PRIORITY TECHNOLOGY HOLDINGS, INC. Priority Technology Holdings, Inc.
Supplemental Slides for the First Quarter 2021 Earnings Call
May 13, 2021
Forward-Looking Statements
This press release 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 "may," "will," "should," "anticipates," "believes," "expects," "plans," "future," "intends," "could," "estimate," "predict," "projects," "targeting," "potential" or "contingent," "guidance," "outlook" or words of similar meaning. These forward- looking statements include, but are not limited to, expected timing of the closing of Priority Technology Holdings, Inc.'s ("Priority", "we", "our", or "us") merger with Finxera Holdings, Inc. ("Finxera") and our 2021 outlook and statements regarding our market and growth opportunities. 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 risks, trends and uncertainties that could cause
actual results to differ materially from those projected, expressed, or implied by such forward-looking statements. These forward-looking statements may include, but are not limited to, statements about the effects of the COVID-19 pandemic on our revenues and financial operating results. Our actual results could differ materially, and potentially adversely, from those discussed or implied herein.
We caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed in our SEC filings, including our most recent Annual Report on Form 10-K filed with the SEC on March 31, 2021. These filings are available online at www.sec.gov or www.PRTH.com.
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the way we expect. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. The forward-looking statements included in this press release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward- looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.
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First Quarter Highlights
- Revenue of $113.3 million increased 16.9% from $96.9 million in 2020
- Gross profit of $31.4 million increased 2.8% from $30.6 million in 2020
- Gross profit margin of 27.7% decreased 379 basis points from 31.5% in 2020
- Income from operations of $4.5 million increased 27.2% from $3.6 million in 2020, including non- recurring expenses of $3.6 million and $1.4 million in first quarter 2021 and 2020, respectively
- Adjusted EBITDA of $18.0 million increased 13.9% from $15.8 million in 2020
- Net debt of $373.3 million increased $0.5 million from $372.8 million at end of 2020
- Net leverage ratio of 5.44x decreased from 5.85x at end of 2020
Revenue, Gross Profit and Adjusted EBITDA
(dollars in millions)
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First Quarter 2021 and 2020 - Adjusted for Comparability
Presentation of Results Adjusted for RentPayment and Non-recurring Expenses
(dollars in millions) | |||||||||||||||||||||
First Quarter 2021 | First Quarter 2020 | ||||||||||||||||||||
GAAP | NR Exp | Adjusted | GAAP | RentPayment | NR Exp | Adjusted | |||||||||||||||
Revenue | $ | 113.3 | $ | 113.3 | $ | 96.9 | $ | (3.8) | $ | 93.1 | |||||||||||
Cost of services | 81.9 | 81.9 | 66.4 | (0.4) | 66.0 | ||||||||||||||||
Gross Profit | $ | 31.4 | $ | 31.4 | $ | 30.6 | $ | (3.5) | $ | 27.1 | |||||||||||
Gross Profit Margin | 27.7% | 27.7% | 31.5% | 90.2% | 29.1% | ||||||||||||||||
Salary and employee benefits1 | 9.5 | 9.5 | 10.1 | (0.5) | 9.6 | ||||||||||||||||
Depreciation and amortization | 9.1 | 9.1 | 10.3 | (1.2) | 9.1 | ||||||||||||||||
Selling, general and administrative2 | 8.3 | (3.6) | 4.7 | 6.6 | (1.2) | (0.5) | 5.0 | ||||||||||||||
Total operating expenses | 26.9 | (3.6) | 23.3 | 27.0 | (2.9) | (0.5) | 23.6 | ||||||||||||||
Income (loss) from operations | $ | 4.5 | $ | 3.6 | $ | 8.2 | $ | 3.6 | $ | (0.6) | $ | 0.5 | $ | 3.5 | |||||||
Adjusted EBITDA | $ | 18.0 | $ | 18.0 | $ | 15.8 | $ | (2.7) | $ | 13.1 | |||||||||||
- Salary and employee benefits includes $558k and $338k of non-cash compensation in the first quarter of 2021 and 2020, respectively.
- Selling, general and administrative includes the following non-recurring expenses:
2021 | 2020 | Segment | ||||||
Professional, Accounting, and Legal | $ | 3.6 | $ | 0.5 | Corporate | |||
Acquisition transition | - | 0.9 | Integrated Partners (PRET) | |||||
$ | 3.6 | $ | 1.4 | |||||
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Pro Forma First Quarter 2021
Pro Forma Includes Actual Results of Finxera and an April 2021 Reseller Acquisition
The Company announced during first quarter 2021 that it entered into an agreement to acquire Finxera Holdings, Inc. ("Finxera"). That acquisition is expected to close in third quarter 2021. In first quarter 2021, Finxera generated revenue of $16.8 million, gross profit of $15.6 million, and Adjusted EBITDA of $11.7 million. On a pro forma basis, including first quarter results of Finxera, together with the April 2021 tuck-in reseller acquisition, first quarter 2021 financial results (excluding revenue and cost synergies) are as follows:
- Revenue of $130.1 million
- Gross profit of $50.9 million
- Gross profit margin of 39.2%
- Adjusted EBITDA of $33.5 million
Pro Forma First Quarter 2021 | |||||
Tuck-in | |||||
(dollars in thousands) | Priority | Finxera | Acquisition | Pro Forma | |
Revenue | $113,297 | $16,769 | $130,066 | ||
Gross Profit | $31,434 | $15,647 | $3,855 | $50,936 | |
Gross Profit % | 27.7% | 93.3% | 39.2% | ||
Adjusted EBITDA | $18,001 | $11,680 | $3,855 | $33,536 |
(a) Actual first quarter results of Priority, Finxera and an April 2021 reseller tuck-in acquisition.
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Priority Technology Holdings Inc. published this content on 13 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2021 00:13:06 UTC.
