

$

1,344,783

 

 


4

 


VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

(In thousands, except per share data)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Service revenue

 

$

110,757

 

 

$

105,203

 

 

$

311,884

 

 

$

271,253

 

Product sales

 

 

17,483

 

 

 

2,399

 

 

 

24,392

 

 

 

3,787

 

Total revenue

 

 

128,240

 

 

 

107,602

 

 

 

336,276

 

 

 

275,040

 

Cost of service revenue

 

 

1,388

 

 

 

1,735

 

 

 

4,390

 

 

 

4,217

 

Cost of product sales

 

 

7,238

 

 

 

1,375

 

 

 

10,432

 

 

 

2,425

 

Operating expenses

 

 

32,965

 

 

 

27,820

 

 

 

94,098

 

 

 

80,301

 

Selling, general and administrative expenses

 

 

21,293

 

 

 

21,687

 

 

 

62,709

 

 

 

82,551

 

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

 

 

28,697

 

 

 

28,790

 

 

 

86,488

 

 

 

74,830

 

Impairment of property and equipment

 

 

 

 

 

 

 

 

5,898

 

 

 

 

Total costs and expenses

 

 

91,581

 

 

 

81,407

 

 

 

264,015

 

 

 

244,324

 

Income from operations

 

 

36,659

 

 

 

26,195

 

 

 

72,261

 

 

 

30,716

 

Interest expense, net

 

 

14,932

 

 

 

20,312

 

 

 

46,621

 

 

 

52,538

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

10,151

 

Other income, net

 

 

(2,727

)

 

 

(2,942

)

 

 

(8,279

)

 

 

(7,001

)

Total other expenses

 

 

12,205

 

 

 

17,370

 

 

 

38,342

 

 

 

55,688

 

Income (loss) before income tax provision (benefit)

 

 

24,454

 

 

 

8,825

 

 

 

33,919

 

 

 

(24,972

)

Income tax provision (benefit)

 

 

6,702

 

 

 

2,312

 

 

 

9,756

 

 

 

(4,532

)

Net income (loss)

 

$

17,752

 

 

$

6,513

 

 

$

24,163

 

 

$

(20,440

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(1,664

)

 

 

(728

)

 

 

(1,736

)

 

 

(4,440

)

Total comprehensive income (loss)

 

$

16,088

 

 

$

5,785

 

 

$

22,427

 

 

$

(24,880

)

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

158,610

 

 

 

72,904

 

 

 

157,514

 

 

 

69,334

 

Basic earnings (loss) per share

 

$

0.11

 

 

$

0.09

 

 

$

0.15

 

 

$

(0.29

)

Diluted weighted average shares outstanding

 

 

163,705

 

 

 

72,904

 

 

 

160,723

 

 

 

69,334

 

Diluted earnings (loss) per share

 

$

0.11

 

 

$

0.09

 

 

$

0.15

 

 

$

(0.29

)

 


5

 


VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Nine Months Ended September 30,

 

($ in thousands)

 

2019

 

 

2018

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

24,163

 

 

$

(20,440

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

86,501

 

 

 

74,839

 

Amortization of deferred financing costs and discounts

 

 

5,066

 

 

 

6,933

 

Impairment of property and equipment

 

 

5,898

 

 

 

 

Bad debt expense

 

 

5,347

 

 

 

4,355

 

Deferred income taxes

 

 

(9,426

)

 

 

(16,514

)

Stock-based compensation

 

 

7,426

 

 

 

 

Loss on extinguishment of debt

 

 

 

 

 

10,151

 

Installation and service parts expense

 

 

1,055

 

 

 

432

 

Accretion expense

 

 

269

 

 

 

292

 

Write-downs of installation and service parts and (gain) on disposal of assets

 

 

(13

)

 

 

(9

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(26,353

)

 

 

(10,703

)

Unbilled receivables

 

 

(2,117

)

 

 

(7,744

)

Prepaid expenses and other current assets

 

 

(8,971

)

 

 

3,751

 

Other assets

 

 

(541

)

 

 

(1,305

)

Accounts payable and accrued liabilities

 

 

12,258

 

 

 

1,651

 

Other liabilities

 

 

(4,976

)

 

 

365

 

Net cash provided by operating activities

 

 

95,586

 

 

 

46,054

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Acquisition of businesses, net of cash and restricted cash acquired

 

 

 

 

 

(525,362

)

Purchases of installation and service parts and property and equipment

 

 

(17,492

)

 

 

(19,622

)

Cash proceeds from the sale of assets

 

 

14

 

 

 

5

 

Net cash used in investing activities

 

 

(17,478

)

 

 

(544,979

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Borrowings on revolver

 

 

 

 

 

468

 

Repayment on revolver

 

 

 

 

 

(468

)

Borrowings of long-term debt

 

 

 

 

 

1,033,800

 

Repayment of long-term debt

 

 

(6,827

)

 

 

(452,575

)

Payment of debt issuance costs

 

 

(299

)

 

 

(30,352

)

Payment of debt extinguishment costs

 

 

 

 

 

(8,187

)

Net cash (used in) provided by financing activities

 

 

(7,126

)

 

 

542,686

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(343

)

 

 

(594

)

Net increase in cash, cash equivalents and restricted cash

 

 

70,639

 

 

 

43,167

 

Cash, cash equivalents and restricted cash - beginning of period

 

 

67,081

 

 

 

10,509

 

Cash, cash equivalents and restricted cash - end of period

 

$

137,720

 

 

$

53,676

 

 


6

 


VERRA MOBILITY CORPORATION

QUARTERLY RESULTS AND ADJUSTED EBITDA RECONCILIATION

(Unaudited)

 

 

Q3 2018

 

 

Q3 2019

 

($ in thousands)

 

As Reported

 

 

As Reported

 

Service revenue

 

$

105,203

 

 

$

110,757

 

Product sales

 

 

2,399

 

 

 

17,483

 

Total revenue

 

 

107,602

 

 

 

128,240

 

Cost of service revenue

 

 

1,735

 

 

 

1,388

 

Cost of product sales

 

 

1,375

 

 

 

7,238

 

Operating expenses

 

 

27,820

 

 

 

32,965

 

Selling, general and administrative expenses

 

 

21,687

 

 

 

21,293

 

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

 

 

28,790

 

 

 

28,697

 

Total costs and expenses

 

 

81,407

 

 

 

91,581

 

Income from operations

 

 

26,195

 

 

 

36,659

 

Interest expense, net

 

 

20,312

 

 

 

14,932

 

Other income, net

 

 

(2,942

)

 

 

(2,727

)

Total other expenses

 

 

17,370

 

 

 

12,205

 

Income before income tax provision

 

 

8,825

 

 

 

24,454

 

Income tax provision

 

 

2,312

 

 

 

6,702

 

Net income

 

$

6,513

 

 

$

17,752

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Reconciliation

 

 

 

 

 

 

 

 

Net income

 

$

6,513

 

 

$

17,752

 

Interest expense, net

 

 

20,312

 

 

 

14,932

 

Income tax provision

 

 

2,312

 

 

 

6,702

 

Depreciation and amortization

 

 

28,792

 

 

 

28,697

 

EBITDA

 

 

57,929

 

 

 

68,083

 

Transaction and other related expenses (i)

 

 

1,669

 

 

 

287

 

Transformation expenses (ii)

 

 

905

 

 

 

 

Sponsor fees and expenses (iii)

 

 

1,433

 

 

 

 

Stock-based compensation (iv)

 

 

 

 

 

2,471

 

Adjusted EBITDA

 

$

61,936

 

 

$

70,841

 

Adjusted EBITDA Margin

 

 

57.6

%

 

 

55.2

%

 

 

(i)

In Q3 2018, costs incurred related to professional fees and other expenses. In Q3 2019, costs incurred related to transaction expenses.

 

(ii)

One-time costs related to optimizing the expense structure and defining our growth strategy.

 

(iii)

Sponsor management fees paid to Platinum Equity Advisors, LLC.

 

(iv)

Non-cash stock based compensation.

 

 


7

 


VERRA MOBILITY CORPORATION

CALCULATION OF PRO FORMA INFORMATION AND ADJUSTED EBITDA RECONCILIATION

(Unaudited)

 

 

Year-to-Date

 

 

 

 

 

 

 

 

 

Year-to-Date

 

 

Year-to-Date

 

 

 

Q3 2018

 

 

Pro Forma

 

 

Q3 2018

 

 

Q3 2019

 

($ in thousands)

 

As Reported

 

 

HTA

 

EPC

 

 

Consolidated

 

 

As Reported

 

Service revenue

 

$

271,253

 

 

$

15,828

 

$

2,954

 

 

$

290,035

 

 

$

311,884

 

Product sales

 

 

3,787

 

 

 

 

 

 

 

 

3,787

 

 

 

24,392

 

Total revenue

 

 

275,040

 

 

 

15,828

 

 

2,954

 

 

 

293,822

 

 

 

336,276

 

Cost of service revenue

 

 

4,217

 

 

 

 

 

361

 

 

 

4,578

 

 

 

4,390

 

Cost of product sales

 

 

2,425

 

 

 

 

 

 

 

 

2,425

 

 

 

10,432

 

Operating expenses

 

 

80,301

 

 

 

4,362

 

 

810

 

 

 

85,473

 

 

 

94,098

 

Selling, general and administrative expenses

 

 

82,551

 

 

 

12,270

 

 

610

 

 

 

95,431

 

 

 

62,709

 

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

 

 

74,830

 

 

 

398

 

 

27

 

 

 

75,255

 

 

 

86,488

 

Impairment of property and equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

5,898

 

Total costs and expenses

 

 

244,324

 

 

 

17,030

 

 

1,808

 

 

 

263,162

 

 

 

264,015

 

Income (loss) from operations

 

 

30,716

 

 

 

(1,202

)

 

1,146

 

 

 

30,660

 

 

 

72,261

 

Interest expense, net

 

 

52,538

 

 

 

33

 

 

 

 

 

52,571

 

 

 

46,621

 

Loss on extinguishment of debt

 

 

10,151

 

 

 

 

 

 

 

 

10,151

 

 

 

 

Other income, net

 

 

(7,001

)

 

 

 

 

(6

)

 

 

(7,007

)

 

 

(8,279

)

Total other expenses (income)

 

 

55,688

 

 

 

33

 

 

(6

)

 

 

55,715

 

 

 

38,342

 

(Loss) income before income tax (benefit) provision

 

 

(24,972

)

 

 

(1,235

)

 

1,152

 

 

 

(25,055

)

 

 

33,919

 

Income tax (benefit) provision

 

 

(4,532

)

 

 

10

 

 

238

 

 

 

(4,284

)

 

 

9,756

 

Net (loss) income

 

$

(20,440

)

 

$

(1,245

)

$

914

 

 

$

(20,771

)

 

$

24,163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(20,440

)

 

$

(1,245

)

$

914

 

 

$

(20,771

)

 

$

24,163

 

Interest expense, net

 

 

52,538

 

 

 

33

 

 

 

 

 

52,571

 

 

 

46,621

 

Income tax (benefit) provision

 

 

(4,532

)

 

 

10

 

 

238

 

 

 

(4,284

)

 

 

9,756

 

Depreciation and amortization

 

 

74,839

 

 

 

398

 

 

27

 

 

 

75,264

 

 

 

86,501

 

EBITDA

 

 

102,405

 

 

 

(804

)

 

1,179

 

 

 

102,780

 

 

 

167,041

 

Transaction and other related expenses (i)

 

 

25,589

 

 

 

11,467

 

 

 

 

 

37,056

 

 

 

1,422

 

Transformation expenses (ii)

 

 

8,038

 

 

 

 

 

 

 

 

8,038

 

 

 

 

Impairment of property and equipment (iii)

 

 

 

 

 

 

 

 

 

 

 

 

 

5,898

 

Loss on extinguishment of debt (iv)

 

 

10,151

 

 

 

 

 

 

 

 

10,151

 

 

 

 

Sponsor fees and expenses (v)

 

 

4,133

 

 

 

 

 

 

 

 

4,133

 

 

 

 

Stock-based compensation (vi)

 

 

 

 

 

 

 

 

 

 

 

 

 

7,426

 

Adjusted EBITDA

 

$

150,316

 

 

$

10,663

 

$

1,179

 

 

$

162,158

 

 

$

181,787

 

Adjusted EBITDA Margin

 

 

54.7

%

 

 

67.4

%

 

39.9

%

 

 

55.2

%

 

 

54.1

%

 

 

(i)

For the 2018 period, these represent adjustments to add back deal fees incurred in relation to the Company’s acquisition by Greenlight Acquisition Corporation in May 2017 and our acquisitions of HTA and EPC. It primarily consists of acquisition services to Platinum Equity Advisors, LLC, professional fees and other expenses. For the 2019 period, these related to secondary offering costs incurred by us for PE Greenlight Holdings, LLC and transaction expenses.

 

(ii)

One-time costs related to optimizing the expense structure and defining our growth strategy.

 

(iii)

This represents an impairment charge on fixed assets.

 

(iv)

Costs incurred to refinance the Company’s credit facility and term loans. It includes prepayment penalties, the write-off of deferred financing costs, lender fees and third-party costs to issue the new debt.

 

(v)

Sponsor management fees paid to Platinum Equity Advisors, LLC.

 

(vi)

Non-cash stock based compensation.

8

 


VERRA MOBILITY CORPORATION

 

 

FREE CASH FLOW

(Unaudited)

 

Nine Months Ended September 30,

 

($ in thousands)

 

2019

 

 

2018

 

Net cash provided by operating activities

 

$

95,586

 

 

$

46,054

 

Purchases of installation and service parts and property and equipment

 

 

(17,492

)

 

 

(19,622

)

Free cash flow

 

$

78,094

 

 

$

26,432

 

 

 

 

ADJUSTED EPS - QUARTERLY

(Unaudited)

 

(In thousands, except per share data)

 

Q1 2018

 

Q2 2018

 

Q3 2018

 

Q4 2018

 

 

Q1 2019

 

Q2 2019

 

Q3 2019

 

Net (loss) income

 

$

(22,158

)

$

(4,795

)

$

6,513

 

$

(37,955

)

 

$

2,820

 

$

3,591

 

$

17,752

 

Amortization of intangibles

 

 

12,346

 

 

22,188

 

 

23,133

 

 

23,131

 

 

 

23,131

 

 

23,131

 

 

23,131

 

Transaction and other related expenses

 

 

18,103

 

 

5,816

 

 

1,669

 

 

30,855

 

 

 

 

 

1,135

 

 

287

 

Transformation expenses

 

 

1,740

 

 

5,393

 

 

905

 

 

728

 

 

 

 

 

 

 

 

Impairment of property and equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

5,898

 

 

 

Loss on extinguishment of debt

 

 

10,151

 

 

 

 

 

 

16,335

 

 

 

 

 

 

 

 

Sponsor fees and expenses

 

 

1,358

 

 

1,343

 

 

1,433

 

 

1,249

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,272

 

 

 

2,143

 

 

2,812

 

 

2,471

 

Total adjustments

 

 

43,698

 

 

34,740

 

 

27,140

 

 

74,570

 

 

 

25,274

 

 

32,976

 

 

25,889

 

Income tax effect on adjustments

 

 

(10,040

)

 

(1,616

)

 

(7,110

)

 

(17,581

)