false 0001682745 0001682745 2021-05-17 2021-05-17

 

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): May 17, 2021

 

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.

 

 

 

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Item 2.02   Results of Operations and Financial Condition.

On May 17, 2021, Verra Mobility Corporation (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2021. 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 first quarter 2021 financial results on May 17, 2021, at 5 p.m. Eastern time. The Company disseminated an earnings presentation on May 17, 2021 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.

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 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 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.

(d)

Exhibits.

 

Exhibit Number		Description of Exhibits
99.1		Press Release, dated May 17, 2021, issued by Verra Mobility Corporation.
99.2		Q1 2021 Earnings Presentation, dated May 17, 2021, given by Verra Mobility Corporation.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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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:  May 17, 2021	Verra Mobility Corporation
	By:	/s/ Patricia Chiodo
	Name:	Patricia Chiodo
	Title:	Chief Financial Officer

 

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Exhibit 99.1

 

 

Verra Mobility Announces First Quarter Financial Results

 

Total revenue of $89.9 million

Generated cash flows from operations of $9.0 million

 

Mesa, AZ, May 17, 2021 – Verra Mobility (NASDAQ: VRRM), a leading provider of smart mobility technology solutions, announced today the financial results for its first quarter ended March 31, 2021.

 

“We were pleased with our performance during the first quarter of 2021 with both business segments showing signs of continued improvement,” stated David Roberts, Chief Executive Officer of Verra Mobility. “As the economy reopens, our balanced portfolio of products, proven disciplined execution, and highly attractive recurring revenue model position us for strong growth and profitability. We remain focused on executing against our long-term strategic objectives, which drive shareholder value creation. And the current U.S. administration’s renewed focus on building a modern and sustainable public infrastructure support our vision of becoming a global leader in smart transportation.”

First Quarter 2021 Financial Highlights

Liquidity: As of March 31, 2021, cash and cash equivalents were $249.6 million and we generated $9.0 million in cash flows from operations for 2021. As of March 31, 2021, we had total debt of $1.0 billion, net of cash on hand, our net debt was $750.4 million, and a $49.4 million availability to borrow on the revolver that is undrawn.

The operating results for the first quarter of 2021 were impacted by COVID-19, which emerged in late 2019 and subsequently spread throughout the world. COVID-19 has had and continues to have a significant negative impact on the global economy, including the rental car industry, due to reduced airline travel and widespread travel restrictions throughout the world. Refer to the section below entitled Forward-Looking Statements for further discussion on risks and uncertainties.

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Restatement of Previously Reported Financial Information

We restated our consolidated financial statements as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019, and 2018, including interim periods within the fiscal years 2020 and 2019. This was based on recent SEC guidance on April 12, 2021 regarding the accounting for warrants issued by special purpose acquisition companies (“SPACs”). As a result, we provide restated information for the affected prior periods in this press release which should be read in conjunction with the restated information in our Annual Report on Form 10-K/A filed with the SEC on May 14, 2021. The new accounting treatment for warrants impacts net income in prior periods but has no impact on revenue, Adjusted EBITDA, or total cash flows.

Pending Acquisition: On January 22, 2021, we entered into a Scheme Implementation Agreement with Redflex Holdings Limited to acquire all of Redflex’s outstanding equity for approximately A$146.1 million or A$0.92 per share. Subsequently, we increased the purchase price under an amendment to the Scheme Implementation Agreement by which we will pay A$152.5 million or A$0.96 per share. The transaction is subject to receiving regulatory approval from the General Authority for Competition (“GAC”) in the Kingdom of Saudi Arabia. On May 13, the Australian court overseeing the scheme issued orders approving the transaction based on the shareholder vote, making GAC approval the final contractual condition for the scheme to take effect. If completed, this would expand our photo enforcement presence in the United States, Australia, and Europe.

 

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

 

First Quarter 2021 Segment Detail

Conference Call Details

Date: May 17, 2021

Time: 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)

U.S. and Canadian Callers Dial-in: (877) 407-0784

Outside of U.S. and Canada Dial-in: (201) 689-8560 with conference ID #13719669

Webcast Information: 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 11:59 p.m. Eastern Time on May 31, 2021, by dialing (844) 512-2921 for the U.S. or Canada and (412) 317-6671 for international callers and entering passcode

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#13719669. 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 integration with more than 50 individual tolling authorities and connectivity with more than 450 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.

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 2021 financial and operational metrics. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. 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 disruption to our business and results of operations as a result of the COVID-19 pandemic; (2) the impact of the COVID-19 pandemic on our revenues from key customers in the rental car industry and from photo enforcement programs; (3) customer concentration in our Commercial Services and Government Solutions segments; (4) decreases in the prevalence of automated photo enforcement or the use of tolling; (5) risks and uncertainties related to our government contracts, including but not limited to administrative hurdles, legislative changes, termination rights, audits and investigations; (6) decreased interest in outsourcing from our customers; (7) our ability to properly perform under our contracts and otherwise satisfy our customers; (8) our ability to compete in a highly competitive and rapidly evolving market; (9) our ability to keep up with technological developments and changing customer preferences; (10) the success of our new products and changes to existing products and services; (11) our ability to successfully integrate our recent or future acquisitions; (12) failures in or breaches of our networks or systems, including as a result of cyber-attacks; and (13) 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. The forward-looking statements herein 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

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accordance with GAAP. EBITDA, Adjusted EBITDA, Free Cash Flow, Adjusted Net Income and Adjusted EPS are non-GAAP financial measures as defined by SEC rules. These non-GAAP financial measures 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.

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VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

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VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE (LOSS) INCOME

(Unaudited)

 

 

 

 

 

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VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

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VERRA MOBILITY CORPORATION

ADJUSTED EBITDA RECONCILIATION (Unaudited)

 

 

 

 

 

 

FREE CASH FLOW (Unaudited)

 

 

 

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ADJUSTED EPS (Unaudited)

 

 

 

EBITDA and Adjusted EBITDA

 

We define EBITDA as net (loss) income adjusted to exclude interest expense, net, income taxes, depreciation and amortization. Adjusted EBITDA further excludes certain non-cash expenses and other transactions that management believes are not indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities. As a result, they may not be comparable to similarly titled performance measures presented by other companies.

 

We use these metrics to measure our performance from period to period both at the consolidated level as well as within our operating segments, to evaluate and fund incentive compensation programs and to compare our results to those of our competitors. In addition to Adjusted EBITDA being a significant measure of performance for management purposes, we also believe that this presentation provides useful information to investors regarding financial and business trends related to our results of operations and that when non-GAAP financial information is viewed with GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating performance. EBITDA and Adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net (loss) income, cash flows from operations, or other consolidated income or cash flow data prepared in accordance with GAAP.

 

Free Cash Flow

We define “Free Cash Flow” as cash flow from operations less capital expenditures.

 

Adjusted Net Income

We define “Adjusted Net Income” as net (loss) income adjusted to exclude amortization of intangibles and certain non-cash or non-recurring expenses.

 

Adjusted EPS

We define “Adjusted EPS” as Adjusted Net Income divided by the diluted weighted average shares for the period.

 

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Investor Relations Contact

 

Sajid Daudi

Vice President, Investor Relations

480 596-4805

IR@verramobility.com

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Earnings Overview Verra Mobility Q1 Earnings Presentation For the Quarter Ended March 31, 2021

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, 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 disruption to our business and results of operations as a result of the COVID-19 pandemic; (2) the impact of the COVID-19 pandemic on our revenues from key customers in the rental car industry and from photo enforcement programs; (3) customer concentration in our Commercial Services and Government Solutions segments; (4) decreases in the prevalence of automated photo enforcement or the use of tolling; (5) risks and uncertainties related to our government contracts, including but not limited to administrative hurdles, legislative changes, termination rights, audits and investigations; (6) decreased interest in outsourcing from our customers; (7) our ability to properly perform under our contracts and otherwise satisfy our customers; (8) our ability to compete in a highly competitive and rapidly evolving market; (9) our ability to keep up with technological developments and changing customer preferences; (10) the success of our new products and changes to existing products and services; (11) our ability to successfully integrate our recent or future acquisitions; (12) failures in or breaches of our networks or systems, including as a result of cyber-attacks; and (13) 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.

For the Quarter Ended March 31, 2021 Q1 Results by Segment – Commercial Services Revenue of $45.7M in Q1 decreased 25.4% from the same quarter in the prior year Adjusted EBITDA of $22.6M in the quarter decreased $11.1M or 32.9% from the same period of the prior year The CS segment is closely tied to the rental car industry and saw impacts in Q1 due to reduced demand resulting from Covid-19 Operating expenses of $14.2M in Q1 2021 decreased by $2.3M or 14.1% from the same period in the prior year, reflecting cost cutting measures taken in response to the Covid-19 impact on revenue SG&A of $10.8M for Q1 2021 decreased by $2.6M or 19.4% over the same period in the prior year We are pleased with our revenue recovery and our EBITDA margins which are best in class during the worst times Commercial Services Commentary Revenue & YoY Growth Adj. EBITDA & Margin % Commercial Services (2%) 14% 66% 70% 62% 52% (60%) 22% 8% (43%) 17% (29%) 61% 55% 27% 65% (25%)

For the Quarter Ended March 31, 2021 Q1 Results by Segment – Government Solutions Government Solutions Commentary Government Solutions Revenue of $44.2M in Q1 decreased 20.4% from the same quarter in the prior year Service Revenue improvement of $5.8M was offset by a decrease in product revenue of $17.1M Product Revenue was in line with historic levels as there were no Speed camera installs related to the NYC Speed Zone program in the first quarter of 2021 Adjusted EBITDA of $17.8M in the quarter decreased $3.5M or 16.3% from the same period of the prior year Revenue & YoY Growth Adj. EBITDA & Margin % (3%) 55% 8% 27% 42% 4% 21% 17% 37% 38% 38% 39% 39% 43% 39% 40% 40% (20%)

For the Quarter Ended March 31, 2021 Consolidated Q1 Results Total revenue decreased by $26.9 million to $89.9 million or 23% in Q1 2021 from $116.7 million in Q1 2020 Adjusted EBITDA of $40.3 million, decreased from $54.9 million or 26.5% in Q1 of 2021 Adjusted EBITDA margin declined 210 basis points to 44.9% of revenue Q1 Commentary Revenue & YoY Growth Adj. EBITDA & Margin % Verra Mobility 12% 19% 12% (27%) 19% (24%) 18% (11%) 52% 47% 54% 35% 55% 55% 53% 46% (23%) 45%

For the Quarter Ended March 31, 2021 Consolidated Q1 Results Generated cash flow from operations of $9.0 million in Q1 2021 Cash on hand increased to $249.6 million at the end of Q1 2021 from $120.3 million at the end of Q4 2020 Leverage increased due to a decline in EBITDA The company has total debt of $1.0 billion and a $75M revolver that is undrawn.* We believe that cash from operations and cash on hand will be sufficient to run the company for the next 12 months and beyond Revenue Mix & Adj. EBITDA Margins Net Debt & Leverage Q1 Commentary * $49.4M available to borrow on the undrawn $75M revolver Q1 Adj EBITDA Mix by Business Segment

APPENDIX

Consolidated Results of Operations Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Service revenue $99.5 $62.8 $83.0 $91.0 $336.3 $89.8 Product sales 17.2 17.0 13.9 9.2 57.3 0.1 Total revenue $116.7 $79.8 $96.9 $100.2 $393.6 $89.9 Cost of service revenue 1.2 1.0 0.9 0.8 4.0 0.9 Cost of product sales 8.7 9.1 7.1 4.7 29.6 0.0 Operating expenses 32.3 26.7 26.5 30.2 115.7 30.5 Selling, general and administrative expenses 25.9 20.8 17.5 25.4 89.7 28.4 Depreciation, amortization, and (gain) loss on disposal of assets, net 29.2 29.2 29.6 28.8 116.8 28.3 Total costs and expenses $97.3 $86.8 $81.6 $90.1 $355.8 $88.1 Income (loss) from operations 19.4 (7.0) 15.3 10.1 37.8 1.8 Interest expense, net 12.5 9.5 9.6 9.3 40.9 9.2 Change in fair value of private placement warrants (15.5) 8.3 (4.4) 12.7 1.1 2.1 Loss from tax receivable agreement adj - 4.4 - 2.4 6.9 - Loss on extinguishment of debt - - - - - 5.3 Other (income) expense, net (2.9) (1.5) (5.0) (2.5) (11.9) (3.0) Total other expense ($5.9) $20.8 $0.2 $21.9 $37.0 $13.6 Income (loss) before income taxes 25.4 (27.7) 15.0 (11.8) 0.9 (11.8) Income tax provision (benefit) 3.2 (4.0) 4.0 2.3 5.4 (2.9) Net (loss) income $22.1 ($23.7) $11.1 ($14.1) ($4.6) ($8.9) Bridge to adj. EBITDA Net (loss) income $22.1 ($23.7) $11.1 ($14.1) ($4.6) ($8.9) Interest expense, net 12.5 9.5 9.6 9.3 40.9 9.2 Income tax provision (benefit) 3.2 (4.0) 4.0 2.3 5.4 (2.9) Depreciation and amortization 29.3 29.2 29.4 28.7 116.6 28.2 EBITDA $67.1 $11.0 $54.1 $26.2 $158.3 $25.6 Transaction and other related 0.5 0.1 0.1 1.2 1.9 4.1 Transformation expense – 0.5 0.6 (0.0) 1.1 0.3 Loss on extinguishment of debt – – – – – 5.3 TRA adjustment – 4.4 – 2.4 6.9 – Change in fair value of private placement warrants (15.5) 8.3 (4.4) 12.7 1.1 2.1 Stock-based compensation 2.8 3.3 3.2 3.4 12.6 2.9 Adjusted EBITDA $54.9 $27.6 $53.5 $45.8 $181.8 $40.3

Segment Results of Operations Commercial Services Government Solutions Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Segment Revenue Government Solutions $55.5 $52.5 $52.8 $52.0 $212.7 $44.2 Segment Adj EBITDA Government Solutions $21.2 $20.3 $22.5 $20.6 $84.7 $17.8 Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Segment Revenue Commercial Services $61.2 $27.3 $44.2 $48.2 $180.9 $45.7 Segment Adj EBITDA Commercial Services $33.6 $7.3 $31.0 $25.2 $97.2 $22.6

Thank You http://ir.verramobility.com/