ATLANTA, March 11, 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 full year
ended December 31, 2018.
"2018 was another strong year for REPAY. We generated solid
financial and operating results," said John
Morris, CEO of REPAY. "We have a leading platform and
attractive market opportunity, both of which position us to build
on our track record of robust growth and profitability. In 2019 and
beyond we look to increase penetration of our existing client base,
acquire new merchants in existing verticals, and create operational
efficiencies as our business continues to scale. Additionally, we
are focused on broadening our addressable market by leveraging our
platform and capabilities to expand organically into new verticals
and geographies and inorganically through strategic M&A."
"We are excited about the pending merger with Thunder Bridge,
which will help us access capital to accelerate growth," continued
Morris. "We are on track to complete the proposed transaction in
the second quarter of this year."
Financial Highlights for Full Year 2018 Compared to Full Year
2017
- Payment volume increased 42% to $7.5
billion from $5.2 billion in
2017.
- Revenue increased 38% to $130.0
million from $94.0 million in
2017.
- Net Revenue increased 44% to $82.2
million from $57.1 million in
2017.
- Gross Profit increased 51% to $55.0
million from $36.3 million in
2017.
- Net Income increased 12% to $10.5
million from $9.4 million in
2017.
- Adjusted EBITDA increased 45% to $36.8
million from $25.4 million in
2017.
Full Year 2019 Outlook
REPAY reaffirms its financial guidance for the full year 2019.
The Company expects:
- Payment volume of $9.2
billion
- Revenue of $159.2 million
- Net Revenue of $100.7
million
- Gross Profit of $71.6
million
- Adjusted EBITDA of $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. Net revenue is a non-GAAP financial
measure that represents revenue less interchange and network fees,
while gross profit represents 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" and "Reconciliation of GAAP to Non-GAAP Financial
Measures" below.
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 and Where to Find It
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 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
business combination with the SEC. After the registration statement
is declared effective, Thunder Bridge will mail the definitive
proxy statement/prospectus to its shareholders. Before making any
voting or investment decision, investors and shareholders 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 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
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.
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures
that REPAY uses to evaluate its business, measure its performance
and make strategic decisions. REPAY believes that such non-GAAP
financial measures provide useful information to investors and
others in understanding and evaluating its operating results in the
same manner as management. Net revenue is a non-GAAP financial
measure that represents revenue less interchange and network fees.
Adjusted EBITDA is a non-GAAP financial measure that represents net
income prior to interest expense and depreciation and amortization,
as adjusted to add back certain non-cash charges and account for
non-recurring items, such as other expenses, non-cash change in
fair value of contingent consideration, share-based compensation
expense, transaction expenses, and other non-recurring charges. Net
revenue and Adjusted EBITDA should not be considered as substitutes
for financial measures calculated in accordance with GAAP but
instead considered alongside such measures calculated in accordance
with GAAP. In particular, using Adjusted EBITDA 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 the industry may report measures titled Adjusted
EBITDA or similar measures, such non-GAAP financial measures may be
calculated differently from how REPAY calculates Adjusted EBITDA,
which reduces its overall usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted EBITDA
alongside other financial performance measures, including net
income and other financial results presented in accordance with
GAAP.
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 merger agreement; the inability to complete
the transactions contemplated by the merger agreement due to the
failure to obtain approval of Thunder Bridge's shareholders, 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 merger 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 proposed business combination. 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.
Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of REPAY's revenues to net revenues is as
follows:
|
Year Ended
December 31,
2018
|
|
Year Ended
December 31,
2017
|
|
|
|
|
(in
thousands)
|
|
|
|
Revenue
|
$
130,013
|
|
$
93,951
|
Interchange and
network fees
|
47,827
|
|
36,888
|
Net
revenue
|
$
82,186
|
|
$
57,063
|
|
|
|
|
Reconciliation of net income to Adjusted EBITDA is as
follows:
|
Year Ended
December 31,
2018
|
|
Year Ended
December 31,
2017
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
Net income
(loss)
|
$
10,537
|
|
$
9,448
|
|
Plus:
|
|
|
|
|
Interest
expense
|
6,073
|
|
5,706
|
|
Depreciation and
amortization
|
10,421
|
|
7,457
|
|
EBITDA
|
27,031
|
|
22,611
|
|
Other
expenses(a)
|
1
|
|
1,235
|
|
Non-cash change in
fair value of contingent consideration(b)
|
(1,103)
|
|
(2,100)
|
|
Share-based
compensation expense(c)
|
797
|
|
622
|
|
Transaction
expenses(d)
|
4,355
|
|
1,351
|
|
Other non-recurring
charges(e)
|
5,698
|
|
1,708
|
|
Adjusted
EBITDA
|
$
36,779
|
|
$
25,427
|
|
___________
(a)
|
Reflects write-offs
of debt issuance costs relating to REPAY's term loans, prepayment
penalties relating to its prior debt facility as well as write-offs
of certain fixed assets.
|
|
|
(b)
|
Reflects changes in
management's estimates of future cash consideration to be paid in
connection with prior acquisitions from the amount estimated as of
the later of the most recent balance sheet date forming the
beginning of the income statement period or the original estimates
made at the closing of the applicable acquisition.
|
|
|
(c)
|
Represents
compensation expense associated with REPAY's equity compensation
plans.
|
|
|
(d)
|
Transaction expenses
are the professional service fees and other costs in connection
with financing transactions and the acquisitions of PaidSuite, LLC
and Paymaxx Pro, LLC during the year ended December 31, 2017. For
the year ended December 31, 2018, transaction expenses reflect
professional service fees and other costs in connection with the
business combination with Thunder Bridge.
|
|
|
(e)
|
Represents other
non-recurring items, such as costs associated with one-time
strategic initiatives, sponsor management fees, which will
terminate upon the completion of the business combination with
Thunder Bridge, and one-time payroll costs to reflect the buyout of
commissions from select members of REPAY's sales teams.
|
Reconciliation of REPAY's forecasted 2019 revenue to net revenue
is as follows:
|
(Outlook)
|
|
|
|
Year Ended
December 31,
2019E
|
|
|
|
(in
millions)
|
|
|
Revenue
|
$
159.2
|
Interchange and
network fees
|
58.5
|
Net
revenue
|
$
100.7
|
|
|
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