ATLANTA, May 21, 2019 /PRNewswire/ -- Repay Holdings, LLC,
a leading provider of vertically-integrated payment solutions,
together with its parent, Hawk Parent Holdings, LLC (together,
"REPAY"), today reported financial highlights for the three months
ended March 31, 2019.
"Our first quarter results performed ahead of our expectations,
with a year-over-year increase in card payment volume and total
revenue of approximately 32% and 20%, respectively," said
John Morris, CEO of REPAY. We
believe our results demonstrate that we have a competitive position
in a growing market that has historically been under penetrated by
card payments. We expect to take advantage of this large
and growing market by expanding usage of our existing clients while
also targeting new clients in existing verticals. In addition, we
look to broaden our addressable market through both strategic
M&A and expansion into new verticals."
"We remain excited about the pending merger with Thunder Bridge,
and are grateful for the commitment and support we have received
from our new PIPE investors," continued Morris. "We are on track to
complete the proposed transactions in the second quarter of this
year."
Financial Highlights for the First Quarter of 2019 Compared
to the First Quarter of 2018
- Card payment volume increased approximately 32% to $2.4 billion from $1.8
billion in the first quarter of 2018.
- Total revenue increased approximately 20% to $39.2 million from $32.8
million in the first quarter of 2018.
- Gross Profit increased approximately 31% to $17.9 million from $13.7
million in the first quarter of 2018.
- Net Income increased to $4.9
million from $0.2 million in
the first quarter of 2018.
- Adjusted EBITDA increased approximately 20% to $11.3 million from $9.4
million in the first quarter of 2018.
Full Year 2019 Outlook
REPAY reaffirms its financial guidance for the full year 2019.
The Company expects:
- Card payment volume of approximately $9.2 billion
- Total revenue of approximately $159.2
million
- Gross Profit of approximately $71.6
million
- Adjusted EBITDA of approximately $44.0
million
Revenue information for the full year 2019 outlook is presented
in accordance with Accounting Standards Codification ("ASC") 605.
REPAY expects to adopt a new standard, ASC 606, when financial
results for the full year ended December 31,
2019 are reported. Gross profit represents total revenue
less interchange and network fees as well as other costs of
services. Adjusted EBITDA is a non-GAAP financial measure that
represents net income adjusted for interest expense, depreciation
and amortization and certain other non-cash charges and
non-recurring items. See "Non-GAAP Financial Measures" below and
the reconciliation of Adjusted EBITDA to its most comparable GAAP
measure provided therein.
REPAY previously announced that it had entered into a merger
agreement with Thunder Bridge Acquisition, Ltd. (NASDAQ: TBRG)
("Thunder Bridge") for a proposed business combination. Completion
of the proposed business combination is subject to approval by the
shareholders of Thunder Bridge and certain other conditions. The
proposed business combination is expected to close in the second
quarter of 2019.
About REPAY
REPAY provides integrated payment processing solutions to
verticals that have specific transaction processing needs. REPAY's
proprietary, integrated payment technology platform reduces the
complexity of electronic payments for merchants, while enhancing
the overall experience for consumers.
About Thunder Bridge Acquisition, Ltd.
Thunder Bridge Acquisition, Ltd. is a blank check company formed
for the purpose of effecting a merger, share exchange, asset
acquisition, stock purchase, reorganization or similar business
combination with one or more businesses. In June 2018, Thunder Bridge consummated a
$258 million initial public offering
(the "IPO") of 25.8 million units, each unit consisting of one of
the Company's Class A ordinary shares and one warrant, each warrant
enabling the holder thereof to purchase one Class A ordinary share
at a price of $11.50 per share.
Thunder Bridge's securities are quoted on the NASDAQ stock exchange
under the ticker symbols TBRGU, TBRG, and TBRGW.
Important Information About the Transaction and Where to Find
Additional Information
This communication is being made in respect of the proposed
business combination between Thunder Bridge and REPAY. In
connection with the proposed business combination, Thunder Bridge
has filed with the Securities and Exchange Commission ("SEC") a
registration statement on Form S-4, which includes a preliminary
proxy statement/prospectus of Thunder Bridge, and will file other
documents regarding the proposed transaction with the SEC. After
the registration statement is declared effective, Thunder Bridge
will mail the definitive proxy statement/prospectus to its
shareholders and warrant holders. Before making any voting or
investment decision, investors, shareholders and warrant
holders of Thunder Bridge are urged to carefully read the
preliminary proxy statement/prospectus, and when they become
available, the definitive proxy statement/prospectus and any other
relevant documents filed with the SEC, as well as any amendments or
supplements to these documents, because they will contain important
information about Thunder Bridge, REPAY and the proposed business
combination. The documents filed by Thunder Bridge with the SEC may
be obtained free of charge at the SEC's website at www.sec.gov, or
by directing a request to Thunder Bridge Acquisition, Ltd., 9912
Georgetown Pike, Suite D203, Great Falls,
Virginia 22066, Attention: Secretary, (202) 431-0507.
Participants in the Solicitation
Thunder Bridge and REPAY and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the shareholders and warrant
holders of Thunder Bridge in favor of the approval of the business
combination. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the solicitation of the
shareholders and warrant holders of Thunder Bridge in connection
with the proposed business combination is set forth in the
preliminary proxy statement/prospectus. Information regarding
Thunder Bridge's directors and executive officers are set forth in
Thunder Bridge's registration statement on Form S-1, including
amendments thereto, and other reports which are filed with the SEC.
Free copies of these documents may be obtained as described in the
preceding paragraph.
Forward-Looking Statements
This communication contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements include, but are not limited to,
statements about future financial and operating results, our plans,
objectives, expectations and intentions with respect to future
operations, products and services; and other statements identified
by words such as "will likely result," "are expected to," "will
continue," "is anticipated," "estimated," "believe," "intend,"
"plan," "projection," "outlook" or words of similar meaning. These
forward-looking statements include, but are not limited to,
statements regarding REPAY's industry and market sizes, future
opportunities for Thunder Bridge, REPAY and the combined company,
Thunder Bridge's and REPAY's estimated future results and the
proposed business combination between Thunder Bridge and REPAY,
including the implied enterprise value, the expected transaction
and ownership structure and the likelihood and ability of the
parties to successfully consummate the proposed business
combination. Such forward-looking statements are based upon the
current beliefs and expectations of our management and are
inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
difficult to predict and generally beyond our control. Actual
results and the timing of events may differ materially from the
results anticipated in these forward-looking statements.
In addition to factors previously disclosed in Thunder Bridge's
reports filed with the SEC and those identified elsewhere in this
communication, the following factors, among others, could cause
actual results and the timing of events to differ materially from
the anticipated results or other expectations expressed in the
forward-looking statements: inability to meet the closing
conditions to the business combination, including the occurrence of
any event, change or other circumstances that could give rise to
the termination of the definitive agreement; the inability to
complete the transactions contemplated by the definitive agreement
due to the failure to obtain approval of Thunder Bridge's
shareholders and warrantholders, the inability to consummate the
PIPE Investment, the inability to consummate the contemplated debt
financing, the failure to achieve the minimum amount of cash
available following any redemptions by Thunder Bridge shareholders
or the failure to meet The Nasdaq Stock Market's listing standards
in connection with the consummation of the contemplated
transactions; costs related to the transactions contemplated by the
definitive agreement; a delay or failure to realize the expected
benefits from the proposed business combination; risks related to
disruption of management time from ongoing business operations due
to the proposed business combination; changes in the payment
processing market in which REPAY competes, including with respect
to its competitive landscape, technology evolution or regulatory
changes; changes in the vertical markets that REPAY targets; risks
relating to REPAY's relationships within the payment ecosystem;
risk that REPAY may not be able to execute its growth strategies,
including identifying and executing acquisitions; risks relating to
data security; changes in accounting policies applicable to REPAY;
and the risk that REPAY may not be able to develop and maintain
effective internal controls.
Actual results, performance or achievements may differ
materially, and potentially adversely, from any projections and
forward-looking statements and the assumptions on which those
forward-looking statements are based. There can be no assurance
that the data contained herein is reflective of future performance
to any degree. You are cautioned not to place undue reliance on
forward-looking statements as a predictor of future performance as
projected financial information and other information are based on
estimates and assumptions that are inherently subject to various
significant risks, uncertainties and other factors, many of which
are beyond our control. All information set forth herein speaks
only as of the date hereof in the case of information about Thunder
Bridge and REPAY or the date of such information in the case of
information from persons other than Thunder Bridge or REPAY, and we
disclaim any intention or obligation to update any forward looking
statements as a result of developments occurring after the date of
this communication. Forecasts and estimates regarding REPAY's
industry and end markets are based on sources we believe to be
reliable, however there can be no assurance these forecasts and
estimates will prove accurate in whole or in part. Annualized, pro
forma, projected and estimated numbers are used for illustrative
purpose only, are not forecasts and may not reflect actual
results.
No Offer or Solicitation
This communication shall not constitute a solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the transaction. This communication shall also not
constitute an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any
states or jurisdictions in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended, or an exemption therefrom.
Non-GAAP Financial Measure
REPAY discloses Adjusted EBITDA in this press release because it
is a key measure used by its management to evaluate REPAY's
business, measure its operating performance and make strategic
decisions. REPAY believes Adjusted EBITDA is useful for investors
and others in understanding and evaluating our operations results
in the same manner as its management. However, Adjusted EBITDA is
not a financial measure calculated in accordance with GAAP and
should not be considered as a substitute for net income, operating
profit, or any other operating performance measure calculated in
accordance with GAAP. Adjusted EBITDA is a non-GAAP financial
measure that represents net income prior to interest expense,
depreciation and amortization, as adjusted to add back certain
non-cash and non-recurring charges, such as loss on extinguishment
of debt, non-cash change in fair value of contingent consideration,
share-based compensation charges, transaction expenses, management
fees, legacy commission related charges, employee recruiting costs,
loss on disposition of property and equipment, other taxes,
strategic initiative related costs and other non-recurring charges.
Using this non-GAAP financial measure to analyze REPAY's business
would have material limitations because the calculations are based
on the subjective determination of management regarding the nature
and classification of events and circumstances that investors may
find significant. In addition, although other companies in our
industry may report measures titled Adjusted EBITDA or similar
measures, such non-GAAP financial measures may be calculated
differently from how REPAY calculates its non-GAAP financial
measures, which reduces their overall usefulness as comparative
measures. Because of these limitations, you should consider
Adjusted EBITDA alongside other financial performance measures,
including net income and our other financial results presented in
accordance with GAAP.
The following table presents a reconciliation of net income to
Adjusted EBITDA for each of the periods indicated:
|
Three Months Ended
March 31,
|
|
2019
|
2018
|
|
(in
thousands)
|
Net income
(loss)
|
$
4,864
|
$
181
|
Plus:
|
|
|
Interest
expense
|
1,449
|
1,503
|
Depreciation and
amortization
|
2,914
|
2,392
|
EBITDA
|
9,227
|
4,076
|
|
|
|
Loss on
extinguishment of debt
|
—
|
—
|
Non-cash change in
fair value of contingent consideration
|
—
|
—
|
Share-based
compensation expense(a)
|
127
|
219
|
Transaction
expenses(b)
|
1,686
|
513
|
Management
fees(c)
|
100
|
100
|
Legacy commission
related charges(d)
|
—
|
4,168
|
Employee recruiting
costs(e)
|
15
|
77
|
Loss on disposition
of property and equipment
|
—
|
—
|
Other
taxes(f)
|
59
|
173
|
Strategic initiatives
related costs(g)
|
124
|
72
|
Other non-recurring
charges(h)
|
—
|
47
|
Adjusted
EBITDA
|
$
11,338
|
$
9,446
|
|
|
|
(a)
|
Represents
compensation expense associated with REPAY's equity compensation
plans.
|
|
|
(b)
|
Primarily consists of
(i) during the three months ended March 31, 2019, professional
service fees and other costs in connection with the business
combination, and (ii) during the three months ended March 31, 2018,
additional transaction related expenses in connection with the
acquisitions of PaidSuite, Inc. and PaidMD, LLC and Paymaxx Pro,
LLC, which transactions closed in 2017.
|
|
|
(c)
|
Reflects management
fees paid to Corsair pursuant to the management agreement between
Corsair and REPAY, which will terminate upon the completion of the
business combination.
|
|
|
(d)
|
Represents payments
made to certain employees in connection with significant
restructuring of their commission structures. These payments were
non-recurring and represented commission structure changes which
are not in the ordinary course of business.
|
|
|
(e)
|
Represents payments
made to third-party recruiters in connection with a significant
expansion of personnel, which we expect will become more moderate
in subsequent periods.
|
|
|
(f)
|
Reflects franchise
taxes and other non-income based taxes.
|
|
|
(g)
|
Consulting fees
relating to our processing services and other operational
improvements that were not in the ordinary course, in the aggregate
amount of $124,000, and $55,000 are reflected in the three months
ended March 31, 2019 and 2018, respectively. Additionally, one-time
fees relating to special projects for new market expansion that are
not anticipated to continue in the ordinary course of business are
reflected in the three months ended March 31, 2018.
|
|
|
(h)
|
For the three months
ended March 31, 2018, consists of litigation expenses related to a
dispute with a former customer, which expenses were offset in
subsequent periods as a result of its settlement.
|
This press release includes forecasted 2019 Adjusted EBITDA.
REPAY does not provide quantitative reconciliation of such
forward-looking, non-GAAP financial measure to the most directly
comparable GAAP financial measure because it is difficult to
reliably predict or estimate the relevant components without
unreasonable effort due to future uncertainties that may
potentially have significant impact on such calculations, and
providing them may imply a degree of precision that would be
confusing or potentially misleading to investors.
Contact
Investor Relations
ICR
repayIR@icrinc.com
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SOURCE Repay Holdings, LLC