8-K
0001682745false00016827452023-05-042023-05-040001682745us-gaap:WarrantMember2023-05-042023-05-04

 

 

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 4, 2023

 

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

Warrants to purchase Class A Common Stock

 

VRRMW

 

OTC Pink Marketplace

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.

 

 

 

1


 

Item 2.02 Results of Operations and Financial Condition.

On May 4, 2023, Verra Mobility Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
 

Item 7.01 Regulation FD Disclosure.

The Company will host a conference call and live webcast to discuss its first quarter 2023 financial results on May 4, 2023, at 5:00 p.m. Eastern time. Live and archived webcasts of the presentation will also be available on the Company’s investor relations website at ir.verramobility.com, although the Company reserves the right to discontinue that availability at any time.

On May 4, 2023, the Company posted supplemental investor materials on its investor relations website. The Company uses its investor relations website as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the Company’s investor relations website in addition to following its press releases, SEC filings and public conference calls and webcasts.

The information being furnished pursuant to Item 2.02, including Exhibit 99.1, and Item 7.01 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit Number

 

Description of Exhibits

 

99.1

 

Press Release, dated May 4, 2023, issued by Verra Mobility Corporation.

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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: May 4, 2023

Verra Mobility Corporation

 

 

 

 

By:

/s/ Craig Conti

 

Name:

Craig Conti

 

Title:

Chief Financial Officer

 

3


EX-99

 

 

Exhibit 99.1

 

https://cdn.kscope.io/37bb5fc99ea342bb5576e83a6ec47c6a-img124761870_0.jpg 

Verra Mobility Announces First Quarter 2023 Financial Results

 

Total revenue of $191.9 million
Net income of $4.6 million
Generated cash flows from operations of $45.2 million
Reaffirming 2023 guidance

 

MESA, Ariz., May 4, 2023 /PRNewswire/ – Verra Mobility Corporation (NASDAQ: VRRM), a leading provider of smart mobility technology solutions, announced today the financial results for the first quarter ended March 31, 2023.

 

“We delivered another strong quarter financially and continued the operating momentum we demonstrated throughout 2022,” said David Roberts, President and CEO, Verra Mobility. “We are benefitting from robust travel demand that has returned to pre-pandemic volume as well as nationwide efforts to improve road safety through investments in automated safety enforcement technology. I am incredibly excited about our future we are well-positioned in large, growing and attractive markets and we have established a proven operating model to drive consistent execution.”

First Quarter 2023 Financial Highlights

Revenue: Total revenue for the first quarter of 2023 was $191.9 million, an increase of 13% compared to $170.4 million for the first quarter of 2022. Service revenue growth was 15% due to increases in travel volume and related tolling activity in the Commercial Services segment which grew 17%, and the growth in service revenue from our Government Solutions segment, which increased 14% and was driven by the expansion of speed programs. Parking Solutions service revenue increased 10% due to increases in our software as a service (SaaS) product offerings and various services related to parking management solutions.
Net income: Net income for the first quarter of 2023 was $4.6 million, or $0.03 per share based on 153.1 million diluted weighted average shares outstanding. Net income for the comparable 2022 period was $10.0 million, or $0.06 per share, based on 160.7 million diluted weighted average shares outstanding.
Adjusted Earnings Per Share (EPS): Adjusted EPS for the first quarter of 2023 was $0.26 per share compared to $0.22 per share for the first quarter of 2022.
Adjusted EBITDA: Adjusted EBITDA was $87.9 million for the first quarter of 2023 compared to $75.3 million for the same period last year. Adjusted EBITDA margin was 46% of total revenue for 2023 and 44% for 2022. The expansion in Adjusted EBITDA margins was driven primarily by revenue contribution mix and increased volume leverage across our business segments.

1

 


 

 

We report our results of operations based on three operating segments:

Commercial Services offers 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 automated safety solutions to municipalities, school districts and government agencies, including services and technology that enable photo enforcement related to speed, red-light, school bus and city bus lane management.
Parking Solutions provides an integrated suite of parking software and hardware solutions to universities, municipalities, parking operators, healthcare facilities and transportation hubs in the United States and Canada.

First Quarter 2023 Segment Detail

The Commercial Services segment generated total revenue of $85.6 million, a 17% increase compared to $73.5 million in the same period in 2022. Segment profit was $53.6 million, a 15% increase from $46.6 million in the prior year. The increases in revenue and profit compared to the prior period resulted from increased travel volume and the continued adoption to the all-inclusive fee structure as well as the increase in enrolled vehicles and higher tolling activity for our FMC customers. The segment profit margin was 63% for 2023 and 63% for 2022.
The Government Solutions segment generated total revenue of $85.9 million, a 9% increase compared to $78.8 million in the same period in 2022. The increase was primarily driven by the expansion of speed programs, as speed is the largest product in this segment. The remaining increase is attributable to expansions across red-light, school bus stop arm, and bus lane programs. The segment profit was $31.5 million in 2023 compared to $25.5 million in the prior year with segment profit margins of 37% for 2023 and 32% for 2022. The increase in segment profit and margins is primarily attributable to the increase in recurring service revenue and a reduction in bad debt expense due to improved cash collections.
The Parking Solutions segment generated total revenue of $20.3 million a 12% increase compared to $18.1 million in the same period in 2022. The segment profit was $2.9 million compared to $3.2 million in the prior year with segment profit margins of 14% for 2023 and 18% for 2022. The decline in segment profit and margins is primarily attributable to a higher mix of hardware versus SaaS and services revenue.

Liquidity: As of March 31, 2023, cash and cash equivalents were $64.3 million, and we generated $45.2 million in cash flows from operations for 2023.

Interest Rate Swap

In December 2022, we entered into a cancellable interest rate swap agreement to hedge our exposure to interest rate fluctuations associated with the LIBOR (now transitioned to Term Secured Overnight Financing Rate) portion of the variable interest rate on our 2021 Term Loan. Under the interest rate swap agreement, we pay a fixed rate and the counterparty pays a variable interest rate which is net settled. The notional amount on the interest rate swap is $675.0 million. We have the option to terminate the interest rate swap agreement starting in December 2023, and monthly thereafter until December 2025 in the event interest rates decrease. Any changes in the fair value of the derivative instrument (including accrued interest) and related cash payments are recorded in the condensed consolidated statements of operations within the loss on interest rate swap line item. We recorded a $2.8 million loss during the three months ended March 31, 2023, of which approximately $1.6 million is associated with the derivative instrument re-measured to fair value at the end of the reporting period and $1.2 million relates to the monthly cash payments.

2023 Full Year Guidance

2

 


 

 

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.

We are reaffirming the fiscal year 2023 guidance we issued on March 1, 2023, based on our financial results for the first quarter of 2023 and our current outlook for the remainder of the year, as follows:

Total revenue of $780 million to $800 million
Adjusted EBITDA of $360 million to $370 million
Adjusted EPS of $1.00 to $1.10
Free Cash Flow of $135 million to $155 million

 

Conference Call Details

Date: May 4, 2023

Time: 5:00 p.m. Eastern Time

U.S. and Canadian Callers Dial-in: 1-888-886-7786

Outside of U.S. and Canada Dial-in: 1-416-764-8658 for international callers with conference ID 53331233

Request a return call: Available by clicking on the following link and requesting a return call: callme.viavid.com

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. ET on May 18, 2023, by dialing 1-844-512-2921 for the U.S. or Canada, and 1-412-317-6671 for international callers and entering passcode 53331233. In addition, an archived webcast will be available in the “News & Events” section of the Investor Relations website at http://ir.verramobility.com.

 

About Verra Mobility

Verra Mobility is a leading provider of smart mobility technology solutions that make transportation safer, smarter and more connected. We sit at the center of the mobility ecosystem, bringing together vehicles, hardware, software, data and people to enable safe, efficient solutions for customers globally. Verra Mobility’s transportation safety systems and parking management solutions protect lives, improve urban and motorway mobility and support healthier communities. We also solve complex payment, utilization and compliance challenges for fleet owners and rental car companies. Headquartered in Arizona, Verra Mobility operates in North America, Europe, Asia and Australia. For more information, please 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 2023 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) customer concentration in our Commercial Services and Government Solutions segments; (2) our ability to manage our substantial level of indebtedness; (3) risks and uncertainties related to our government contracts, including legislative changes, termination rights, delays in payments, audits and investigations; (4) decreases in the prevalence of automated and other similar methods of photo enforcement, parking solutions or the use of tolling; (5) our ability to keep up with technological developments

3

 


 

 

and changing customer preferences; (6) our ability to compete in a highly competitive and rapidly evolving market; (7) decreased interest in outsourcing from our customers; (8) the success of our new products and changes to existing products and services; (9) our ability to successfully implement our acquisition strategy or integrate acquisitions; (10) failure in or breaches of our networks or systems, including as a result of cyber-attacks; (11) our ability to manage the risks, uncertainties and exposures related to our international operations; (12) our ability to acquire necessary intellectual property and adequately protect our existing intellectual property; (13) risks and uncertainties related to our share repurchase program; (14) our reliance on a limited number of third-party vendors and service providers; (15) our ability to maintain an effective system of internal controls; (16) risks and uncertainties related to litigation, disputes and regulatory investigations; (16) our ability to properly perform under our contracts and otherwise satisfy our customers; (17) the impact of COVID-19 on our business and results of operations; and (18) 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.

Additional Information

We periodically provide information for investors on our corporate website, www.verramobility.com, and our investor relations website, ir.verramobility.com.

We intend to use our website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts.

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 or Adjusted EPS, both of which are included in our 2023 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 as well as Adjusted EPS to net income per share, 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.

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

4

 


 

 

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 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 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.

 

 

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VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

($ in thousands except per share data)

 

March 31,
2023

 

 

December 31,
2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

64,267

 

 

$

105,204

 

Restricted cash

 

 

3,550

 

 

 

3,911

 

Accounts receivable (net of allowance for credit losses of $16.5 million and
$15.9 million at March 31, 2023 and December 31, 2022, respectively)

 

 

178,251

 

 

 

163,786

 

Unbilled receivables

 

 

34,184

 

 

 

30,782

 

Inventory

 

 

18,923

 

 

 

19,307

 

Prepaid expenses and other current assets

 

 

33,258

 

 

 

39,604

 

Total current assets

 

 

332,433

 

 

 

362,594

 

Installation and service parts, net

 

 

26,481

 

 

 

22,923

 

Property and equipment, net

 

 

111,376

 

 

 

109,775

 

Operating lease assets

 

 

38,012

 

 

 

37,593

 

Intangible assets, net

 

 

355,678

 

 

 

377,420

 

Goodwill

 

 

834,299

 

 

 

833,480

 

Other non-current assets

 

 

12,612

 

 

 

12,484

 

Total assets

 

$

1,710,891

 

 

$

1,756,269

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

71,475

 

 

$

79,869

 

Deferred revenue

 

 

31,105

 

 

 

31,164

 

Accrued liabilities

 

 

52,044

 

 

 

48,847

 

Tax receivable agreement liability, current portion

 

 

4,994

 

 

 

4,994

 

Current portion of long-term debt

 

 

9,019

 

 

 

21,935

 

Total current liabilities

 

 

168,637

 

 

 

186,809

 

Long-term debt, net of current portion

 

 

1,140,712

 

 

 

1,190,045

 

Operating lease liabilities, net of current portion

 

 

33,338

 

 

 

33,362

 

Tax receivable agreement liability, net of current portion

 

 

50,900

 

 

 

50,900

 

Private placement warrant liabilities

 

 

38,667

 

 

 

24,066

 

Asset retirement obligations

 

 

13,411

 

 

 

12,993

 

Deferred tax liabilities, net

 

 

20,920

 

 

 

21,149

 

Other long-term liabilities

 

 

7,198

 

 

 

5,875

 

Total liabilities

 

 

1,473,783

 

 

 

1,525,199

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Preferred stock, $0.0001 par value

 

 

 

 

 

 

Common stock, $0.0001 par value

 

 

15

 

 

 

15

 

Common stock contingent consideration

 

 

36,575

 

 

 

36,575

 

Additional paid-in capital

 

 

306,974

 

 

 

305,423

 

Accumulated deficit

 

 

(93,501

)

 

 

(98,078

)

Accumulated other comprehensive loss

 

 

(12,955

)

 

 

(12,865

)

Total stockholders' equity

 

 

237,108

 

 

 

231,070

 

Total liabilities and stockholders' equity

 

$

1,710,891

 

 

$

1,756,269

 

 

 

6

 


 

 

VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(Unaudited)

 

 

 

Three Months Ended March 31,

 

($ in thousands, except per share data)

 

2023

 

 

2022

 

Service revenue

 

$

184,698

 

 

$

161,134

 

Product sales

 

 

7,205

 

 

 

9,251

 

Total revenue

 

 

191,903

 

 

 

170,385

 

Cost of service revenue

 

 

4,230

 

 

 

3,779

 

Cost of product sales

 

 

5,383

 

 

 

5,995

 

Operating expenses

 

 

61,843

 

 

 

51,063

 

Selling, general and administrative expenses

 

 

40,013

 

 

 

41,635

 

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

 

 

30,333

 

 

 

35,907

 

Total costs and expenses

 

 

141,802

 

 

 

138,379

 

Income from operations

 

 

50,101

 

 

 

32,006

 

Interest expense, net

 

 

22,687

 

 

 

14,279

 

Change in fair value of private placement warrants

 

 

14,601

 

 

 

3,734

 

Loss on interest rate swap

 

 

2,798

 

 

 

 

Loss on extinguishment of debt

 

 

1,349

 

 

 

 

Other income, net

 

 

(3,756

)

 

 

(2,866

)

Total other expenses

 

 

37,679

 

 

 

15,147

 

Income before income taxes

 

 

12,422

 

 

 

16,859

 

Income tax provision

 

 

7,845

 

 

 

6,819

 

Net income

 

$

4,577

 

 

$

10,040

 

Other comprehensive (loss) income:

 

 

 

 

 

 

Change in foreign currency translation adjustment

 

 

(90

)

 

 

2,708

 

Total comprehensive income

 

$

4,487

 

 

$

12,748

 

Net income per share:

 

 

 

 

 

 

Basic

 

$

0.03

 

 

$

0.06

 

Diluted

 

$

0.03

 

 

$

0.06

 

Weighted average shares outstanding:

 

 

 

 

 

 

Basic

 

 

149,165

 

 

 

156,130

 

Diluted

 

 

153,129

 

 

 

160,749

 

 

 

7

 


 

 

VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

Three Months Ended March 31,

 

($ in thousands)

 

2023

 

 

2022

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net income

 

$

4,577

 

 

$

10,040

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

30,309

 

 

 

35,675

 

Amortization of deferred financing costs and discounts

 

 

1,277

 

 

 

1,306

 

Change in fair value of private placement warrants

 

 

14,601

 

 

 

3,734

 

Loss on interest rate swap

 

 

1,552

 

 

 

 

Loss on extinguishment of debt

 

 

1,349

 

 

 

 

Credit loss expense

 

 

1,697

 

 

 

3,505

 

Deferred income taxes

 

 

(2,249

)

 

 

(18,771

)

Stock-based compensation

 

 

3,378

 

 

 

4,446

 

Other

 

 

8

 

 

 

354

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(16,222

)

 

 

(14,300

)

Unbilled receivables

 

 

(3,464

)

 

 

(10,265

)

Inventory

 

 

180

 

 

 

(5,722

)

Prepaid expenses and other assets

 

 

6,232

 

 

 

8,235

 

Deferred revenue

 

 

95

 

 

 

46

 

Accounts payable and other current liabilities

 

 

(4,291

)

 

 

(477

)

Other liabilities

 

 

6,188

 

 

 

13,441

 

Net cash provided by operating activities

 

 

45,217

 

 

 

31,247

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Payment of contingent consideration

 

 

 

 

 

(412

)

Payments for interest rate swap

 

 

(1,246

)

 

 

 

Purchases of installation and service parts and property and equipment

 

 

(18,372

)

 

 

(11,478

)

Cash proceeds from the sale of assets

 

 

34

 

 

 

25

 

Net cash used in investing activities

 

 

(19,584

)

 

 

(11,865

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

Repayment on the revolver

 

 

 

 

 

(25,000

)

Repayment of long-term debt

 

 

(64,755

)

 

 

(2,255

)

Payment of debt issuance costs

 

 

(44

)

 

 

(54

)

Proceeds from the exercise of stock options

 

 

699

 

 

 

93

 

Payment of employee tax withholding related to RSUs and PSUs vesting

 

 

(2,526

)

 

 

(1,436

)

Net cash used in financing activities

 

 

(66,626

)

 

 

(28,652

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(305

)

 

 

2,231

 

Net decrease in cash, cash equivalents and restricted cash

 

 

(41,298

)

 

 

(7,039

)

Cash, cash equivalents and restricted cash - beginning of period

 

 

109,115

 

 

 

104,432

 

Cash, cash equivalents and restricted cash - end of period

 

$

67,817

 

 

$

97,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 


 

 

VERRA MOBILITY CORPORATION

 

ADJUSTED EBITDA RECONCILIATION (Unaudited)

 

 

 

Three Months Ended March 31,

 

($ in thousands)

 

2023

 

 

2022

 

Net income

 

$

4,577

 

 

$

10,040

 

Interest expense, net

 

 

22,687

 

 

 

14,279

 

Income tax provision

 

 

7,845

 

 

 

6,819

 

Depreciation and amortization

 

 

30,309

 

 

 

35,675

 

EBITDA

 

 

65,418

 

 

 

66,813

 

Transaction and other related expenses

 

 

268

 

 

 

216

 

Transformation expenses

 

 

59

 

 

 

86

 

Change in fair value of private placement warrants (i)

 

 

14,601

 

 

 

3,734

 

Loss on interest rate swap (ii)

 

 

2,798

 

 

 

 

Loss on extinguishment of debt (iii)

 

 

1,349

 

 

 

 

Stock-based compensation (iv)

 

 

3,378

 

 

 

4,446

 

Adjusted EBITDA

 

$

87,871

 

 

$

75,295

 

 

(i)
This consists of adjustments to the private placement warrants liability from the re-measurement to fair value at the end of each reporting period.
(ii)
Loss on interest rate swap relates to the loss associated with the derivative instrument re-measured to fair value at the end of the reporting period and the related monthly cash payments.
(iii)
Loss on extinguishment of debt consists of the write-off of pre-existing original issue discounts and deferred financing costs associated with the repayment of debt.
(iv)
Stock-based compensation represents the non-cash charge related to the issuance of awards under the Verra Mobility Corporation 2018 Equity Incentive Plan.

 

FREE CASH FLOW (Unaudited)

 

 

 

Three Months Ended March 31,

 

($ in thousands)

 

2023

 

 

2022

 

Net cash provided by operating activities

 

$

45,217

 

 

$

31,247

 

Purchases of installation and service parts and property and equipment

 

 

(18,372

)

 

 

(11,478

)

Free cash flow

 

$

26,845

 

 

$

19,769

 

 

9

 


 

 

 

 

ADJUSTED EPS (Unaudited)

 

 

 

Three Months Ended March 31,

 

(In thousands, except per share data)

 

2023

 

 

2022

 

Net income

 

$

4,577

 

 

$

10,040

 

Amortization of intangibles

 

 

21,967

 

 

 

27,331

 

Transaction and other related expenses

 

 

268

 

 

 

216

 

Transformation expenses

 

 

59

 

 

 

86

 

Change in fair value of private placement warrants

 

 

14,601

 

 

 

3,734

 

Change in fair value of interest rate swap

 

 

1,552

 

 

 

 

Loss on extinguishment of debt

 

 

1,349

 

 

 

 

Stock-based compensation

 

 

3,378

 

 

 

4,446

 

Total adjustments before income tax effect

 

 

43,174

 

 

 

35,813

 

Income tax effect on adjustments

 

 

(7,958

)

 

 

(10,265

)

Total adjustments after income tax effect

 

 

35,216

 

 

 

25,548

 

Adjusted Net Income

 

$

39,793

 

 

$

35,588

 

 

 

 

 

 

 

 

Adjusted EPS

 

$

0.26

 

 

$

0.22

 

Diluted weighted average shares outstanding

 

 

153,129

 

 

 

160,749

 

 

Beginning in the third quarter of 2022, we removed the (i) change in fair value of private placement warrants (ii) change in fair value of interest rate swap and (iii) loss on extinguishment of debt from total adjustments before income tax effect prior to applying our annual estimated effective income tax rate to calculate the income tax effect on adjustments. These discrete items are being removed because they do not impact taxable income. In addition, we began using our annual estimated effective tax rate in lieu of the period-to-date effective tax rate from our consolidated statements of operations, in calculating the income tax effect on total adjustments to net income. We believe that our annual estimated effective income tax rate provides investors a more meaningful effective tax rate than our period-to-date effective tax rate, which included the discrete items named above.
 

 

 

Investor Relations Contact

Mark Zindler

mark.zindler@verramobility.com

 

 

 

 

10