REPAY HOLDINGS CORPORATION Disclaimer
On July 11, 2019 (the "Closing Date"), Thunder Bridge Acquisition Ltd. ("Thunder Bridge") and Hawk Parent Holdings LLC ("Hawk Parent")completedtheirpreviouslyannouncedbusinesscombinationunderwhichThunder Bridge acquired Hawk Parent, upon which Thunder Bridge changed its name to Repay Holdings Corporation ("REPAY " or the "Company "). Unless otherwise indicated, inf ormation prov ided in this presentation (a) that relates toanyperiodendedpriortotheClosingDatereflectsthatofHawkParentpriortotheBusinessCombinationand(b)thatrelatestothe12-monthperiodendedDecember30,2019reflectsthecombinationof(i)HawkParent f or the period f rom January 1, 2019 through July 10, 2019 and (ii) REPAY f or the period f rom the Closing Date through December 31, 2019. Such combination ref lects a simple arithmetic addition of relev ant periods. The historicalfinancialinformationofThunderBridgepriortotheBusinessCombinationhasnotbeenreflectedinanyfinancialinformationofHawkParent.
The Company 's f ilings with the Securities and Exchange Commission ("SEC"), which y ou may obtain f or f ree at the SEC's website athttp://www.sec.gov , discuss some of the important risk f actors that may af fect REPAY's business,resultsofoperationsandfinancialcondition.
Forward-Looking Statements
This presentation (the "Presentation") contains "forward-lookingstatements"withinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Suchstatem ents include, but are not limited to, statements about f uture f inancial and operating results, REPAY's plans, objectiv es, expectations and intentions with respect to f uture operations, productsandservices;andotherstatementsidentifiedbywordssuchas"willlikelyresult,""are expectedto,""willcontinue,""isanticipated,""estimated,""believe,""intend,""plan,""projection,""outlook"orwordsofsimilarmeaning.Theseforward-looking statements include, but are not limited to, REPAY's 2021 outlook, the ef f ects of the COVID-19 pandemic, expected demand on REPAY's product of f ering, including f urther implementation of electronic pay ment options and statements regarding REPAY's market and growth opportunities, and our business strategy and the plans and objectiv es of management f or f uture operations. Such f orward-looking statements are based upon the current belief s and expectations of REPAY's management and are inherently subject to signif icant business, economic and competitiv e uncertainties and contingencies, many of which are dif f icult to predict and generally bey ond our control. In addition to f actors prev iously disclosed in REPAY's reports f iled with the SEC, including our Annual Report on Form 10-K f or the y ear ended December 31, 2020, the f ollowing f actors, among others, could cause actual results and the timing of ev ents to dif f er materially from the anticipatedresultsorotherexpectationsexpressedintheforward-lookingstatements:exposuretoeconomicconditionsandpoliticalriskaffectingtheconsumerloanmarketandconsumerandcommercialspending;the impacts of the ongoing COVID-19 coronav irus pandemic and the actions taken to control or mitigate its spread (which impacts are highly uncertain and cannot be reasonably estimated or predicted at this time); a delay or f ailure to integrate and realize the benef its of REPAY's recent acquisitions; changes in the pay ment processing market in which REPAY competes, including with respect to its competitiv e landscape, technology ev olution or regulatorychanges;changesintheverticalmarketsthatREPAYtargets;risksrelatingtoREPAY'srelationshipswithinthepay ment ecosy stem; risk that REPAY may not be able to execute its growth strategies, including identif y ing 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 dev elop and maintain ef f ective internal controls. Actual results, perf ormance or achiev ements may dif fer materially, and potentially adv ersely, from any projections and f orward-looking statements and the assumptions on which those f orward-looking statements are based. There can be no assurance that the data contained herein is ref lectiv e of f uture perf ormance to any degree. You are cautioned not to place undue reliance on f orward-looking statements as a predictor of f uture perf ormance. All informationsetforthhereinspeaksonlyasofthedatehereofinthecaseofinformationaboutusorthedateofsuchinformationinthecaseofinformationfrompersonsotherthanus,andwedisclaimanyintentionorobligation to update any f orward-looking statements as a result of dev elopments occurring af ter the date of this prospectus. Forecasts and estimates regarding our industry and end markets are based on sources we believ e to be reliable, howev er there can be no assurance these f orecasts and estimates will prov e accurate in whole or in part. Annualized, pro f orma, projected and estimated numbers are used f or illustrativ e purpose only , are not f orecasts and may not ref lect actual results.
Industry and Market Data
The inf ormation contained herein also includes inf ormation prov ided by third parties, such as market research f irms. Neitherof REPAY nor its af f iliates and any third parties that prov ide inf ormation to REPAY, such as market research f irms, guarantee the accuracy , completeness, timeliness or av ailability of any inf ormation. Neither REPAY nor its aff iliates and any third parties that prov ide inf ormation to REPAY, such as market research f irms, are responsibleforanyerrorsoromissions(negligentorotherwise),regardlessofthecause,ortheresultsobtainedfromtheuseofsuchcontent.NeitherREPAYnoritsaffiliatesgiveanyexpressorimpliedwarranties,including, but not limited to, any warranties of merchantability or f itness f or a particular purpose or use, and they expressly disclaim any responsibility or liability for direct, indirect, incidental, exemplary , compensatory , punitive, special or consequential damages, costs, expenses, legal f ees or losses (including lost income or prof its and opportunity costs) in connection with the use of the inf ormation herein.
Non-GAAP Financial Measures
This Presentation includes certain non-GAAP f inancial measures that REPAY's management uses to ev aluate its operating business, measure its perf ormance and make strategic decisions. Adjusted EBITDA is a non-GAAP financialmeasurethatrepresentsnetincomepriortointerestexpense,taxexpense,depreciationandamortization,asadjustedtoaddbackcertainnon-cashandnon-recurringcharges,suchasnon-cashlosson extinguishment of debt, non-cash change in f air v alue of contingent consideration, non-cash change in f air v alue of assets and liabilities, share-based compensation charges, transaction expenses, management f ees, legacy commission related charges, employ ee recruiting costs, other taxes, strategic initiativ e related costs and other non-recurring charges. Adjusted Net Income is a non-GAAP f inancial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain non-cash and non-recurring charges, such as non-cash loss on extinguishment of debt, non-cash change in f air v alue of contingent consideration, non-cash change in f air v alue of assets and liabilities, share-based compensation expense, transaction expenses, management f ees, legacy commission related charges, employ ee recruiting costs, strategic initiativ e related costs and other non-recurring charges, net of tax ef f ect associated with these adjustments. Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and f requency and are signif icantly impacted by the timing and/or size of acquisitions. Management believ es that the adjustment of acquisition-related intangible amortization supplements GAAP f inancial measures because it allows f or greater comparability of operating perf ormance. Although we exclude amortization f rom acquisition-related intangibles f rom our non-GAAP expenses, management believ es that it is important f or inv estors to understand that such intangibles were recorded as part of purchase accounting and contribute to rev enue generation. REPAY believ es that Adjusted EBITDA and Adjusted Net Income prov ide usef ul inf ormation to inv estors and others in understanding and ev aluating its operating results in the same manner as management. Howev er, Adjusted EBITDA and Adjusted Net Income are not f inancial measures calculated in accordance with GAAP and shouldnotbeconsideredasasubstitutefornetincome,operatingprofit,oranyotheroperatingperformancemeasurecalculatedinaccordancewithGAAP.Usingthesenon-GAAP f inancial measures to analy ze REPAY's business has material limitations because the calculations are based on the subjectiv e determination of management regarding the nature and classif ication of events and circumstances that inv estors may find signif icant. In addition, although other companies in REPAY's industry may report measures titled Adjusted EBITDA and Adjusted Net Income, or similarmeasures,suchnon-GAAPfinancialmeasuresmaybecalculateddifferentlyfrom how REPAY calculates its non-GAAP f inancial measures, which reduces their ov erall usef ulness as comparativ e measures. Because of these limitations, y ou should consider Adjusted EBITDA and Adjusted Net Income alongsideotherfinancialperformancemeasures,includingnetincomeandREPAY'sotherfinancialresultspresentedinaccordance with GAAP.
No Of f er or Solicitation
This Presentation is f or inf ormational purposes only and is neither an of f er to sell or purchase, nor a solicitation of an off er to sell, buy or subscribe f or any securities, nor shall there be any sale, issuance or transf er of securities in any jurisdiction in contrav ention of applicable law.
1
Section 1:
Financial Update
Financial Highlights
(Represents Y-o-Y Growth)
Financial Update - Q4 2020
($MM)
Card Payment Volume
$3,955 $3,422
Gross Profit (1)
Adjusted EBITDA
Q4 2019
Q4 2020
Q4 2019
Q4 2020
Q4 2019
Q4 2020
% Margin
% Margin
Financial Update - FY 2020
($MM)
Card Payment Volume
Gross Profit (1)
Adjusted EBITDA
FY 2019
FY 2020
FY 2019
FY 2020
FY 2019
FY 2020
% Margin
% Margin
Strong Liquidity Position as of January 31, 2021
Preliminary Financial Metrics as of January 31, 2021
Liquidity
Leverage
Focused on Maintaining Significant Liquidity
Preserve liquidity and profitability through:
̶ Focusing on high priority hiring
̶ Limiting discretionary expenses
̶ Negotiations with vendors
Significant cash raised from concurrent common stock and convertible notes offerings
Business continues to show high cash flow conversion
Continued investments in growth
Committed to Prudently Managing Leverage
Proceeds from concurrent common stock and convertible notes offerings
̶ Terminated existing interest rate hedge arrangement
̶ No interest payments, no principal due until maturity in 2026 (if not converted)
Established new $125 million revolver facility to provide flexibility for further acquisitions
̶ Secured net leverage covenant is 2.00x (definitionally excludes convertible notes balance)
Based on LTM January 2021 PF adjusted EBITDA, pro forma for adjusted EBITDA contribution of Ventanex, cPayPlus, and CPS Payments.
Section 2:
Strategy & Outlook
Multiple Levers to Continue to Drive Growth
Robust Growth & ProfitabilityRepay's Leading Platform & Attractive Market Opportunity Position It To Build On Its Record Of
EXECUTE ON EXISTING BUSINESS
BROADEN ADDRESSABLE MARKET
AND SOLUTIONS
Executing on Growth Plan
Further expansion in Canada, implementing one of the largest non-bank lenders in the country, expected to be live by early March
Ended the year with 43 total credit union customers, which represents approximately 350K collective members
Expanded TAM to $4.7 trillion(2) through strategic M&A focused on B2B merchant acquiring, mortgage servicing, B2B healthcare, B2B AP automation; continued focus on highly attractive, underserved verticals with unique payments needsNow actively processing in the Buy Now Pay Later spaceCompleted concurrent common stock and convertible notes offerings, as well as closed a new revolving credit facility - providing the Company with ample liquidity of $500+ million to pursue deals
Opening of a new software development office in Ireland, in partnership with a local firm called Protego, to enhance and accelerate new product and research & development capabilities
1) As of December 31, 2020; certain logos added post this date.
2) Third-party research and management estimates.
* Denotes new relationship added Q4 '20 and beyond
BROADENING ADDRESSABLE MARKET AND SOLUTIONS
REPAY's Growing B2B Payments Business
Combined AR and AP automation solutions provides a compelling value proposition to clients
$3.4Tn
10+
$4Bn
Total Addressable Market(1)Vertical End MarketsAnnualized Payment Volume(2)
3,000+
60,000+
~45
ClientsElectronic Payments-Enabled
Supplier NetworkIntegrated Software Partners
Note: All metrics include contributions from CPS Payments.
1) Third-party research and management estimates
2) Volume includes merchant acquiring credit and debit card , virtual card, and enhanced ACH
FY 2021 Outlook
This range assumes no further unforeseen COVID-related impacts, which could create substantial economic duress in 2021.
Note: REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures such as forecasted 2021 Adjusted EBITDA 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.
FY 2021 Gross Profit Outlook Bridge
REPAY's 2021 Gross Profit Outlook Represents ~23% Total Growth & ~15%(1) Organic Growth
2020A
1) Organic Growth excludes gross pross profit contributions from Ventanex, cPayPlus, and CPS in 2020 and 2021
2) $140MM represents high end of FY 2021 gross profit guidance
2021E
Section 3:
Appendix
Q4 2020 Financial Update
Change | ||||
($MM) | ||||
Card Payment Volume | $3,954.9 | $3,422.1 | $532.8 | 16% |
Total Revenue | $41.4 | $33.6 | $7.8 | 23% |
Cost of Services | 11.5 | 9.3 | 2.2 | 23% |
Gross Profit(1) | $30.0 | $24.3 | $5.6 | 23% |
SG&A(2) | 22.5 | 26.0 | (3.5) | 14% |
EBITDA | $7.5 | ($1.7) | $9.1 | 550% |
Depreciation and Amortization | 8.6 | 4.9 | 3.7 | 76% |
Interest Expense | 3.6 | 3.2 | 0.4 | 11% |
Income Tax (Benefit) | (4.0) | (2.3) | (1.7) | (74%) |
Net Income (Loss) | ($0.8) | ($7.5) | $6.8 | 90% |
Adjusted EBITDA(3) | $19.0 | $14.7 | $4.3 | 29% |
Adjusted Net Income(4) | $13.5 | $12.3 | $1.1 | 9% |
Three Months Ended December 31,
2020 | 2019 |
Amount | % |
1) Gross Profit is defined as Total Revenue less Cost of Services
2) SG&A includes expense associated with the change in fair value of tax receivable liability, change in fair value of contingent consideration and other income / expenses
3) See "Adjusted EBITDA Reconciliation" on slide 16 for reconciliation of Adjusted EBITDA to its most comparable GAAP measure
FY 2020 Financial Update
Change | ||||
($MM) | ||||
Card Payment Volume | $15,194.9 | $10,696.7 | $4,498.3 | 42% |
Total Revenue | $155.0 | $104.6 | $50.4 | 48% |
Other Cost of Services | 41.4 | 25.9 | 15.6 | 60% |
Gross Profit(1) | $113.6 | $78.7 | $34.9 | 44% |
SG&A(2) | 97.2 | 100.0 | (2.7) | (3%) |
EBITDA | $16.4 | ($21.2) | $37.6 | (177% ) |
Depreciation and Amortization | 28.2 | 14.6 | 13.6 | 93% |
Interest Expense | 14.4 | 9.1 | 5.4 | 59% |
Income Tax (Benefit) | (12.4) | (5.0) | (7.4) | - |
Net Income (Loss) | ($13.9) | ($39.9) | $26.0 | (65% ) |
Adjusted EBITDA(3) | $68.2 | $48.4 | $19.7 | 41% |
Adjusted Net Income(4) | $43.7 | $39.5 | $4.2 | 11% |
Twelve months ended December 31,
2020 | 2019 |
Amount | % |
1) Gross Profit is defined as Total Revenue less Cost of Services
2) SG&A includes expense associated with the change in fair value of tax receivable liability, change in fair value of contingent consideration and other income / expenses
3) See "Adjusted EBITDA Reconciliation" on slide 16 for reconciliation of Adjusted EBITDA to its most comparable GAAP measure
Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation
($MM)
2020A | 2019A |
Q4 2020 | Q4 2019 |
Net Income (Loss) | ($13.9) | ($39.9) | ($0.8) | ($7.5) |
Interest Expense | 14.4 | 9.1 | 3.6 | 3.2 |
Depreciation and Amortization(1) | 28.2 | 14.6 | 8.6 | 4.9 |
Income Tax Expense (Benefit) | (12.4) | (5.0) | (4.0) | (2.3) |
EBITDA | $16.4 | ($21.2) | $7.5 | ($1.7) |
Loss on extinguishment of debt(2) | - | 1.4 | - | 0.1 |
Non-cash change in fair value of contingent consideration(3) | - | - | ||
(2.5) | 0.5 | |||
Non-cash change in fair value of assets and liabilities(4) | ||||
12.4 | 1.6 | 0.4 | 1.2 | |
Share-based compensation expense(5) | ||||
19.4 | 22.9 | 4.7 | 12.3 | |
Transaction expenses(6) | ||||
10.9 | 40.1 | 3.1 | 2.6 | |
Management Fees(7) | - | - | - | |
0.2 | ||||
Legacy commission related charges(8) | ||||
8.6 | 2.6 | 1.4 | 0.1 | |
Employee recruiting costs(9) | ||||
0.2 | 0.1 | 0.1 | 0.0 | |
Loss on Disposition of Property and Equipment | ||||
- | - | 0.0 | - | |
Other taxes(10) | 0.4 | 0.2 | 0.0 | (0.0) |
Restructuring and other strategic initiative costs(11) | ||||
1.1 | 0.4 | 0.5 | 0.1 | |
Other non-recurring charges(12) | 1.2 | 0.2 | 0.8 | 0.1 |
Adjusted EBITDA | $68.2 | $48.4 | $19.0 | $14.7 |
1) For the three and twelve months ended December 31, 2020 reflects (i) amortization of the customer relationships intangibles acquired through Hawk Parent's acquisitions of PaidSuite and Paymaxx during the year ended December 31, 2017 and the recapitalization transaction in 2016, through which Hawk Parent was formed in connection with the acquisition of a majority interest in Repay Holdings, LLC by certain investment funds sponsored by, or affiliated with, Corsair Capital LLC., (ii) customer relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and (iii) customer relat ionships, non compete agreement, and software intangibles acquired through Repay Holdings, LLC's acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus, and CPS Payments subsequent to the close of the respective acquisitions. For the three and twelve months ended December 31, 2019, reflects amortization of customer relationships intangibles acquired through Hawk Parent's acquisitions and the recapitalization transaction in 2016 and the acquisition of TriSource Solutions and APS Payments described previously. This adjustment excludes the amortization of other intangible assets which were acquired in the regular course of business, such as capitalized internally developed software and purchased software.
2) Reflects write-offs of debt issuance costs relating to Hawk Parent's term loans and prepayment penalties relating to its previous debt facilities.
3) Reflects the changes in management's estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the most recent balance sheet date.
4) Reflects the changes in management's estimates of the fair value of the liability relating to the Tax Receivable Agreement.
5) Represents compensation expense associated with equity compensationplans, totaling $4,679,451 and $19,455,800 inthe three and twelve months ended December 31, 2020, respectively, $658,195 and $908,978 inthe Predecessor periods fromJuly 1, 2019 to July 10, 2019 and January 1, 2019 to July 10, 2019, respectively, and $22,013,287 as a result of new grants made in the Successor period fr om July 11, 2019 to December 31, 2019.
6) Primarily consists of (i) during the three and twelve months ended December 31, 2020, professional service fees and other costs incurred in connection with the acquisition of CPS Payments, and additional transaction expenses incurred in connection with the Business Combination and the acquisitions of TriSource Solutions, APS Payments, Ventanex and cPayPlus, which closed in prior periods, as well as professional service expenses related to the follow-on offerings and (ii) during the three and twelve months ended December 31, 2019, professional service fees and other costs in connection with the Business Combination, as well as the acquisitions of TriSource Solutions and APS Payments.
7) Reflects management fees paid to Corsair Investments, L.P. pursuant to the management agreement, which terminated upon the completion of the Business Combination.
8) Represents payments made to certain employees and partners in connection with significant restructuring of their commission structures. These payments represented commission structure changes which are not in the ordinary course of business.
9) Represents payments made to third-party recruiters in connection with a significant expansion of our personnel, which REPAY expects will become more moderate in subsequent periods.
10) Reflects franchise taxes and other non-income based taxes.
11) Reflects consulting fees related to our processing services and other operational improvements, including restructuring and i ntegration activities related to our acquired businesses, that were not in the ordinary course during the three and twelve months ended December 31, 2020 and 2019, and additionally one-time expenses related to the creation of a new entity in connection with equity arrangements for the members of Hawk Parent in connection with the Business Combination in the twelve months ended December 31, 2019.
12) For the three and twelve months ended December 31, 2020, reflects expenses incurred related to one-time accounting system and compensation plan implementation related to becoming a public company, as well as extraordinary refunds to customers and other payments related to COVID-19. For the twelve months ended December 31, 2019, reflects expenses incurred related to other one-time legal and compliance matters. Additionally, for the three months ended December 31, 2019 reflects a one-time credit issued to a customer which was not in the ordinary course of business.
Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation
($MM)
2020A | 2019A |
Q4 2020 | Q4 2019 |
Net Income (Loss) | ($13.9) | ($39.9) | ($0.8) | ($7.5) |
Amortization of Acquisition-Related Intangibles(1) | 19.5 | 9.9 | 6.0 | 3.4 |
Loss on extinguishment of debt(2) | - | 1.4 | - | 0.1 |
Non-cash change in fair value of contingent consideration(3) | (2.5) | - | 0.5 | - |
Non-cash change in fair value of assets and liabilities(4) | 12.4 | 1.6 | 0.4 | 1.2 |
Share-based compensation expense(5) | 19.4 | 22.9 | 4.7 | 12.3 |
Transaction expenses(6) | 10.9 | 40.1 | 3.1 | 2.6 |
Management Fees(7) | - | 0.2 | - | - |
Legacy commission related charges(8) | 8.6 | 2.6 | 1.4 | 0.1 |
Employee recruiting costs(9) | 0.2 | 0.1 | 0.1 | 0.0 |
Restructuring and other strategic initiative costs(10) | 1.1 | 0.4 | 0.5 | 0.1 |
Other non-recurring charges(11) | 1.2 | 0.2 | 0.8 | 0.1 |
Pro forma taxes at effective rate(12) | (13.2) | - | (3.2) | - |
Adjusted Net Income | $43.7 | $39.5 | $13.5 | $12.3 |
1) For the three and twelve months ended December 31, 2020 reflects (i) amortization of the customer relationships intangibles acquired through Hawk Parent's acquisitions of PaidSuite and Paymaxx during the year ended December 31, 2017 and the recapitalization transaction in 2016, through which Hawk Parent was formed in connection with the acquisition of a majority interest in Repay Holdings, LLC by certain investment funds sponsored by, or affiliated with, Corsair Capital LLC., (ii) customer relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and (iii) customer relationships, non compete agreement, and software intangibles acquired through Repay Holdings, LLC's acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus, and CPS Payments subsequent to the close of the respective acquisitions. For the three and twelve months ended December 31, 2019, reflects amortization of customer relationships intangibles acquired through Hawk Parent's acquisitions and the recapitalization transaction in 2016 and the acquisition of TriSource Solutions and APS Payments described previously. This adjustment excludes the amortization of other intangible assets which were acquired in the regular course of business, such as capitalized internally developed software and purchased
software.
2) Reflects write-offs of debt issuance costs relating to Hawk Parent's term loans and prepayment penalties relating to its previous debt facilities.
3) Reflects the changes in management's estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the most recent balance sheet date.
4) Reflects the changes in management's estimates of the fair value of the liability relating to the Tax Receivable Agreement.
5) Represents compensation expense associated with equity compensation plans, totaling $4,679,451 and $19,455,800 in the three and twelve months ended December 31, 2020, respectively, $658,195 and $908,978 in the Predecessor periods fromJuly 1, 2019 to July 10, 2019 and January 1, 2019 to July 10, 2019, respectively, and $22,013,287 as a result of new grants made in the Successor period from July 11, 2019 to December 31, 2019.
6) Primarily consists of (i) during the three and twelve months ended December 31, 2020, professional service fees and other costs incurred in connection with the acquisition of CPS Payments, and additional transaction expenses incurred in connection with the Business Combination and the acquisitions of TriSource Solutions, APS Payments, Ventanex and cPayPlus, which closed in prior periods, as well as professional service expenses related to the follow-on offerings and (ii) during the three and twelve months ended December 31, 2019, professional service fees and other costs in connection with the Business Combination, as well as the acquisitions of TriSource Solutions and APS Payments.
7) Reflects management fees paid to Corsair Investments, L.P. pursuant to the management agreement, which terminated upon the completion of the Business Combination.
8) Represents payments made to certain employees and partners in connection with significant restructuring of their commission structures. These payments represented commission structure changes which are not in the ordinary course of business.
9) Represents payments made to third-party recruiters in connection with a significant expansion of our personnel, which REPAY expects will become more moderate in subsequent periods.
10) Reflects consulting fees related to our processing services and other operational improvements, including restructuring and i ntegration activities related to our acquired businesses, that were not in the ordinary course during the three and twelve months ended December 31, 2020 and 2019, and additionally one-time expenses related to the creation of a new entity in connection with equity arrangements for the members of Hawk Parent in connection with the Business Combination in the twelve months ended December 31, 2019.
11) For the three and twelve months ended December 31, 2020, reflects expenses incurred related to one-time accounting system and compensation plan implementation related to becoming a public company, extraordinary refunds to customers and other payments related to COVID-19, and non-cash rent expense. For the twelve months ended December 31, 2019, reflects expenses incurred related to other one-time legal and compliance matters. Additionally, for the three months ended December 31, 2019 reflects a one-time credit issued to acustomer which was not in the ordinary course of business.
12) Represents pro forma income tax adjustment effect associated with items adjusted above. As Hawk Parent, as the accounting Predecessor, was not subject to income taxes, the tax effect above was calculated on the adjustments related to the Successor period only.
Depreciation and Amortization Detail
Depreciation and Amortization
($MM)
2020A | 2019A |
Q4 2020 | Q4 2019 |
Acquisition-Related Intangibles | $19.5 | $9.9 | $6.0 | $3.4 |
Software | 7.5 | 3.9 | 2.3 | 1.2 |
Reseller Buyouts | 0.1 | 0.1 | 0.0 | 0.0 |
Amortization | 27.0 | 13.9 | 8.3 | 4.6 |
Depreciation | 1.2 | 0.7 | 0.3 | 0.3 |
Total Depreciation & Amortization | $28.2 | $14.6 | $8.6 | $4.9 |
Note: Adjusted Net Income excludes amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions (see corresponding adjustments in the reconciliation of net income to Adjusted Net Income on slide 17). Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although we exclude amortization from acquisition-related intangibles from our non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation. Amortization of
intangibles that relate to past acquisitions will recur in future periods until such intangibles have been fully amortized. A ny future acquisitions may result in the amortization of additional intangibles.
Share Count
Shares 1 | Number | Notes 2 |
Shares held by Public | 75,159,804 |
|
Shares Underlying the Post-Merger Repay Units (Management) | 7,746,641 |
|
Shares Underlying the Post-Merger Repay Units (Other) | 212,519 |
|
Management Restricted Shares (Vested) | 1,333,966 |
|
Board of Director Shares | 1,507,970 |
|
Sub-Total (as-converted basis) | 85,960,900 | |
Unvested Management Restricted Shares (Time-Based) | 2,148,861 |
|
Unvested Management Restricted Shares (Performance-Based) | 265,293 |
|
Unvested Board of Director Grants | 48,587 |
|
Total Fully Diluted Shares (as-converted basis) | 88,423,641 |
1) Shares refer to Class A common stock on an as-converted basis; current as of February 19, 2021. Does not include any shares issuable upon conversion of the Company's 0.00% Convertible Senior Notes due 2026.
2) This presentation is not a complete summary of all relevant terms and conditions related to the shares or any units, including with respect to vesting or other key terms. For more information, see the Company's SEC filings.
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Repay Holdings Corporation published this content on 01 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 March 2021 23:07:02 UTC.
