UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
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(State or other jurisdiction |
(Commission |
(IRS Employer |
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(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:
Securities registered pursuant to Section 12(b) of the Act:
(Title of each class) |
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(Trading symbol) |
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(Name of each exchange on which registered) |
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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).
☐ 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.
1
Item 2.02 Results of Operations and Financial Condition.
On April 21, 2022, Verra Mobility Corporation (the “Company”) issued a press release announcing its financial results for the quarter and fiscal year ended December 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 fourth quarter and full year 2021 financial results on April 21, 2022, at 5:00 p.m. Eastern time. On April 21, 2022, the Company disseminated an earnings 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 |
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Description of Exhibits |
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|
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99.1 |
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Press Release, dated April 21, 2022, issued by Verra Mobility Corporation. |
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99.2 |
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Q4 2021 Earnings Presentation, dated April 21, 2022, given by Verra Mobility Corporation. |
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99.3 |
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Investor Presentation, dated April 21, 2022, given by Verra Mobility Corporation. |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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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: April 21, 2022 |
Verra Mobility Corporation |
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|
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By: |
/s/ Patricia Chiodo |
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Name: |
Patricia Chiodo |
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Title: |
Chief Financial Officer |
3
Exhibit 99.1
Verra Mobility Announces Fourth Quarter and Full Year 2021 Financial Results
Mesa, Ariz, April 21, 2022 – Verra Mobility Corporation (NASDAQ: VRRM), a leading provider of smart mobility technology solutions, announced today the financial results for the fourth quarter and full year ended December 31, 2021.
“Our 2021 results represent a year of strong execution and exemplary performance. We delivered across all aspects of our business plan – solid operating results as well as the execution of key strategic initiatives that diversify our business and position us in attractive market areas,” said David Roberts, Chief Executive Officer, Verra Mobility. “We have favorable tailwinds entering 2022 with recent flagship contract wins, including the school zone speed expansion in New York City, along with the anticipated continued recovery in travel in the United States and the rest of the world.”
Fourth Quarter 2021 Financial Highlights
We report our results of operations based on three operating segments:
Fourth Quarter 2021 Segment Detail
Full Year 2021 Financial Highlights
Liquidity: As of December 31, 2021, cash and cash equivalents were $101.3 million and we generated $193.2 million in cash flows from operations for 2021.
Redflex Acquisition: On June 17, 2021, we completed the acquisition of Redflex Holdings Limited (“Redflex”), an Australian company formerly listed on the Australian Securities Exchange. Redflex is a provider of intelligent traffic management products and services that are sold and managed in the Asia Pacific, North America, Europe and Middle East regions. Redflex designs, manufactures, and operates a wide range of platform-based solutions, utilizing advanced sensor and image capture technologies that enable active management of state and local motorways.
T2 Systems Acquisition: On December 7, 2021, we acquired T2 Systems Parent Corporation (“T2 Systems”), which offers an integrated suite of parking software and hardware solutions to its customers. This acquisition supports our
2
strategy to expand and diversify into new markets within the mobility sector, and is included in the newly created Parking Solutions segment.
Business Operations Highlights and Contract Awards
2022 Full Year Guidance
Any guidance that we provide is subject to change as a variety of factors can affect actual operating results. Certain of the factors that may impact our actual operating results are identified below in the safe harbor language included within Forward-Looking Statements of this press release. In addition, the recent acquisitions of Redflex and T2 Systems include preliminary allocations of the fair values of assets acquired and liabilities assumed as of the acquisition date. Purchase price allocations are subject to change within the measurement period (up to one year from the acquisition date).
We are reiterating our 2022 financial guidance issued on March 31, 2022 based on our financial results to date and our current outlook for the remainder of the year. The table below summarizes our 2022 financial guidance:
Service revenue |
$635 million - $652 million |
Product sales |
$59 million - $63 million |
Total revenue |
$694 million - $715 million |
Adjusted EBITDA |
$312 million - $322 million |
Conference Call Details
Date: April 21, 2022
Time: 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)
U.S. and Canadian Callers Dial-in: (800) 289-0438
Outside of U.S. and Canada Dial-in: (323) 794-2423 for international callers with conference ID #4936039
Webcast Information: Available live in the “Investor Relations” section of our 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 05, 2022, by dialing (844) 512-2921 for the U.S. or Canada and (412) 317-6671 for international callers and entering passcode #4936039. In addition, an archived webcast will be available in the “News & Events” section of the Investor Relations page on our 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.
As a leading provider of connected mobility systems, Verra Mobility serves the world’s largest rental car companies and commercial fleets by managing tolling and violation transactions for millions of vehicles each year through integration and connectivity with hundreds of tolling and issuing authorities. Verra Mobility also fosters the development of safe cities, partnering with law enforcement agencies, transportation departments and school districts mainly across North America operating thousands of speed, red-light, bus lane and school bus stop arm safety
3
cameras, and by offering parking hardware and software solutions. Arizona-based Verra Mobility operates in North America, Australia, Europe and Asia. For more information, visit www.verramobility.com.
Forward-Looking Statements
This press release contains forward-looking statements which address our 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 our 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 2022 financial and operational metrics. Forward-looking statements involve risks and uncertainties and a number of factors could cause actual results to differ materially from those currently anticipated. These factors include, but are not limited to: (1) the impacts on our operations and business resulting from our delayed 2021 Form 10-K filing; (2) the disruption to our business and results of operations as a result of the COVID-19 pandemic; (3) the impact of the COVID-19 pandemic on our revenues from key customers in the rental car industry and from photo enforcement programs; (4) customer concentration in our Commercial Services and Government Solutions segments; (5) decreases in the prevalence of automated photo enforcement or the use of tolling; (6) risks and uncertainties related to our government contracts, including but not limited to administrative hurdles, legislative changes, termination rights, audits and investigations; (7) decreased interest in outsourcing from our customers; (8) our ability to properly perform under our contracts and otherwise satisfy our customers; (9) our ability to compete in a highly competitive and rapidly evolving market; (10) our ability to keep up with technological developments and changing customer preferences; (11) the success of our new products and changes to existing products and services; (12) our ability to successfully integrate our recent or future acquisitions; (13) failures in or breaches of our networks or systems, including as a result of cyber-attacks; and (14) 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. This press release should be read in conjunction with the information included in our other press releases, reports and other filings with the SEC. Understanding the information contained in these filings is important in order to fully understand our 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”), we also disclose 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, Free Cash Flow, Adjusted Net Income, Adjusted EPS and Adjusted EBITDA Margin are non-GAAP financial measures as defined by SEC rules. These non-GAAP financial measures may be determined or calculated differently by other companies. As a result, they may not be comparable to similarly titled performance measures presented 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.
We are not providing a quantitative reconciliation of Adjusted EBITDA, which is included in our 2022 financial guidance above, in reliance on the “unreasonable efforts” exception for forward-looking non-GAAP measures set forth in SEC rules because certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated without unreasonable effort and expense. In this regard, we are unable to provide a reconciliation of forward-looking Adjusted EBITDA to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Due to the uncertainty of estimates and assumptions used in preparing forward-looking non-GAAP measures, we caution investors that actual results could differ materially from these non-GAAP financial projections.
4
We use these non-GAAP financial 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, we also believe that these non-GAAP measures provide 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. These non-GAAP measures have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows from operations, earnings per share or other consolidated income or cash flow data prepared in accordance with GAAP.
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) 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.
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 income (loss) 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.
Adjusted EBITDA Margin
We define “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage of total revenue.
5
VERRA MOBILITY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share data) |
|
|
December 31, |
|
|
December 31, |
|
||
Assets |
|
|
|
|
|
|
|
||
Current assets: |
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|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
$ |
101,283 |
|
|
$ |
120,259 |
|
Restricted cash |
|
|
|
3,149 |
|
|
|
633 |
|
Accounts receivable (net of allowance for credit losses of $12.1 million and $11.5 million at December 31, 2021 and 2020, respectively) |
|
|
|
160,979 |
|
|
|
168,783 |
|
Unbilled receivables |
|
|
|
29,109 |
|
|
|
14,045 |
|
Inventory, net |
|
|
|
12,093 |
|
|
|
113 |
|
Prepaid expenses and other current assets |
|
|
|
41,456 |
|
|
|
24,204 |
|
Total current assets |
|
|
|
348,069 |
|
|
|
328,037 |
|
Installation and service parts, net |
|
|
|
13,332 |
|
|
|
7,944 |
|
Property and equipment, net |
|
|
|
96,066 |
|
|
|
70,284 |
|
Operating lease assets |
|
|
|
38,862 |
|
|
|
29,787 |
|
Intangible assets, net |
|
|
|
487,299 |
|
|
|
342,139 |
|
Goodwill |
|
|
|
838,867 |
|
|
|
586,435 |
|
Other non-current assets |
|
|
|
14,561 |
|
|
|
2,699 |
|
Total assets |
|
|
$ |
1,837,056 |
|
|
$ |
1,367,325 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
|
||
Accounts payable |
|
|
$ |
67,556 |
|
|
$ |
34,509 |
|
Deferred revenue |
|
|
|
27,141 |
|
|
|
749 |
|
Accrued liabilities |
|
|
|
38,435 |
|
|
|
14,887 |
|
Payable to related party pursuant to tax receivable agreement, current portion |
|
|
|
5,107 |
|
|
|
4,791 |
|
Current portion of long-term debt |
|
|
|
36,952 |
|
|
|
9,104 |
|
Total current liabilities |
|
|
|
175,191 |
|
|
|
64,040 |
|
Long-term debt, net of current portion |
|
|
|
1,206,802 |
|
|
|
832,941 |
|
Operating lease liabilities, net of current portion |
|
|
|
34,984 |
|
|
|
27,986 |
|
Payable to related party pursuant to tax receivable agreement, net of current portion |
|
|
|
56,615 |
|
|
|
67,869 |
|
Private placement warrant liabilities |
|
|
|
38,466 |
|
|
|
30,866 |
|
Asset retirement obligation |
|
|
|
11,824 |
|
|
|
6,409 |
|
Deferred tax liabilities, net |
|
|
|
47,524 |
|
|
|
21,148 |
|
Other long-term liabilities |
|
|
|
5,686 |
|
|
|
494 |
|
Total liabilities |
|
|
|
1,577,092 |
|
|
|
1,051,753 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
||
Stockholders' equity |
|
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value |
|
|
— |
|
|
|
— |
|
|
Common stock, $0.0001 par value |
|
|
16 |
|
|
|
16 |
|
|
Common stock contingent consideration |
|
|
36,575 |
|
|
|
36,575 |
|
|
Additional paid-in capital |
|
|
|
309,883 |
|
|
|
373,620 |
|
Accumulated deficit |
|
|
|
(81,416 |
) |
|
|
(94,850 |
) |
Accumulated other comprehensive (loss) income |
|
|
|
(5,094 |
) |
|
|
211 |
|
Total stockholders' equity |
|
|
|
259,964 |
|
|
|
315,572 |
|
Total liabilities and stockholders' equity |
|
|
$ |
1,837,056 |
|
|
$ |
1,367,325 |
|
6
VERRA MOBILITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
||||||||||
($ in thousands, except per share data) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Service revenue |
|
$ |
144,846 |
|
|
$ |
90,982 |
|
|
$ |
492,846 |
|
|
$ |
336,274 |
|
Product sales |
|
|
25,134 |
|
|
|
9,181 |
|
|
|
57,744 |
|
|
|
57,319 |
|
Total revenue |
|
|
169,980 |
|
|
|
100,163 |
|
|
|
550,590 |
|
|
|
393,593 |
|
Cost of service revenue |
|
|
1,713 |
|
|
|
828 |
|
|
|
5,337 |
|
|
|
3,967 |
|
Cost of product sales |
|
|
14,247 |
|
|
|
4,735 |
|
|
|
29,809 |
|
|
|
29,573 |
|
Operating expenses |
|
|
48,135 |
|
|
|
30,227 |
|
|
|
163,370 |
|
|
|
115,729 |
|
Selling, general and administrative expenses |
|
|
37,155 |
|
|
|
25,446 |
|
|
|
123,407 |
|
|
|
89,664 |
|
Depreciation, amortization and (gain) loss on disposal of assets, net |
|
|
31,995 |
|
|
|
28,842 |
|
|
|
116,801 |
|
|
|
116,844 |
|
Total costs and expenses |
|
|
133,245 |
|
|
|
90,078 |
|
|
|
438,724 |
|
|
|
355,777 |
|
Income from operations |
|
|
36,735 |
|
|
|
10,085 |
|
|
|
111,866 |
|
|
|
37,816 |
|
Interest expense, net |
|
|
12,461 |
|
|
|
9,297 |
|
|
|
44,942 |
|
|
|
40,865 |
|
Change in fair value of private placement warrants |
|
|
2,533 |
|
|
|
12,666 |
|
|
|
7,600 |
|
|
|
1,133 |
|
Tax receivable agreement liability adjustment |
|
|
(2,677 |
) |
|
|
2,404 |
|
|
|
(1,016 |
) |
|
|
6,850 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
5,334 |
|
|
|
— |
|
Other income, net |
|
|
(3,590 |
) |
|
|
(2,455 |
) |
|
|
(12,895 |
) |
|
|
(11,885 |
) |
Total other expenses |
|
|
8,727 |
|
|
|
21,912 |
|
|
|
43,965 |
|
|
|
36,963 |
|
Income (loss) before income taxes |
|
|
28,008 |
|
|
|
(11,827 |
) |
|
|
67,901 |
|
|
|
853 |
|
Income tax provision |
|
|
8,942 |
|
|
|
2,255 |
|
|
|
26,452 |
|
|
|
5,431 |
|
Net income (loss) |
|
$ |
19,066 |
|
|
$ |
(14,082 |
) |
|
$ |
41,449 |
|
|
$ |
(4,578 |
) |
Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in foreign currency translation adjustment |
|
|
(1,648 |
) |
|
|
4,196 |
|
|
|
(5,305 |
) |
|
|
2,788 |
|
Total comprehensive income (loss) |
|
$ |
17,418 |
|
|
$ |
(9,886 |
) |
|
$ |
36,144 |
|
|
$ |
(1,790 |
) |
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.12 |
|
|
$ |
(0.09 |
) |
|
$ |
0.26 |
|
|
$ |
(0.03 |
) |
Diluted |
|
$ |
0.12 |
|
|
$ |
(0.09 |
) |
|
$ |
0.25 |
|
|
$ |
(0.03 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
155,953 |
|
|
|
162,144 |
|
|
|
159,983 |
|
|
|
161,632 |
|
Diluted |
|
|
159,965 |
|
|
|
162,144 |
|
|
|
163,778 |
|
|
|
161,632 |
|
7
VERRA MOBILITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
For the Year Ended December 31, |
|
|||||
($ in thousands) |
|
2021 |
|
|
2020 |
|
||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
41,449 |
|
|
$ |
(4,578 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
116,753 |
|
|
|
116,570 |
|
Amortization of deferred financing costs and discounts |
|
|
5,170 |
|
|
|
5,437 |
|
Change in fair value of private placement warrants |
|
|
7,600 |
|
|
|
1,133 |
|
Tax receivable agreement liability adjustment |
|
|
(1,016 |
) |
|
|
6,850 |
|
Loss on extinguishment of debt |
|
|
5,334 |
|
|
|
— |
|
Credit loss expense |
|
|
9,588 |
|
|
|
14,391 |
|
Deferred income taxes |
|
|
(10,640 |
) |
|
|
(4,746 |
) |
Stock-based compensation |
|
|
13,784 |
|
|
|
12,589 |
|
Other |
|
|
308 |
|
|
|
1,210 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
14,946 |
|
|
|
(90,592 |
) |
Unbilled receivables |
|
|
(7,753 |
) |
|
|
5,964 |
|
Inventory, net |
|
|
2,798 |
|
|
|
— |
|
Prepaid expenses and other assets |
|
|
(5,097 |
) |
|
|
3,829 |
|
Deferred revenue |
|
|
(3,966 |
) |
|
|
58 |
|
Accounts payable and other current liabilities |
|
|
8,296 |
|
|
|
(16,925 |
) |
Other liabilities |
|
|
(4,383 |
) |
|
|
(4,281 |
) |
Net cash provided by operating activities |
|
|
193,171 |
|
|
|
46,909 |
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
||
Acquisitions, net of cash and restricted cash acquired |
|
|
(451,237 |
) |
|
|
— |
|
Purchases of installation and service parts and property and equipment |
|
|
(24,998 |
) |
|
|
(24,260 |
) |
Cash proceeds from the sale of assets |
|
|
265 |
|
|
|
107 |
|
Net cash used in investing activities |
|
|
(475,970 |
) |
|
|
(24,153 |
) |
Cash Flows from Financing Activities: |
|
|
|
|
|
|
||
Borrowings on revolver |
|
|
25,000 |
|
|
|
— |
|
Borrowings of long-term debt |
|
|
1,245,500 |
|
|
|
— |
|
Repayment of long-term debt |
|
|
(884,530 |
) |
|
|
(28,779 |
) |
Payment of debt issuance costs |
|
|
(10,646 |
) |
|
|
(1,078 |
) |
Payment of debt extinguishment costs |
|
|
(1,066 |
) |
|
|
— |
|
Share repurchase and retirement |
|
|
(100,000 |
) |
|
|
— |
|
Proceeds from exercise of stock options |
|
|
155 |
|
|
|
— |
|
Payment of employee tax withholding related to RSUs vesting |
|
|
(5,691 |
) |
|
|
(4,147 |
) |
Net cash provided by (used in) financing activities |
|
|
268,722 |
|
|
|
(34,004 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(2,383 |
) |
|
|
(290 |
) |
Net decrease in cash, cash equivalents and restricted cash |
|
|
(16,460 |
) |
|
|
(11,538 |
) |
Cash, cash equivalents and restricted cash - beginning of period |
|
|
120,892 |
|
|
|
132,430 |
|
Cash, cash equivalents and restricted cash - end of period |
|
$ |
104,432 |
|
|
$ |
120,892 |
|
8
VERRA MOBILITY CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
|
|
Three Months Ended December 31, |
|
|
For the Year Ended December 31, |
|
||||||||||
($ in thousands) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Net income (loss) |
|
$ |
19,066 |
|
|
$ |
(14,082 |
) |
|
$ |
41,449 |
|
|
$ |
(4,578 |
) |
Interest expense, net |
|
|
12,461 |
|
|
|
9,297 |
|
|
|
44,942 |
|
|
|
40,865 |
|
Income tax provision |
|
|
8,942 |
|
|
|
2,255 |
|
|
|
26,452 |
|
|
|
5,431 |
|
Depreciation and amortization |
|
|
31,997 |
|
|
|
28,742 |
|
|
|
116,753 |
|
|
|
116,570 |
|
EBITDA |
|
|
72,466 |
|
|
|
26,212 |
|
|
|
229,596 |
|
|
|
158,288 |
|
Transaction and other related expenses (i) |
|
|
3,842 |
|
|
|
1,160 |
|
|
|
13,952 |
|
|
|
1,895 |
|
Transformation expenses (ii) |
|
|
220 |
|
|
|
— |
|
|
|
1,688 |
|
|
|
1,090 |
|
Change in fair value of private placement warrants (iii) |
|
|
2,533 |
|
|
|
12,666 |
|
|
|
7,600 |
|
|
|
1,133 |
|
Tax receivable agreement liability adjustment (iv) |
|
|
(2,677 |
) |
|
|
2,404 |
|
|
|
(1,016 |
) |
|
|
6,850 |
|
Loss on extinguishment of debt (v) |
|
|
— |
|
|
|
— |
|
|
|
5,334 |
|
|
|
— |
|
Stock-based compensation (vi) |
|
|
3,600 |
|
|
|
3,397 |
|
|
|
13,784 |
|
|
|
12,589 |
|
Adjusted EBITDA |
|
$ |
79,984 |
|
|
$ |
45,839 |
|
|
$ |
270,938 |
|
|
$ |
181,845 |
|
FREE CASH FLOW (Unaudited)
|
|
For the Year Ended December 31, |
|
|||||
($ in thousands) |
|
2021 |
|
|
2020 |
|
||
Net cash provided by operating activities |
|
$ |
193,171 |
|
|
$ |
46,909 |
|
Purchases of installation and service parts and property and equipment |
|
|
(24,998 |
) |
|
|
(24,260 |
) |
Free cash flow |
|
$ |
168,173 |
|
|
$ |
22,649 |
|
9
ADJUSTED EPS (Unaudited)
|
|
Three Months Ended December 31, |
|
|
For the Year Ended December 31, |
|
||||||
($ in thousands, except per share data) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|||
Net income (loss) |
|
$ |
19,066 |
|
|
$ |
(14,082 |
) |
|
$ |
41,449 |
|
Amortization of intangibles |
|
|
23,086 |
|
|
|
22,860 |
|
|
|
89,945 |
|
Transaction and other related expenses |
|
|
3,842 |
|
|
|
1,160 |
|
|
|
13,952 |
|
Transformation expenses |
|
|
220 |
|
|
|
— |
|
|
|
1,688 |
|
Change in fair value of private placement warrants |
|
|
2,533 |
|
|
|
12,666 |
|
|
|
7,600 |
|
Tax receivable agreement liability adjustment |
|
|
(2,677 |
) |
|
|
2,404 |
|
|
|
(1,016 |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
5,334 |
|
Stock-based compensation |
|
|
3,600 |
|
|
|
3,397 |
|
|
|
13,784 |
|
Total adjustments before income tax effect |
|
|
30,604 |
|
|
|
42,487 |
|
|
|
131,287 |
|
Income tax effect on adjustments |
|
|
(9,771 |
) |
|
|
(8,101 |
) |
|
|
(51,145 |
) |
Total adjustments after income tax effect |
|
|
20,833 |
|
|
|
34,386 |
|
|
|
80,142 |
|
Adjusted Net Income |
|
$ |
39,899 |
|
|
$ |
20,304 |
|
|
$ |
121,591 |
|
|
|
|
|
|
|
|
|
|
|
|||
Adjusted EPS |
|
$ |
0.25 |
|
|
$ |
0.13 |
|
|
$ |
0.74 |
|
Diluted weighted average shares outstanding |
|
|
159,965 |
|
|
|
162,144 |
|
|
|
163,778 |
|
The Adjusted Net Income and Adjusted EPS for the twelve months ended December 31, 2020 were not presented as they were not meaningful due to the disproportionate effective tax rate for the period.
10
Investor Relations Contact
Mark Zindler
mark.zindler@verramobility.com
11
Earnings Overview Verra Mobility Q4 Earnings Presentation For the Quarter Ended December 31, 2021 Exhibit 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, performance, strategies, prospects and other aspects of the business of Verra Mobility Corporation and its subsidiaries (collectively, “Verra Mobility” or the “Company”) are based on current expectations and judgements of the Company as of the date of this release. The Company disclaims any intent or obligation to update forward-looking statements hereafter. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including but not limited to (1) the impacts on our operations and business resulting from our delayed 2021 Form 10-K filing (2) the disruption to our business and results of operations as a result of the COVID-19 pandemic; (3) the impact of the COVID-19 pandemic on our revenues from key customers in the rental car industry and from photo enforcement programs; (4) customer concentration in our Commercial Services and Government Solutions segments; (5) decreases in the prevalence of automated photo enforcement or the use of tolling; (6) risks and uncertainties related to our government contracts, including but not limited to administrative hurdles, legislative changes, termination rights, audits and investigations; (7) decreased interest in outsourcing from our customers; (8) our ability to properly perform under our contracts and otherwise satisfy our customers; (9) our ability to compete in a highly competitive and rapidly evolving market; (10) our ability to keep up with technological developments and changing customer preferences; (11) the success of our new products and changes to existing products and services; (12) our ability to successfully integrate our recent or future acquisitions; (13) failures in or breaches of our networks or systems, including as a result of cyber-attacks; and (14) 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. These risks, uncertainties and other factors are further described under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in the documents filed with the SEC from time to time. 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 and other transactions that management believes are not indicative of Verra Mobility’s ongoing operating performance. 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.
3 | 3 | Providing mission critical operational services to solve the complex challenges of our customers Strong Execution in the fourth quarter Total revenue and adjusted EBITDA exceeded the high-end of expectations Strong operating cash flow The Commercial Services segment continues to see strong demand and returned to 2019 revenue levels in the fourth quarter with similar profitability levels Government Solutions fourth quarter performance driven by the installation of 326 fixed speed systems in New York City Key Contract wins Executed a five-year contract extension with Fox Rent A Car for tolling services (Fox is our 4th largest tolling customer) Subsequent to the end of the fourth quarter, the Government Solutions segment has completed the installation of 720 cameras for the New York City DoT with the last 25 being invoiced in January 2022 In February, the Company received a Notice to Proceed on the 240 School Zone Speed Cameras, which it expects to fully install in 2022 In addition, executed a three-year contract extension with Hertz for title & registration work Executive summary Q4 2021 Total Revenue $170.0 million; including $6.5 million from T2 Systems Q4 2021 Adjusted EBITDA 1 $80.0 million; including $2.6 million from T2 Systems 1 Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures, see the appendix. Full-Year 2021 Cash Flow from Operations $193.2 million Closed T2 Systems acquisition Important Legislative Actions Washington transportation bill - The bill expands & extends programs in Washington state Automated speed enforcement Extends sunset period for other photo enforcement
Full year 2021 results For the Year Ended December 31, 2021 Revenue & YoY Growth Adj EBITDA & Margin % Cash from Operations $ in Millions $ in Millions $ in Millions 54% 46% 49% 40% YoY Increase
Q4 Results by segment – commercial services For the Quarter Ended December 31, 2021 Revenue & YoY Growth Adj EBITDA & Margin % Revenue Revenue of $71.5M in Q4 increased 48.3% from the same quarter in the prior year. Adj EBITDA Adjusted EBITDA of $43.8M in the quarter increased $18.6M or 73.5% from the same period of the prior year Operating expenses of $18.1M in Q4 2021 increased by $4.6M or 34.4% from the same period in the prior year SG&A of $12.0M for Q4 2021 increased by $0.5M or 4.4% over the same period in the prior year We have returned to 2019 levels of revenue and profitability with Adj EBITDA margins of 61% (25%) 22% (2%) 14% (60%) 8% (43%) 17% (29%) 61% 55% 65% 27% 62% 52% 66% 70% FY Revenue & YoY Growth FY Adj EBITDA & Margin % 63% 54% 61% 44% YoY Increase
Q4 Results by segment – Government solutions For the Quarter Ended December 31, 2021 Revenue & YoY Growth Adj EBITDA & Margin % Revenue Revenue of $92.0M in Q4 increased 77.0% from the same quarter in the prior year Service revenue grew $26.6M or 62.2% Revenue reflects the installation of 326 Fixed Speed systems in NYC. Product revenue is dependent on a few customers who buy their equipment in the US and international project and is a less predictable revenue stream than service revenue Adj EBITDA Adjusted EBITDA of $33.6M in the quarter increased $13.0M or 63.3% from the same period of the prior year (20%) (3%) 55% 42% 4% 21% 17% 27% 8% 38% 37% 39% 39% 43% 38% 40% 39% FY Revenue & YoY Growth 33% YoY Increase FY Adj EBITDA & Margin % 38% 40% 38%
Consolidated Q4 Results For the Quarter Ended December 31, 2021 Revenue & YoY Growth Adj EBITDA & Margin % Revenue Total revenue increased by $69.8 million to $170.0 million or 69.7% in Q4 2021 from $100.2 million in Q4 2020 Adj EBITDA Adjusted EBITDA of $80.0 million, increased by $34.1 million or 74.5% in Q4 of 2021 Adjusted EBITDA grew approximately $20.4M or 34.2% over the same quarter in 2019, hurdling pre-pandemic levels (23%) Parking Solutions reflected $6.5M in revenue ($4.0M in service rev & $2.6M in product rev) & $2.6M in Adj EBITDA in Dec 2021 (24%) 19% (27%) (11%) 12% 12% 18% 19% 46% 53% 55% 55% 35% 54% 47% 52%
Consolidated Q4 Results For the Quarter Ended December 31, 2021 Q4 Adj EBITDA Mix by Business Segment Net Debt & Leverage (1) Revenue Mix & Adj EBITDA Margins Cash and Debt balances Cash on hand decreased to $101.3 million at the end of Q4 2021 from $120.3 million at the end of Q4 2020 Generated cash flow from operations of $193.2 million Leverage increased due to a decrease in EBITDA The company has total debt of about $1.3 billion including $25.0 million in outstanding borrowings on the revolver, which was repaid in January 2022 Announced Acquisitions On November 1st the company signed an agreement to acquire T2 Systems for $347 million and an additional $9 for an acquisition that was signed by T2 but not yet closed. The company used the accordion feature in the Term Loan B for $250 million with the remainder in cash. 1 As of December 31, 2021, we had $25.0 million in outstanding borrowings on the Revolver, which was repaid in full in January 2022. Excluding the $25.0 million under the revolver, net leverage would be 4.2x
Reiterating guidance Service Revenue – At Mid-Point YoY Service Revenue growth of 30% including T2 Systems and Redflex Product Revenue Modest increase over FY21 Increase in product revenue driven by T2 Systems and Redflex, offset by the reduction in New York City installations Adj EBITDA Implies margin compression in 2022 due to a continued shift in revenue mix toward the GS business and the incorporation of T2 Systems and Redflex, both of whom operate at lower margins than legacy Verra Mobility Cash and Leverage Standalone Basis Total debt is expected to be $1,239M at year-end We expect to end 2022 with ~$240M of cash on hand Reiterating guidance initially provided on March 31, 2022 2022 Full Year Low High Mid Service Revenue $635 $652 $643 Product Revenue $59 $63 $61 Total Revenue $694 $715 $704 Adj EBITDA $312 $322 $317 Adj EBITDA Margin 45% 45% 45%
APPENDIX
Verra Mobility Quarterly Results 2020 - 2021 Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Full Year 2021 Service revenue $99.5 $62.8 $83.0 $91.0 $336.3 $89.8 $116.4 $141.8 $144.8 $492.8 Product sales 17.2 17.0 13.9 9.2 57.3 0.1 12.2 20.3 25.1 57.7 Total revenue $116.7 $79.8 $96.9 $100.2 $393.6 $89.9 $128.7 $162.1 $170.0 $550.6 Cost of service revenue 1.2 1.0 0.9 0.8 4.0 0.9 1.3 1.4 1.7 5.3 Cost of product sales 8.7 9.1 7.1 4.7 29.6 0.0 6.1 9.4 14.2 29.8 Operating expenses 32.3 26.7 26.5 30.2 115.7 30.5 36.4 48.3 48.1 163.4 Selling, general and administrative expenses 25.9 20.8 17.5 25.4 89.7 28.4 26.2 31.6 37.2 123.4 Depreciation, amortization, and (gain) loss on disposal of assets, net 29.2 29.2 29.6 28.8 116.8 28.3 27.0 29.5 32.0 116.8 Total costs and expenses $97.3 $86.8 $81.6 $90.1 $355.8 $88.1 $97.2 $120.2 $133.2 $438.7 Income (loss) from operations 19.4 (7.0) 15.3 10.1 37.8 1.8 31.5 41.9 36.7 111.9 Interest expense, net 12.5 9.5 9.6 9.3 40.9 9.2 11.7 11.6 12.5 44.9 Change in fair value of private placement warrants (15.5) 8.3 (4.4) 12.7 1.1 2.1 8.1 (5.1) 2.5 7.6 Tax receivable agreement adj - 4.4 - 2.4 6.9 - 1.7 - (2.7) (1.0) Loss on extinguishment of debt - - - - - 5.3 - - - 5.3 Other (income) expense, net (2.9) (1.5) (5.0) (2.5) (11.9) (3.0) (2.8) (3.5) (3.6) (12.9) Total other expense ($5.9) $20.8 $0.2 $21.9 $37.0 $13.6 $18.6 $3.1 8.7 44.0 Income (loss) before income taxes 25.4 (27.7) 15.0 (11.8) 0.9 (11.8) 12.9 38.8 28.0 67.9 Income tax provision (benefit) 3.2 (4.0) 4.0 2.3 5.4 (2.9) 8.9 11.5 8.9 26.5 Net (loss) income $22.1 ($23.7) $11.1 ($14.1) ($4.6) ($8.9) $4.0 $27.3 $19.1 $41.4 Bridge to adj. EBITDA Net (loss) income $22.1 ($23.7) $11.1 ($14.1) ($4.6) ($8.9) $4.0 $27.3 $19.1 $41.4 Interest expense, net 12.5 9.5 9.6 9.3 40.9 9.2 11.7 11.6 12.5 44.9 Income tax provision (benefit) 3.2 (4.0) 4.0 2.3 5.4 (2.9) 8.9 11.5 8.9 26.5 Depreciation and amortization 29.3 29.2 29.4 28.7 116.6 28.2 27.0 29.5 32.0 116.8 EBITDA $67.1 $11.0 $54.1 $26.2 $158.3 $25.6 $51.6 $80.0 $72.5 $229.6 Transaction and other related 0.5 0.1 0.1 1.2 1.9 4.1 3.3 2.7 3.8 14.0 Transformation expense – 0.5 0.6 (0.0) 1.1 0.3 0.4 0.8 0.2 1.7 Loss on extinguishment of debt – – – – – 5.3 - - - 5.3 TRA adjustment – 4.4 – 2.4 6.9 – 1.7 - (2.7) (1.0) Change in fair value of private placement warrants (15.5) 8.3 (4.4) 12.7 1.1 2.1 8.1 (5.1) 2.5 7.6 Stock-based compensation 2.8 3.3 3.2 3.4 12.6 2.9 3.6 3.7 3.6 13.8 Adjusted EBITDA $54.9 $27.6 $53.5 $45.8 $181.8 $40.3 $68.6 $82.1 $80.0 $270.9
Segment Results of Operations 2020 - 2021 Commercial Services Parking Solutions Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Full Year 2021 Segment Total Revenue Commercial Services $61.2 $27.3 $44.2 $48.2 $180.9 $45.7 $66.5 $77.3 $71.5 $260.9 Segment Adj EBITDA Commercial Services $33.6 $7.3 $31.0 $25.2 $97.2 $22.6 $42.8 $51.3 $43.8 $160.4 Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Full Year 2021 Segment Total Revenue Government Solutions $55.5 $52.5 $52.8 $52.0 $212.7 $44.2 $62.2 $84.8 $92.0 $283.2 Segment Adj EBITDA Government Solutions $21.2 $20.3 $22.5 $20.6 $84.7 $17.8 $25.8 $30.7 $33.6 $107.9 Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Full Year 2021 Total Revenue Parking Solutions $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $6.5 $6.5 Adj EBITDA Parking Solutions $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $2.6 $2.6 Government Solutions
Thank You http://ir.verramobility.com/
Investor Overview Verra Mobility Q4 Investor Presentation For the Quarter Ended December 31, 2021 Exhibit 99.3
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” or the “Company”) are based on current expectations and judgements of the Company as of the date of this release. The Company disclaims any intent or obligation to update forward-looking statements hereafter. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including but not limited to (1) the impacts on our operations and business resulting from our delayed 2021 Form 10-K filing (2) the disruption to our business and results of operations as a result of the COVID-19 pandemic; (3) the impact of the COVID-19 pandemic on our revenues from key customers in the rental car industry and from photo enforcement programs; (4) customer concentration in our Commercial Services and Government Solutions segments; (5) decreases in the prevalence of automated photo enforcement or the use of tolling; (6) risks and uncertainties related to our government contracts, including but not limited to administrative hurdles, legislative changes, termination rights, audits and investigations; (7) decreased interest in outsourcing from our customers; (8) our ability to properly perform under our contracts and otherwise satisfy our customers; (9) our ability to compete in a highly competitive and rapidly evolving market; (10) our ability to keep up with technological developments and changing customer preferences; (11) the success of our new products and changes to existing products and services; (12) our ability to successfully integrate our recent or future acquisitions; (13) failures in or breaches of our networks or systems, including as a result of cyber-attacks; and (14) 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. These risks, uncertainties and other factors are further described under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in the documents filed with the SEC from time to time. 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. Use of Non-GAAP Financial Measures This presentation includes non-GAAP financial measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”), Pro Forma Adjusted EBITDA, Free Cash Flow, Free Cash Flow Margin and Pro Forma Adjusted Revenue. Pro Forma Adjusted EBITDA is defined as EBITDA adjusted as described in this presentation for historical costs and estimated cost savings and synergies. Free Cash Flow is defined as EBITDA minus capital expenditures, and Free Cash Flow Margin is defined as Free Cash Flow divided by total revenue. Pro Forma Adjusted Revenue adjusts total revenue for non-cash amortization of contract incentive and certain pre-acquisition results. These non-GAAP financial measures may be determined or calculated differently by other companies. As a result, they may not be comparable to similarly titled performance measures presented by other companies. Reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements have been provided elsewhere in this presentation. Verra Mobility uses these non-GAAP financial metrics to measure its performance from period to period both at the consolidated level as well as within its operating segments, to evaluate and fund incentive compensation programs and to compare its results to those of its competitors. In addition, the Company also believes that these non-GAAP measures provide useful information to investors regarding financial and business trends related to the Company’s 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 the Company’s ongoing operating performance. These non-GAAP measures have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows from operations, earnings per share or other consolidated income or cash flow data prepared in accordance with GAAP.
Verra mobility Who We Are SAFE. SMART. CONNECTED. A global leader in smart transportation, we work alongside our customers to relentlessly develop customized technology solutions to solve complex transportation challenges. Building safer cities by installing, maintaining and managing leading technology that positively impacts driver behavior and enhances road safety. Enabling smarter roadways by providing the integrated technology to help rental car companies and large fleet operators manage tolls, violations, and vehicle title and registrations. Developing more connected systems by seamlessly connecting people, technology and data across the smart mobility ecosystem. As mobility becomes more complex, connected and automated, Verra Mobility works behind the scenes to help make transportation safer and easier.
We operate in three business segments Who We Are * TTM Service Revenue for the period ending December 31, 2021; Parking Solutions represents T2 Systems post-closing (December 7, 2021) Business Unit Commercial Services $261M Service Revenue* Government Solutions $228M Service Revenue* Parking Solutions $4M Service Revenue* What we do Who we serve Business Model The Commercial Services segment generates revenue by providing fully outsourced tolling and violations management and title and registration services to our customers through integrated technologies that both reduce cost and add value. The Government Solutions segment generates revenue by contracting with municipalities and school districts to provide the hardware, software, installation, maintenance and support they need to identify, issue, enforce, and successfully adjudicate traffic violations. Rental Car Companies (RACs) Fleet Management Companies (FMCs) Large Fleet Operators Municipalities Counties School districts Other governmental entities Universities Municipalities Healthcare Commercial/Private Operators The Parking Solutions segment provides an integrated suite of parking software and hardware solutions that includes curbside management, mobile payments, contactless transactions and transportation demand management. Violators Management Software Municipalities/Universities
Commercial services Providing tolling, violation management and title/registration services Toll Management Violations Title and Registration Rental fleet toll collection and management, reducing in-house administrative burdens while providing convenience to the driver – daily or flat fee Commercial fleet toll collection and management driving value for customers Manage toll, parking and photo enforcement violations for rental car and commercial fleets, reducing violation-related expenses and late fees European toll and violation collection and management for issuing authorities for administrative fees Rental car and commercial fleet title and registration for data management and services fee $261M Service Revenue* United States & a portion of Canada United States & Europe United States * TTM Service Revenue for the period ending December 31, 2021
Government solutions Increasing road safety by changing driver behavior Red-Light Safety Cameras Speed Safety Cameras Stop-Arm Safety Cameras Bus Lane Cameras Capture and process images and video of vehicles running red lights Capture and process images and video of vehicles exceeding speed limits Capture and process images and video of vehicles illegally passing school buses Capture and process images and video of vehicles violating city bus lane restrictions $228M Service + $55M Product = $283M Total Revenue* * TTM Revenue for the period ending December 31, 2021
Why invest in verra mobility? Leadership, business model and strong financial performance A market leader with highly differentiated platforms Leading provider of road safety cameras in the U.S. Leading provider of toll and violation management to rental car and fleet management companies in U.S. Contracted, reoccurring revenue business model Contracts with the three largest U.S. rental car companies Large install base = reoccurring revenue Proven financial performance Solid financial results with robust margins Historically strong free cash flow conversion CAGR for service revenue from 2017-2021 = 21% Platform for future growth European expansion M&A
Service CAGR 21% Proven financial performance Strong revenue and profitability create beneficial cash flow Revenue Adj EBITDA & Margins Net Debt & Leverage (1) Strategy Verra Mobility generates a substantial amount of free cash flow Investing that cash flow back into the company for growth is an important part of our strategy We build organic growth through new markets, new customers or expanding with existing customers M&A has been part of our historical growth and it’s likely to be part of our future growth Revenue Revenue includes growth from acquisitions as follows: 2018 Service Revenue growth includes $114M from the acquisitions of HTA and EPC, and the remaining $23M of growth was organic 2019 Service Revenue growth includes $19M from acquisitions of HTA and EPC early in 2018. The remaining $33M of growth was organic 2021 Service Revenue and Product Revenue include $32.8M and $5.2M, respectively, from the acquisition of Redflex on June 18th. The December 7th acquisition of T2 Systems contributed $4.0M in Service Revenue and $2.6M in Product Revenue. Adj EBITDA Acquisitions have contributed to our overall profitability, but due to aggressive integration strategies we don’t carry separate cost structures and therefore cannot report the impact of Adj. EBITDA from acquisitions Adj EBITDA CAGR 29% 1 As of December 31, 2021, we had $25.0 million in outstanding borrowings on the Revolver, which was repaid in full in January 2022. Excluding the $25.0 million under the revolver, net leverage would be 4.2x
Future growth Verra Mobility has multiple levers for sustained growth Further migration to cashless and all-electronic tolling Intensified public attention given to traffic safety issues for drivers, pedestrians, bicyclists and law enforcement Benefit from Strong Industry Tailwind 1 Leverage existing capabilities to further penetrate ride and car sharing markets Collaborate with OEMs to connect directly to vehicles electronically, including autonomous vehicles Expand Mobility Platform 2 European Tolling & Violations has a large addressable market Natural extension of existing products to European fleet vehicles with existing Verra Mobility customers Expand Globally 3 Increase competitive positioning and strengthen portfolio with highly strategic acquisitions Create value through successful integration and synergy realization Pursue Accretive Acquisitions 4
M&A principles Evaluation Criteria Strategic Fit Connect all activities to Verra Mobility’s strategy Find opportunities where Verra Mobility’s and the target’s assets, when combined, can create unique value Financial Discipline Protect Verra Mobility’s capital: seek returns above the cost of capital required for the deal Integration Focus Establish close partnership with the broader organization Ensure cultural fit and change management discipline Establish processes for short and long-term execution and accountability 1 2 3 Programmatic Process Develop a robust and replicable process to identify, execute, and integrate firms into Verra Mobility Discovery Mindset Cultivate a mindset of discovery; seek to uncover asymmetric information Generate a robust pipeline of potential deals through research, networks, internal contacts, etc. Strong views, weakly held 4 5 Strategic Fit Financial Discipline Integration Focus Programmatic Process Discovery Mindset
APPENDIX
Verra Mobility Quarterly Results 2020 - 2021 Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Full Year 2021 Service revenue $99.5 $62.8 $83.0 $91.0 $336.3 $89.8 $116.4 $141.8 $144.8 $492.8 Product sales 17.2 17.0 13.9 9.2 57.3 0.1 12.2 20.3 25.1 57.7 Total revenue $116.7 $79.8 $96.9 $100.2 $393.6 $89.9 $128.7 $162.1 $170.0 $550.6 Cost of service revenue 1.2 1.0 0.9 0.8 4.0 0.9 1.3 1.4 1.7 5.3 Cost of product sales 8.7 9.1 7.1 4.7 29.6 0.0 6.1 9.4 14.2 29.8 Operating expenses 32.3 26.7 26.5 30.2 115.7 30.5 36.4 48.3 48.1 163.4 Selling, general and administrative expenses 25.9 20.8 17.5 25.4 89.7 28.4 26.2 31.6 37.2 123.4 Depreciation, amortization, and (gain) loss on disposal of assets, net 29.2 29.2 29.6 28.8 116.8 28.3 27.0 29.5 32.0 116.8 Total costs and expenses $97.3 $86.8 $81.6 $90.1 $355.8 $88.1 $97.2 $120.2 $133.2 $438.7 Income (loss) from operations 19.4 (7.0) 15.3 10.1 37.8 1.8 31.5 41.9 36.7 111.9 Interest expense, net 12.5 9.5 9.6 9.3 40.9 9.2 11.7 11.6 12.5 44.9 Change in fair value of private placement warrants (15.5) 8.3 (4.4) 12.7 1.1 2.1 8.1 (5.1) 2.5 7.6 Tax receivable agreement adj - 4.4 - 2.4 6.9 - 1.7 - (2.7) (1.0) Loss on extinguishment of debt - - - - - 5.3 - - - 5.3 Other (income) expense, net (2.9) (1.5) (5.0) (2.5) (11.9) (3.0) (2.8) (3.5) (3.6) (12.9) Total other expense ($5.9) $20.8 $0.2 $21.9 $37.0 $13.6 $18.6 $3.1 8.7 44.0 Income (loss) before income taxes 25.4 (27.7) 15.0 (11.8) 0.9 (11.8) 12.9 38.8 28.0 67.9 Income tax provision (benefit) 3.2 (4.0) 4.0 2.3 5.4 (2.9) 8.9 11.5 8.9 26.5 Net (loss) income $22.1 ($23.7) $11.1 ($14.1) ($4.6) ($8.9) $4.0 $27.3 $19.1 $41.4 Bridge to adj. EBITDA Net (loss) income $22.1 ($23.7) $11.1 ($14.1) ($4.6) ($8.9) $4.0 $27.3 $19.1 $41.4 Interest expense, net 12.5 9.5 9.6 9.3 40.9 9.2 11.7 11.6 12.5 44.9 Income tax provision (benefit) 3.2 (4.0) 4.0 2.3 5.4 (2.9) 8.9 11.5 8.9 26.5 Depreciation and amortization 29.3 29.2 29.4 28.7 116.6 28.2 27.0 29.5 32.0 116.8 EBITDA $67.1 $11.0 $54.1 $26.2 $158.3 $25.6 $51.6 $80.0 $72.5 $229.6 Transaction and other related 0.5 0.1 0.1 1.2 1.9 4.1 3.3 2.7 3.8 14.0 Transformation expense – 0.5 0.6 (0.0) 1.1 0.3 0.4 0.8 0.2 1.7 Loss on extinguishment of debt – – – – – 5.3 - - - 5.3 TRA adjustment – 4.4 – 2.4 6.9 – 1.7 - (2.7) (1.0) Change in fair value of private placement warrants (15.5) 8.3 (4.4) 12.7 1.1 2.1 8.1 (5.1) 2.5 7.6 Stock-based compensation 2.8 3.3 3.2 3.4 12.6 2.9 3.6 3.7 3.6 13.8 Adjusted EBITDA $54.9 $27.6 $53.5 $45.8 $181.8 $40.3 $68.6 $82.1 $80.0 $270.9
Segment Results of Operations 2020 - 2021 Commercial Services Parking Solutions Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Full Year 2021 Segment Total Revenue Commercial Services $61.2 $27.3 $44.2 $48.2 $180.9 $45.7 $66.5 $77.3 $71.5 $260.9 Segment Adj EBITDA Commercial Services $33.6 $7.3 $31.0 $25.2 $97.2 $22.6 $42.8 $51.3 $43.8 $160.4 Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Full Year 2021 Segment Total Revenue Government Solutions $55.5 $52.5 $52.8 $52.0 $212.7 $44.2 $62.2 $84.8 $92.0 $283.2 Segment Adj EBITDA Government Solutions $21.2 $20.3 $22.5 $20.6 $84.7 $17.8 $25.8 $30.7 $33.6 $107.9 Unaudited ($ in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Full Year 2021 Total Revenue Parking Solutions $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $6.5 $6.5 Adj EBITDA Parking Solutions $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $2.6 $2.6 Government Solutions
Verra Mobility Adj. Pro Forma Revenue Reconciliation 2017 - 2018 Unaudited ($ in millions) 2017 2018 * Verra Mobility (Pre-HTA, Pre-EPC) Adj. Revenue $232.4 $370.1 HTA Adj. Revenue 103.7 15.8 EPC Reported Revenue 12.6 3.0 Verra Mobility Adj. Pro Forma Revenue $348.7 $388.9 Verra Mobility * Note: Fiscal year end December 31st. HTA and EPC based on Q1 for 2018. See following appendix pages for reconciliation of Verra Mobility (Pre-HTA, Pre-EPC), HTA and EPC.
Verra Mobility Adj. Pro Forma Revenue Reconciliation 2017 - 2018 Unaudited ($ in millions) 2017 2018 Verra Mobility (Pre-HTA, Pre-EPC) Reported Services Revenue $228.2 $365.1 Adjustments: Non-cash Amortization of Contract Incentive 0.3 0.0 Sunshine State Tag Agency, Inc. Pre-acquisition Results 0.0 0.0 Verra Mobility (Pre-HTA, Pre-EPC) Adjusted Services Revenue $228.5 $365.1 Verra Mobility (Pre-HTA, Pre-EPC) Reported Product Revenue 3.9 5.1 Verra Mobility (Pre-HTA, Pre-EPC) Total Adjusted Revenue $232.4 $370.1 HTA Reported Revenue $101.4 $15.8 Adjustments: Non-cash Amortization of Contract Incentive 2.3 0.0 HTA Adjusted Revenue $103.7 $15.8 EPC Reported Revenue $12.6 $3.0 Total Adj. Pro Forma Revenue $348.7 $388.9
Verra Mobility Adj. Pro Forma EBITDA Reconciliation 2017 - 2018 Verra Mobility Unaudited ($ in millions) 2017 2018 * Verra Mobility (Pre-HTA, Pre-EPC) Adj. EBITDA $97.9 $197.6 HTA Adj. EBITDA 80.9 10.7 EPC Adj. EBITDA 5.0 1.2 Verra Mobility Adj. Pro Forma EBITDA $183.8 $209.5 * Note: Fiscal year end December 31st. HTA and EPC based on Q1 for 2018. See following appendix pages for reconciliation of Verra Mobility (Pre-HTA, Pre-EPC), HTA and EPC.
Verra Mobility (Pre-HTA, Pre-EPC) Adj. EBITDA Reconciliation 2017 - 2018 Verra Mobility (Pre-HTA, Pre-EPC) Unaudited ($ in millions) 2017 2018 Net Income $19.5 ($58.4) Definitional Adjustments: Depreciation and amortization 45.7 103.3 Interest expense, net 21.7 69.6 Income taxes (29.4) (16.2) Total definitional adjustments $38.0 $156.7 Reported EBITDA $57.5 $98.3 Adjustments: Transaction and other related expenses 32.0 56.4 Transformation expenses 3.9 8.8 Loss on extinguishment of debt 0.0 26.5 Sponsor Fees and expenses 4.2 5.4 Non-cash amortization of contract inducement 0.3 0.0 Stock-based compensation 0.0 2.3 Total adjustments $40.4 $99.4 Adjusted EBITDA $97.9 $197.6
HTA and EPC Adj. EBITDA Reconciliation 2017 HTA Unaudited ($ in millions) 2017 Net Income $67.6 Definitional Adjustments: Depreciation and amortization 2.1 Interest expense, net 0.1 Income taxes 0.4 Total definitional adjustments $2.6 Reported EBITDA $70.2 Adjustments: Extraordinary adjustments - primarily seller expenses 2.5 Contract incentive – non-cash amortization 2.3 Gain/loss on sale of equipment, net 0.0 Pro forma cc rebates 3.5 Capitalized internal labor 2.0 Other 0.4 Total adjustments 10.7 Adjusted EBITDA $80.9 EPC Unaudited ($ in millions) 2017 Net Income $3.6 Definitional Adjustments: Depreciation and amortization 0.0 Interest expense, net (0.0) Income taxes 1.0 Total definitional adjustments $1.0 Reported EBITDA $4.6 Adjustments: Extraordinary expenses add back 0.3 Legal fees – appointment of new directors 0.0 Board of directors fees add back 0.0 Total adjustments 0.3 Adjusted EBITDA $5.0
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