- Total revenue of $209.9
million
- Net income of $30.3 million
- Generated cash flows from operations of $62.4 million
- Renewed Enterprise Mobility Tolling contract
- Increasing 2023 financial guidance
- Board of Directors authorizes $100
million share repurchase program
MESA,
Ariz., Nov. 9, 2023 /PRNewswire/ -- Verra
Mobility Corporation (NASDAQ: VRRM), a leading provider of smart
mobility technology solutions, announced today the financial
results for the third quarter ended September 30, 2023.
"Our team delivered tremendous results for the third quarter,
highlighted by strong recurring revenue growth and free cash flow
generation," said David Roberts,
President and CEO, Verra Mobility.
"Additionally, we delivered on our commitments including renewing a
key customer contract in our Commercial Services business and
continuing to execute a balanced capital allocation strategy. With
our focus on commercial excellence and the favorable trends in the
markets we serve, we are again increasing our financial guidance
and look forward to continuing our positive momentum as we close
out the year."
Third Quarter 2023 Financial Highlights
- Revenue: Total revenue for the third quarter of 2023 was
$209.9 million, an increase of 6%
compared to $197.7 million for the
third quarter of 2022. Service revenue growth was 11% due to
increases in travel volume and related tolling activity in the
Commercial Services segment which grew 14%, and the growth in
service revenue from our Government Solutions segment, which
increased 10% and was driven by the expansion of speed programs.
Parking Solutions service revenue increased 4% 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 third quarter of 2023 was
$30.3 million, or $0.18 per share based on 169.5 million diluted
weighted average shares outstanding. Net income for the comparable
2022 period was $24.6 million, or
$0.15 per share, based on 158.3
million diluted weighted average shares outstanding.
- Adjusted Earnings Per Share (EPS): Adjusted EPS for the
third quarter of 2023 was $0.29 per
share compared to $0.27 per share for
the third quarter of 2022.
- Adjusted EBITDA: Adjusted EBITDA was $97.4 million for the third quarter of 2023
compared to $90.9 million for the
same period last year. Adjusted EBITDA margin was 46% of total
revenue for both 2023 and 2022.
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.
Third Quarter 2023 Segment Detail
- The Commercial Services segment generated total revenue of
$98.1 million, a 14% increase
compared to $86.1 million in the same
period in 2022. Segment profit was $65.3
million, a 16% increase from $56.4
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 of the all-inclusive fee
structure for our rental car company customers as well as the
increase in enrolled vehicles and higher tolling activity for our
fleet management company customers. The segment profit margin was
67% for 2023 and 65% for 2022.
- The Government Solutions segment generated total revenue of
$90.3 million, a 1% increase compared
to $89.7 million in the same period
in 2022. The increase was due to a 10% increase in recurring
service revenue over the prior year quarter, primarily driven by
the expansion of speed programs. The increase in recurring service
revenue was partially offset by a reduction in one-time product
sales compared to the prior year. The segment profit was
$28.6 million in 2023 compared to
$30.4 million in the prior year with
segment profit margins of 32% for 2023 and 34% for 2022. The
decrease in segment profit is primarily attributable to increased
operating expenses associated with enhancing customer-facing
platforms and systems.
- The Parking Solutions segment generated total revenue of
$21.5 million a 2% decrease compared
to $21.9 million in the same period
in 2022 due to a reduction in one-time product sales compared to
the prior year quarter. The segment profit was $3.5 million compared to $4.2 million in the prior year with segment
profit margins of 16% for 2023 and 19% for 2022. The decrease in
segment profit is primarily attributable to increased recurring
service costs.
Liquidity: As of September 30,
2023, cash and cash equivalents were $114.4 million, and we generated $62.4 million in cash flows from operations for
the three months ended September 30,
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 of 5.17% 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 (gain) on interest rate swap line item. We recorded
a $0.1 million loss during the three
months ended September 30, 2023, of
which approximately $0.2 million is
associated with the derivative instrument re-measured to fair value
at the end of the reporting period, netted by $0.1 million related to the net cash received. We
recorded a $1.9 million gain during
the nine months ended September 30,
2023, of which approximately $3.3
million is associated with the derivative instrument
re-measured to fair value at the end of the reporting period,
netted by $1.4 million related to the
monthly cash payments.
Warrants
During the nine months ended September
30, 2023, we processed the exercise of 20 million warrants
in exchange for the issuance of 16,273,406 shares of Class A Common
Stock. There were 14,035,449 shares issued on a cash-basis
resulting in the receipt of $161.4
million in cash proceeds as of September 30, 2023.
Share Repurchases
In November 2022, our Board of
Directors authorized a share repurchase program for up to an
aggregate amount of $100.0 million of
our outstanding shares of Class A Common Stock over an 18-month
period in open market, accelerated share repurchase ("ASR") or
privately negotiated transactions, each as permitted under
applicable rules and regulations, any of which may use pre-arranged
trading plans that are designed to meet the requirements of Rule
10b5-1 of the Exchange Act.
We paid $8.1 million to repurchase
449,432 shares of our Class A Common Stock through open market
transactions during the third quarter of fiscal year 2023, which we
subsequently retired. On September 5,
2023, we used the remaining availability under the share
repurchase program for an ASR and paid approximately $91.9 million to receive an initial delivery of
4,131,551 shares of our Class A Common Stock in accordance with an
ASR agreement with a third-party financial institution. The final
settlement is expected to occur during the first quarter of fiscal
year 2024, at which time, a volume-weighted average price
calculation over the term of the ASR agreement will be used to
determine the final number and the average price of shares
repurchased and retired. We paid a total of $100.0 million for shares repurchases during the
nine months ended September 30,
2023.
New Share Repurchase Program
In October 2023, the Board of
Directors approved a stock repurchase program, which authorizes the
Company to repurchase up to $100
million of its Class A common stock over the next eighteen
months from time to time in open market transactions, accelerated
share repurchases or in privately negotiated transactions, each as
permitted under applicable rules and regulations. Repurchases may
be conducted and may be suspended or terminated at any time without
notice. The extent to which the Company repurchases shares of its
Class A common stock and the timing of such purchases will depend
upon market conditions, the Company's capital position, and other
considerations as may be considered by the Company in its sole
discretion. Repurchases may also be made pursuant to a trading plan
under Rule 10b5-1 under the Securities Exchange Act of 1934, as
amended, which would permit shares to be repurchased when the
Company might otherwise be precluded from doing so because of
self-imposed trading blackout periods or other regulatory
restrictions. The timing and actual number of shares repurchased
will depend on a variety of factors, including price, general
business and market conditions, and alternative investment
opportunities. The repurchase program will be executed consistent
with the Company's capital allocation strategy, which will continue
to prioritize investments to grow the business.
2023 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.
Based on our year-to-date results and our outlook for the
remainder of the year, we are expecting to deliver results as
follows:
|
|
|
|
|
|
Previous
Guidance
|
Updated
Guidance
|
|
Total
Revenue
|
$800 million to $810
million
|
Upper-end of prior
range
|
|
Adjusted
EBITDA
|
$365 million to $370
million
|
Upper-end of prior
range
|
|
Adjusted EPS
|
$1.00 to
$1.10
|
$1.05 to
$1.10
|
|
Free Cash
Flow
|
$145 million to $155
million
|
$145 million to $155
million
|
Conference Call Details
Date: November 9, 2023
Time: 5:00 p.m. Eastern Time
U.S. and Canadian Callers Dial-in: 1-877-407-0784
Outside of U.S. and Canada Dial-in: 1-201-689-8560 for
international callers with conference ID 13741906
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 November 23, 2023, by dialing 1-844-512-2921 for
the U.S. or Canada, and
1-412-317-6671 for international callers and entering passcode
13741906. 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, economic and geopolitical conditions;
customer concentration, demand and spending; new and emerging
technologies; cybersecurity risks; our ability to manage our
substantial level of indebtedness; risks and uncertainties related
to our government contracts, including legislative changes,
termination rights, delays in payments, audits and investigations;
legislative changes; our reliance on a limited number of
third-party vendors and service providers; and 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. In addition, no assurance can be given that any
plan, initiative, projection, goal, commitment, expectation, or
prospect set forth in this release can or will be achieved. 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 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.
VERRA MOBILITY
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
(In thousands,
except per share data)
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
114,379
|
|
|
$
|
105,204
|
|
Restricted
cash
|
|
|
3,951
|
|
|
|
3,911
|
|
Accounts receivable
(net of allowance for credit losses of $17.6 million and
$15.9 million at September 30, 2023 and December 31, 2022,
respectively)
|
|
|
191,753
|
|
|
|
163,786
|
|
Unbilled
receivables
|
|
|
40,069
|
|
|
|
30,782
|
|
Inventory
|
|
|
19,943
|
|
|
|
19,307
|
|
Prepaid expenses and
other current assets
|
|
|
41,197
|
|
|
|
39,604
|
|
Total current
assets
|
|
|
411,292
|
|
|
|
362,594
|
|
Installation and
service parts, net
|
|
|
26,127
|
|
|
|
22,923
|
|
Property and equipment,
net
|
|
|
117,827
|
|
|
|
109,775
|
|
Operating lease
assets
|
|
|
35,299
|
|
|
|
37,593
|
|
Intangible assets,
net
|
|
|
315,754
|
|
|
|
377,420
|
|
Goodwill
|
|
|
832,817
|
|
|
|
833,480
|
|
Other non-current
assets
|
|
|
16,959
|
|
|
|
12,484
|
|
Total assets
|
|
$
|
1,756,075
|
|
|
$
|
1,756,269
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
89,760
|
|
|
$
|
79,869
|
|
Deferred
revenue
|
|
|
34,322
|
|
|
|
31,164
|
|
Accrued
liabilities
|
|
|
59,459
|
|
|
|
48,847
|
|
Tax receivable
agreement liability, current portion
|
|
|
5,007
|
|
|
|
4,994
|
|
Current portion of
long-term debt
|
|
|
9,019
|
|
|
|
21,935
|
|
Total current
liabilities
|
|
|
197,567
|
|
|
|
186,809
|
|
Long-term debt, net of
current portion
|
|
|
1,030,351
|
|
|
|
1,190,045
|
|
Operating lease
liabilities, net of current portion
|
|
|
30,552
|
|
|
|
33,362
|
|
Tax receivable
agreement liability, net of current portion
|
|
|
50,900
|
|
|
|
50,900
|
|
Private placement
warrant liabilities
|
|
|
—
|
|
|
|
24,066
|
|
Asset retirement
obligations
|
|
|
14,075
|
|
|
|
12,993
|
|
Deferred tax
liabilities, net
|
|
|
19,015
|
|
|
|
21,149
|
|
Other long-term
liabilities
|
|
|
9,559
|
|
|
|
5,875
|
|
Total
liabilities
|
|
|
1,352,019
|
|
|
|
1,525,199
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Preferred stock,
$0.0001 par value
|
|
|
—
|
|
|
|
—
|
|
Common stock, $0.0001
par value
|
|
|
17
|
|
|
|
15
|
|
Common stock contingent
consideration
|
|
|
—
|
|
|
|
36,575
|
|
Additional paid-in
capital
|
|
|
549,374
|
|
|
|
305,423
|
|
Accumulated
deficit
|
|
|
(128,909)
|
|
|
|
(98,078)
|
|
Accumulated other
comprehensive loss
|
|
|
(16,426)
|
|
|
|
(12,865)
|
|
Total stockholders'
equity
|
|
|
404,056
|
|
|
|
231,070
|
|
Total liabilities and
stockholders' equity
|
|
$
|
1,756,075
|
|
|
$
|
1,756,269
|
|
VERRA MOBILITY
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
AND COMPREHENSIVE
INCOME
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
(In thousands,
except per share data)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Service
revenue
|
|
$
|
201,029
|
|
|
$
|
180,617
|
|
|
$
|
581,777
|
|
|
$
|
516,253
|
|
Product
sales
|
|
|
8,904
|
|
|
|
17,039
|
|
|
|
24,520
|
|
|
|
39,275
|
|
Total
revenue
|
|
|
209,933
|
|
|
|
197,656
|
|
|
|
606,297
|
|
|
|
555,528
|
|
Cost of service
revenue
|
|
|
5,150
|
|
|
|
4,144
|
|
|
|
13,718
|
|
|
|
11,636
|
|
Cost of product
sales
|
|
|
6,864
|
|
|
|
11,317
|
|
|
|
18,209
|
|
|
|
25,638
|
|
Operating
expenses
|
|
|
68,873
|
|
|
|
60,536
|
|
|
|
196,373
|
|
|
|
166,795
|
|
Selling, general and
administrative expenses
|
|
|
42,276
|
|
|
|
41,126
|
|
|
|
125,494
|
|
|
|
122,913
|
|
Depreciation,
amortization and (gain) loss on disposal of assets, net
|
|
|
27,597
|
|
|
|
35,035
|
|
|
|
87,018
|
|
|
|
105,881
|
|
Total costs and
expenses
|
|
|
150,760
|
|
|
|
152,158
|
|
|
|
440,812
|
|
|
|
432,863
|
|
Income from
operations
|
|
|
59,173
|
|
|
|
45,498
|
|
|
|
165,485
|
|
|
|
122,665
|
|
Interest expense,
net
|
|
|
20,384
|
|
|
|
20,260
|
|
|
|
65,842
|
|
|
|
49,024
|
|
Change in fair value of
private placement warrants
|
|
|
(553)
|
|
|
|
(2,267)
|
|
|
|
24,966
|
|
|
|
(5,133)
|
|
Tax receivable
agreement liability adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(965)
|
|
Loss (gain) on interest
rate swap
|
|
|
60
|
|
|
|
—
|
|
|
|
(1,947)
|
|
|
|
—
|
|
Loss (gain) on
extinguishment of debt
|
|
|
1,975
|
|
|
|
(3,005)
|
|
|
|
3,533
|
|
|
|
(3,005)
|
|
Other income,
net
|
|
|
(4,498)
|
|
|
|
(2,462)
|
|
|
|
(12,766)
|
|
|
|
(9,367)
|
|
Total other
expenses
|
|
|
17,368
|
|
|
|
12,526
|
|
|
|
79,628
|
|
|
|
30,554
|
|
Income before income
taxes
|
|
|
41,805
|
|
|
|
32,972
|
|
|
|
85,857
|
|
|
|
92,111
|
|
Income tax
provision
|
|
|
11,497
|
|
|
|
8,396
|
|
|
|
31,864
|
|
|
|
27,854
|
|
Net
income
|
|
$
|
30,308
|
|
|
$
|
24,576
|
|
|
$
|
53,993
|
|
|
$
|
64,257
|
|
Other comprehensive
loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in foreign
currency translation adjustment
|
|
|
(4,189)
|
|
|
|
(8,167)
|
|
|
|
(3,561)
|
|
|
|
(15,840)
|
|
Total comprehensive
income
|
|
$
|
26,119
|
|
|
$
|
16,409
|
|
|
$
|
50,432
|
|
|
$
|
48,417
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
$
|
0.35
|
|
|
$
|
0.42
|
|
Diluted
|
|
$
|
0.18
|
|
|
$
|
0.15
|
|
|
$
|
0.34
|
|
|
$
|
0.38
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
168,089
|
|
|
|
151,429
|
|
|
|
156,196
|
|
|
|
154,067
|
|
Diluted
|
|
|
169,497
|
|
|
|
158,304
|
|
|
|
157,133
|
|
|
|
160,433
|
|
VERRA MOBILITY
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
($ in
thousands)
|
|
2023
|
|
|
2022
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
30,308
|
|
|
$
|
24,576
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
27,530
|
|
|
|
35,079
|
|
Amortization of
deferred financing costs and discounts
|
|
|
1,131
|
|
|
|
1,429
|
|
Change in fair value
of private placement warrants
|
|
|
(553)
|
|
|
|
(2,267)
|
|
Loss on interest rate
swap
|
|
|
202
|
|
|
|
—
|
|
Loss (gain) on
extinguishment of debt
|
|
|
1,975
|
|
|
|
(3,005)
|
|
Credit loss
expense
|
|
|
2,597
|
|
|
|
3,856
|
|
Deferred income
taxes
|
|
|
(2,503)
|
|
|
|
(1,610)
|
|
Stock-based
compensation
|
|
|
4,443
|
|
|
|
4,644
|
|
Other
|
|
|
172
|
|
|
|
(136)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(14,783)
|
|
|
|
(6,734)
|
|
Unbilled
receivables
|
|
|
(3,409)
|
|
|
|
713
|
|
Inventory
|
|
|
(1,006)
|
|
|
|
(1,659)
|
|
Prepaid expenses and
other assets
|
|
|
(52)
|
|
|
|
(526)
|
|
Deferred
revenue
|
|
|
(2,293)
|
|
|
|
3,374
|
|
Accounts payable and
other current liabilities
|
|
|
18,169
|
|
|
|
(3,689)
|
|
Other
liabilities
|
|
|
516
|
|
|
|
(1,644)
|
|
Net cash provided by
operating activities
|
|
|
62,444
|
|
|
|
52,401
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
Payments for interest
rate swap
|
|
|
142
|
|
|
|
—
|
|
Purchases of
installation and service parts and property and
equipment
|
|
|
(10,403)
|
|
|
|
(13,203)
|
|
Cash proceeds from the
sale of assets
|
|
|
93
|
|
|
|
68
|
|
Net cash used in
investing activities
|
|
|
(10,168)
|
|
|
|
(13,135)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
Repayment of long-term
debt
|
|
|
(102,255)
|
|
|
|
(2,254)
|
|
Payment of debt
issuance costs
|
|
|
(170)
|
|
|
|
(164)
|
|
Proceeds from the
exercise of warrants
|
|
|
55,658
|
|
|
|
—
|
|
Share repurchases and
retirement
|
|
|
(100,000)
|
|
|
|
(69,790)
|
|
Proceeds from the
exercise of stock options
|
|
|
457
|
|
|
|
838
|
|
Payment of employee
tax withholding related to RSUs and PSUs vesting
|
|
|
(49)
|
|
|
|
(1,433)
|
|
Settlement of
contingent consideration
|
|
|
—
|
|
|
|
(205)
|
|
Net cash used in
financing activities
|
|
|
(146,359)
|
|
|
|
(73,008)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
(1,086)
|
|
|
|
(1,190)
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
|
|
(95,169)
|
|
|
|
(34,932)
|
|
Cash, cash equivalents
and restricted cash - beginning of period
|
|
|
213,499
|
|
|
|
90,561
|
|
Cash, cash equivalents
and restricted cash - end of period
|
|
$
|
118,330
|
|
|
$
|
55,629
|
|
VERRA MOBILITY
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
Nine Months Ended
September 30,
|
|
($ in
thousands)
|
|
2023
|
|
|
2022
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
53,993
|
|
|
$
|
64,257
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
86,835
|
|
|
|
105,294
|
|
Amortization of
deferred financing costs and discounts
|
|
|
3,600
|
|
|
|
4,122
|
|
Change in fair value
of private placement warrants
|
|
|
24,966
|
|
|
|
(5,133)
|
|
Tax receivable
agreement liability adjustment
|
|
|
—
|
|
|
|
(965)
|
|
Gain on interest rate
swap
|
|
|
(3,361)
|
|
|
|
—
|
|
Loss (gain) on
extinguishment of debt
|
|
|
3,533
|
|
|
|
(3,005)
|
|
Credit loss
expense
|
|
|
7,553
|
|
|
|
10,892
|
|
Deferred income
taxes
|
|
|
(7,236)
|
|
|
|
(17,310)
|
|
Stock-based
compensation
|
|
|
12,346
|
|
|
|
13,656
|
|
Other
|
|
|
306
|
|
|
|
624
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(35,854)
|
|
|
|
(25,846)
|
|
Unbilled
receivables
|
|
|
(9,529)
|
|
|
|
(4,205)
|
|
Inventory
|
|
|
(1,061)
|
|
|
|
(9,056)
|
|
Prepaid expenses and
other assets
|
|
|
2,948
|
|
|
|
8,405
|
|
Deferred
revenue
|
|
|
3,475
|
|
|
|
6,291
|
|
Accounts payable and
other current liabilities
|
|
|
27,059
|
|
|
|
(1,978)
|
|
Other
liabilities
|
|
|
798
|
|
|
|
2,733
|
|
Net cash provided by
operating activities
|
|
|
170,371
|
|
|
|
148,776
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
Payment of contingent
consideration
|
|
|
—
|
|
|
|
(647)
|
|
Payments for interest
rate swap
|
|
|
(1,414)
|
|
|
|
—
|
|
Purchases of
installation and service parts and property and
equipment
|
|
|
(40,501)
|
|
|
|
(35,927)
|
|
Cash proceeds from the
sale of assets
|
|
|
222
|
|
|
|
140
|
|
Net cash used in
investing activities
|
|
|
(41,693)
|
|
|
|
(36,434)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
Repayment on the
revolver
|
|
|
—
|
|
|
|
(25,000)
|
|
Repayment of long-term
debt
|
|
|
(179,264)
|
|
|
|
(6,764)
|
|
Payment of debt
issuance costs
|
|
|
(362)
|
|
|
|
(410)
|
|
Proceeds from the
exercise of warrants
|
|
|
161,408
|
|
|
|
—
|
|
Share repurchases and
retirement
|
|
|
(100,000)
|
|
|
|
(125,071)
|
|
Proceeds from the
exercise of stock options
|
|
|
2,845
|
|
|
|
997
|
|
Payment of employee
tax withholding related to RSUs and PSUs vesting
|
|
|
(3,077)
|
|
|
|
(3,072)
|
|
Settlement of
contingent consideration
|
|
|
—
|
|
|
|
(205)
|
|
Net cash used in
financing activities
|
|
|
(118,450)
|
|
|
|
(159,525)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
(1,013)
|
|
|
|
(1,620)
|
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
|
|
9,215
|
|
|
|
(48,803)
|
|
Cash, cash equivalents
and restricted cash - beginning of period
|
|
|
109,115
|
|
|
|
104,432
|
|
Cash, cash equivalents
and restricted cash - end of period
|
|
$
|
118,330
|
|
|
$
|
55,629
|
|
VERRA MOBILITY
CORPORATION
|
ADJUSTED EBITDA
RECONCILIATION (Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
($ in
thousands)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net
income
|
|
$
|
30,308
|
|
|
$
|
24,576
|
|
|
$
|
53,993
|
|
|
$
|
64,257
|
|
Interest expense,
net
|
|
|
20,384
|
|
|
|
20,260
|
|
|
|
65,842
|
|
|
|
49,024
|
|
Income tax
provision
|
|
|
11,497
|
|
|
|
8,396
|
|
|
|
31,864
|
|
|
|
27,854
|
|
Depreciation and
amortization
|
|
|
27,530
|
|
|
|
35,079
|
|
|
|
86,835
|
|
|
|
105,294
|
|
EBITDA
|
|
|
89,719
|
|
|
|
88,311
|
|
|
|
238,534
|
|
|
|
246,429
|
|
Transaction and other
related expenses
|
|
|
152
|
|
|
|
2,968
|
|
|
|
484
|
|
|
|
3,457
|
|
Transformation
expenses
|
|
|
1,582
|
|
|
|
243
|
|
|
|
2,306
|
|
|
|
509
|
|
Change in fair value of
private placement warrants (i)
|
|
|
(553)
|
|
|
|
(2,267)
|
|
|
|
24,966
|
|
|
|
(5,133)
|
|
Tax receivable
agreement liability adjustment (ii)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(965)
|
|
Loss (gain) on interest
rate swap (iii)
|
|
|
60
|
|
|
|
—
|
|
|
|
(1,947)
|
|
|
|
—
|
|
Loss (gain) on
extinguishment of debt (iv)
|
|
|
1,975
|
|
|
|
(3,005)
|
|
|
|
3,533
|
|
|
|
(3,005)
|
|
Stock-based
compensation (v)
|
|
|
4,443
|
|
|
|
4,644
|
|
|
|
12,346
|
|
|
|
13,656
|
|
Adjusted
EBITDA
|
|
$
|
97,378
|
|
|
$
|
90,894
|
|
|
$
|
280,222
|
|
|
$
|
254,948
|
|
|
|
(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,
or a final re-measurement upon their exercise.
|
|
|
(ii)
|
The Tax Receivable
Agreement liability adjustment in 2022 arose from lower estimated
state tax rates due to changes in apportionment.
|
|
|
(iii)
|
(Loss) gain on interest
rate swap is associated with the derivative instrument re-measured
to fair value at the end of the reporting period offset by the
related monthly cash payments.
|
|
|
(iv)
|
Loss on extinguishment
of debt consists of the write-off of pre-existing original issue
discounts and deferred financing costs associated with the early
repayment of debt and the gain on extinguishment of debt in 2022
related to the forgiveness of the PPP loan.
|
|
|
(v)
|
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
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
($ in
thousands)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net cash provided by
operating activities
|
|
$
|
62,444
|
|
|
$
|
52,401
|
|
|
$
|
170,371
|
|
|
$
|
148,776
|
|
Purchases of
installation and service parts and property and
equipment
|
|
|
(10,403)
|
|
|
|
(13,203)
|
|
|
|
(40,501)
|
|
|
|
(35,927)
|
|
Free Cash
Flow
|
|
$
|
52,041
|
|
|
$
|
39,198
|
|
|
$
|
129,870
|
|
|
$
|
112,849
|
|
ADJUSTED EPS
(Unaudited)
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
(In thousands,
except per share data)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net
income
|
|
$
|
30,308
|
|
|
$
|
24,576
|
|
|
$
|
53,993
|
|
|
$
|
64,257
|
|
Amortization of
intangibles
|
|
|
18,921
|
|
|
|
26,603
|
|
|
|
60,923
|
|
|
|
81,109
|
|
Transaction and other
related expenses
|
|
|
152
|
|
|
|
2,968
|
|
|
|
484
|
|
|
|
3,457
|
|
Transformation
expenses
|
|
|
1,582
|
|
|
|
243
|
|
|
|
2,306
|
|
|
|
509
|
|
Change in fair value
of private placement warrants
|
|
|
(553)
|
|
|
|
(2,267)
|
|
|
|
24,966
|
|
|
|
(5,133)
|
|
Tax receivable
agreement liability adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(965)
|
|
Change in fair value
of interest rate swap
|
|
|
202
|
|
|
|
—
|
|
|
|
(3,361)
|
|
|
|
—
|
|
Loss (gain) on
extinguishment of debt
|
|
|
1,975
|
|
|
|
(3,005)
|
|
|
|
3,533
|
|
|
|
(3,005)
|
|
Stock-based
compensation
|
|
|
4,443
|
|
|
|
4,644
|
|
|
|
12,346
|
|
|
|
13,656
|
|
Total adjustments
before income tax effect
|
|
|
26,722
|
|
|
|
29,186
|
|
|
|
101,197
|
|
|
|
89,628
|
|
Income tax effect on
adjustments
|
|
|
(7,843)
|
|
|
|
(11,027)
|
|
|
|
(22,536)
|
|
|
|
(31,594)
|
|
Total adjustments
after income tax effect
|
|
|
18,879
|
|
|
|
18,159
|
|
|
|
78,661
|
|
|
|
58,034
|
|
Adjusted Net
Income
|
|
$
|
49,187
|
|
|
$
|
42,735
|
|
|
$
|
132,654
|
|
|
$
|
122,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EPS
|
|
$
|
0.29
|
|
|
$
|
0.27
|
|
|
$
|
0.84
|
|
|
$
|
0.76
|
|
Diluted weighted
average shares outstanding
|
|
|
169,497
|
|
|
|
158,304
|
|
|
|
157,133
|
|
|
|
160,433
|
|
Investor Relations Contact
Mark Zindler
mark.zindler@verramobility.com
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SOURCE Verra Mobility