i3 Verticals, Inc. (Nasdaq: IIIV) (“i3 Verticals” or the
“Company”) today reported its financial results for the fiscal
third quarter ended June 30, 2020.
Highlights for the fiscal third quarter and nine months ended
June 30, 2020 vs. 2019
- Third quarter revenue was $31.6 million, a decrease of 68% over
the prior year's third quarter. Revenue for the nine months ended
June 30, 2020, was $111.9 million, a decrease of 58% over the prior
year's first nine months. Results for 2020 reflect the adoption of
Accounting Standards Codification Topic 606, Revenue from Contracts
with Customers1.
- Third quarter adjusted net revenue2, which excludes acquisition
revenue adjustments and interchange and network fees, was $31.6
million, a decrease of 12% over the prior year's third quarter.
Adjusted net revenue2 for the nine months ended June 30, 2020, was
$112.5 million, an increase of 16% over the prior year's first nine
months.
- Third quarter net loss was $2.8 million, compared to a net loss
of $0.6 million in the prior year's third quarter. Net income for
the nine months ended June 30, 2020, was $1.0 million, an increase
from $0.5 million in the prior year's first nine months.
- Third quarter adjusted EBITDA2 was $7.1 million, a decrease of
27% over the prior year's third quarter. Adjusted EBITDA2 for the
nine months ended June 30, 2020, was $28.9 million, an increase of
7% over the prior year's first nine months.
- Third quarter adjusted EBITDA2 as a percentage of adjusted net
revenue2 was 22.3%, compared to 26.9% in the prior year's third
quarter. For the nine months ended June 30, 2020, adjusted EBITDA2
as a percentage of adjusted net revenue2 was 25.7%, compared to
27.8% for the prior year's first nine months.
- Third quarter diluted net loss per share available to Class A
common stock was $0.02, compared to diluted net loss per share
available to Class A common stock of $0.12 in the prior year's
third quarter. For the nine months ended June 30, 2020, diluted net
income per share available to Class A common stock was $0.01,
compared to diluted net loss per share available to Class A common
stock of $0.23 for the prior year's first nine months.
- For the three and nine months ended June 30, 2020, pro forma
adjusted diluted earnings per share2, which gives pro forma effect
to the Company's going forward effective tax rate, was $0.13 and
$0.57, respectively, compared to $0.20 and $0.59 for the three and
nine months ended June 30, 2019, respectively.
- Integrated payments3 were 51% and 54% of payment volume for the
three and nine months ended June 30, 2020, respectively. Integrated
payments3 for the three months ended June 30, 2020 were lower than
those for the three months ended June 30, 2019 due primarily to
reduced volume in our education and public sector verticals as a
result of the COVID-19 pandemic.
- At June 30, 2020, the ratio of consolidated interest coverage
ratio was 7.00x, total leverage ratio was 3.69x and consolidated
senior leverage ratio was 0.61x. These ratios are defined in the
Company's Senior Secured Credit Facility.
- Subsequent to June 30, 2020, the Company completed the
acquisition of two businesses for a collective purchase price of
$16.4 million in cash and revolving line of credit proceeds, and an
amount of contingent consideration, which is still being valued.
One acquisition expands our geographic reach and software
capabilities in the public sector vertical. The other adds
text-to-pay capabilities and other software solutions in our
non-profit vertical.
1.
Effective October 1, 2019, our revenues
are presented net of interchange and network fees in accordance
with Accounting Standards Codification Topic 606, Revenue from
Contracts with Customers. This change in presentation affected our
reported revenues and operating expenses for the three and nine
months ended June 30, 2020, by the same amount and had no effect on
our income from operations.
2.
Represents a non-GAAP financial measure.
For additional information (including reconciliation information),
see the attached schedules to this release.
3.
Integrated payments represents payment
transactions that are generated in situations where payment
technology is embedded within the Company's own proprietary
software, a client’s software or critical business process.
Greg Daily, Chairman and CEO of i3 Verticals, commented, “We are
pleased with our third quarter results, especially in light of the
COVID-19 pandemic. We saw a sharp decrease in our processing volume
during the second half of March, and our education vertical was
particularly affected by school closures. Despite the volume
decreases and school closures, our payment volume and financial
results in our other verticals began to steadily recover throughout
the third quarter as restrictions across the country eased. We are
proud of how our team members supported each other and our
customers during this challenging time, and we believe we are well
positioned going forward.
“Our two recent acquisitions are evidence of our commitment to
our verticals strategy – one a great fit within our public sector
market and the other in our non-profit vertical. The latter offers
a text-to-pay solution and related software products, meeting our
goal of acquiring a software platform within that vertical. In
addition to representing a positive step toward growth, this
acquisition strengthens our presence in the non-profit vertical,
thus providing future acquisition opportunities. We are excited
about how each acquisition offers integrated solutions to a
dedicated and stable customer base. We continue to develop our
acquisition pipeline and will monitor the economic conditions and
our leverage as we execute on our acquisition strategy.”
2020 Outlook
The COVID-19 pandemic has created significant uncertainty in the
economy and the extent to which the COVID-19 pandemic will impact
the Company's future results is difficult to reasonably estimate at
this time. Therefore, the Company is not providing a financial
outlook for the fiscal year ending September 30, 2020.
Conference Call
The Company will host a conference call on Tuesday, August 11,
2020, at 8:30 a.m. ET, to discuss financial results and operations.
To listen to the call live via telephone, participants should dial
(929) 477-0577 approximately 10 minutes prior to the start of the
call. A telephonic replay will be available from 11:30 a.m. ET on
August 11, 2020, through August 18, 2020, by dialing (719) 457-0820
and entering Confirmation Code 4401933.
To listen to the call live via webcast, participants should
visit the “Investors” section of the Company’s website,
www.i3verticals.com, and go to the “Events & Presentations”
page approximately 10 minutes prior to the start of the call. The
online replay will be available on this page of the Company’s
website beginning shortly after the conclusion of the call and will
remain available for 30 days.
Non-GAAP Measures
This press release contains information prepared in conformity
with GAAP as well as non-GAAP information. It is management’s
intent to provide non-GAAP financial information to enhance
understanding of the Company's consolidated financial information
as prepared in accordance with GAAP. This non-GAAP information
should be considered by the reader in addition to, but not instead
of, the financial statements prepared in accordance with GAAP. Each
non-GAAP financial measure and the most directly comparable GAAP
financial measure are presented so as not to imply that more
emphasis should be placed on the non-GAAP measure. The non-GAAP
financial information presented may be determined or calculated
differently by other companies.
Additional information about non-GAAP financial measures,
including, but not limited to, adjusted net revenue, pro forma
adjusted net income, adjusted EBITDA and pro forma adjusted diluted
EPS, and a reconciliation of those measures to the most directly
comparable GAAP measures is included on pages 9 through 11 in the
financial schedules of this release.
About i3 Verticals
Helping drive the convergence of software and payments, i3
Verticals delivers seamlessly integrated payment and software
solutions to small- and medium-sized businesses and other
organizations in strategic vertical markets, such as education,
non-profit, the public sector, property management, and healthcare
and to the business‑to‑business payments market. With a broad suite
of payment and software solutions that address the specific needs
of its clients in each strategic vertical market, i3 Verticals
processed approximately $14.2 billion in total payment volume for
the 12 months ended June 30, 2020.
Forward-Looking Statements
This release contains forward-looking statements that are
subject to risks and uncertainties. All statements other than
statements of historical fact or relating to present facts or
current conditions included in this release are forward-looking
statements, including any statements regarding guidance and
statements of a general economic or industry specific nature.
Forward-looking statements give the Company's current expectations
and projections relating to its financial condition, results of
operations, guidance, plans, objectives, future performance and
business. You generally can identify forward-looking statements by
the fact that they do not relate strictly to historical or current
facts. These statements may include words such as “anticipate,”
“estimate,” “expect,” “project,” “plan,” “intend,” “believe,”
“may,” “will,” “should,” “could have,” “exceed,” “significantly,”
“likely” and other words and terms of similar meaning in connection
with any discussion of the timing or nature of future operating or
financial performance or other events.
The forward-looking statements contained in this release are
based on assumptions that we have made in light of the Company's
industry experience and its perceptions of historical trends,
current conditions, expected future developments and other factors
we believe are appropriate under the circumstances. As you review
and consider information presented herein, you should understand
that these statements are not guarantees of future performance or
results. They depend upon future events and are subject to risks,
uncertainties and assumptions. Although we believe that these
forward-looking statements are based on reasonable assumptions, you
should be aware that many factors could affect the Company's actual
future performance or results and cause them to differ materially
from those anticipated in the forward-looking statements. Certain
of these factors and other risks are discussed in the Company's
filings with the U.S. Securities and Exchange Commission and
include, but are not limited to: (i) the anticipated impact to the
Company’s business operations, payment volume and volume attrition
due to the recent global pandemic of a novel strain of the
coronavirus (COVID-19); (ii) the Company’s indebtedness and the
ability to maintain compliance with the financial covenants in the
Company’s senior secured credit facility in light of the impacts of
the COVID-19 pandemic; (iii) the ability to meet the Company’s
liquidity needs in light of the impacts of the COVID-19 pandemic;
(iv) the ability to raise additional funds on terms acceptable to
us, if at all, whether debt, equity or a combination thereof; (v)
the triggering of impairment testing of the Company’s fair-valued
assets, including goodwill and intangible assets, in the event of a
decline in the price of the Company’s Class A common stock; (vi)
the ability to generate revenues sufficient to maintain
profitability and positive cash flow; (vii) competition in the
Company's industry and the ability to compete effectively; (viii)
the dependence on non-exclusive distribution partners to market the
Company's products and services; (ix) the ability to keep pace with
rapid developments and changes in the Company's industry and
provide new products and services; (x) liability and reputation
damage from unauthorized disclosure, destruction or modification of
data or disruption of the Company's services; (xi) technical,
operational and regulatory risks related to the Company's
information technology systems and third-party providers’ systems;
(xii) reliance on third parties for significant services; (xiii)
exposure to economic conditions and political risks affecting
consumer and commercial spending, including the use of credit
cards; (xiv) the ability to increase the Company's existing
vertical markets, expand into new vertical markets and execute the
Company's growth strategy; (xv) the ability to successfully
identify acquisition targets, complete those acquisitions and
effectively integrate those acquisitions into the Company's
services; (xvi) potential degradation of the quality of the
Company's products, services and support; (xvii) the ability to
retain clients, many of which are small- and medium-sized
businesses, which can be difficult and costly to retain; (xviii)
the Company's ability to successfully manage its intellectual
property; (xix) the ability to attract, recruit, retain and develop
key personnel and qualified employees; (xx) risks related to laws,
regulations and industry standards; (xxi) operating and financial
restrictions imposed by the Company's senior secured credit
facility; (xxii) risks related to the accounting method for the
Company’s 1.0% Exchangeable Senior Notes due February 15, 2025 (the
“Exchangeable Notes”); (xxiii) the ability to raise the funds
necessary to settle exchanges of the Exchangeable Notes or to
repurchase the Exchangeable Notes upon a fundamental change; (xxiv)
risks related to the conditional exchange feature of the
Exchangeable Notes; and (xxv) the risk factors included in the
Company's Annual Report on Form 10-K for the year ended September
30, 2019 and in our subsequent filings. Should one or more of these
risks or uncertainties materialize, or should any of these
assumptions prove incorrect, the Company's actual results may vary
in material respects from those projected in these forward-looking
statements.
Any forward-looking statement made by us in this release speaks
only as of the date of this release. Factors or events that could
cause the Company's actual results to differ may emerge from time
to time, and it is not possible for us to predict all of them. The
Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
i3 Verticals, Inc.
Consolidated Statements of Operations
(Unaudited)
($ in thousands, except share and
per share amounts)
Three months ended June
30,
Nine months ended June
30,
2020
2019
% Change
2020
2019
% Change
Revenue
$
31,573
$
97,483
(68)%
$
111,862
$
267,745
(58)%
Operating expenses
Interchange and network fees(1)
63,263
n/m
173,777
n/m
Other costs of services
10,001
11,431
(13)%
34,874
31,414
11%
Selling, general and administrative
18,133
17,587
3%
58,206
44,422
31%
Depreciation and amortization
4,475
4,425
1%
13,668
11,875
15%
Change in fair value of contingent
consideration
(1,473
)
(417
)
n/m
(1,461
)
1,736
(184)%
Total operating expenses
31,136
96,289
(68)%
105,287
263,224
(60)%
Income from operations
437
1,194
n/m
6,575
4,521
45%
Other expenses
Interest expense, net
2,423
1,918
26%
6,621
3,987
66%
Other expense
829
—
n/m
829
—
n/m
Total other expenses
3,252
1,918
70%
7,450
3,987
87%
(Loss) income before income taxes
(2,815
)
(724
)
289%
(875
)
534
(264)%
Benefit from income taxes
(5
)
(131
)
(96)%
(1,918
)
(2
)
n/m
Net (loss) income
(2,810
)
(593
)
n/m
1,043
536
95%
Net (loss) income attributable to
non-controlling interest
(2,454
)
598
n/m
811
2,651
(69)%
Net (loss) income attributable to i3
Verticals, Inc.
$
(356
)
$
(1,191
)
n/m
$
232
$
(2,115
)
n/m
Net (loss) income per share available to
Class A common stock:
Basic
$
(0.02
)
$
(0.12
)
$
0.02
$
(0.23
)
Diluted
$
(0.02
)
$
(0.12
)
$
0.01
$
(0.23
)
Weighted average shares of Class A common
stock outstanding:
Basic
14,858,858
10,064,785
14,515,506
9,254,549
Diluted
14,858,858
10,064,785
15,919,364
9,254,549
n/m = not meaningful
__________________________
1.
Effective October 1, 2019, our revenues
are presented net of interchange and network fees in accordance
with Accounting Standards Codification Topic 606, Revenue from
Contracts with Customers.
i3 Verticals, Inc. Financial
Highlights
(Unaudited)
($ in thousands, except per share
amounts)
Three months ended June
30,
Nine months ended June
30,
2020
2019
% Change
2020
2019
% Change
Adjusted net revenue (non-GAAP)
$
31,597
$
36,014
(12)%
$
112,532
$
97,032
16%
Adjusted EBITDA (non-GAAP)
7,051
9,694
(27)%
28,875
27,019
7%
Pro forma adjusted diluted earnings per
share (non-GAAP)
$
0.13
$
0.20
(35)%
$
0.57
$
0.59
(3)%
i3 Verticals, Inc.
Supplemental Volume Information
(Unaudited)
($ in thousands)
Three months ended June
30,
Nine months ended June
30,
2020
2019
2020
2019
Payment volume(1)
$
2,980,702
$
3,409,222
$
10,397,555
$
9,295,879
__________________________
1.
Payment volume is the net dollar value of
both 1) Visa, Mastercard and other payment network transactions
processed by the Company's clients and settled to clients by us and
2) ACH transactions processed by the Company's clients and settled
to clients by the Company.
i3 Verticals, Inc. Segment
Summary
(Unaudited)
($ in thousands)
For the Three Months Ended
June 30, 2020
Merchant Services
Proprietary Software and
Payments
Other
Total
Revenue
$
21,531
$
10,458
$
(416
)
$
31,573
Operating expenses
Other costs of services
9,394
1,023
(416
)
10,001
Selling general and administrative
5,630
6,878
5,625
18,133
Depreciation and amortization
2,821
1,476
178
4,475
Change in fair value of contingent
consideration
(1,345
)
(128
)
—
(1,473
)
Income (loss) from operations
$
5,031
$
1,209
$
(5,803
)
$
437
Payment volume
$
2,909,731
$
70,971
$
—
$
2,980,702
For the Nine Months Ended June
30, 2020
Merchant Services
Proprietary Software and
Payments
Other
Total
Revenue
$
74,014
$
39,205
$
(1,357
)
$
111,862
Operating expenses
Other costs of services
32,804
3,426
(1,356
)
34,874
Selling general and administrative
18,421
22,531
17,254
58,206
Depreciation and amortization
8,629
4,513
526
13,668
Change in fair value of contingent
consideration
(2,951
)
1,490
—
(1,461
)
Income (loss) from operations
$
17,111
$
7,245
$
(17,781
)
$
6,575
Payment volume
$
9,938,497
$
459,058
$
—
$
10,397,555
For the Three Months Ended
June 30, 2019
Merchant Services
Proprietary Software and
Payments
Other
Total
Revenue
$
87,264
$
10,219
$
—
$
97,483
Operating expenses
Interchange and network fees
61,744
1,519
—
63,263
Other costs of services
10,527
904
—
11,431
Selling general and administrative
6,244
6,066
5,277
17,587
Depreciation and amortization
2,972
1,308
145
4,425
Change in fair value of contingent
consideration
155
(572
)
—
(417
)
Income (loss) from operations
$
5,622
$
994
$
(5,422
)
$
1,194
Payment volume
$
3,268,141
$
141,081
$
—
$
3,409,222
For the Nine Months Ended June
30, 2019
Merchant Services
Proprietary Software and
Payments
Other
Total
Revenue
$
241,841
$
25,904
$
—
$
267,745
Operating expenses
Interchange and network fees
169,229
4,548
—
173,777
Other costs of services
29,648
1,766
—
31,414
Selling general and administrative
18,561
12,728
13,133
44,422
Depreciation and amortization
8,671
2,811
393
11,875
Change in fair value of contingent
consideration
(554
)
2,290
—
1,736
Income (loss) from operations
$
16,286
$
1,761
$
(13,526
)
$
4,521
Payment volume
$
8,866,400
$
429,479
$
—
$
9,295,879
i3 Verticals, Inc.
Consolidated Balance Sheets
($ in thousands, except share and
per share amounts)
June 30,
September 30,
2020
2019
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
9,136
$
1,119
Accounts receivable, net
16,350
15,335
Prepaid expenses and other current
assets
5,789
4,117
Total current assets
31,275
20,571
Property and equipment, net
5,506
5,026
Restricted cash
1,550
2,081
Capitalized software, net
14,340
15,454
Goodwill
167,054
168,284
Intangible assets, net
99,884
107,419
Deferred tax asset
35,671
28,138
Other assets
5,193
2,329
Total assets
$
360,473
$
349,302
Liabilities and equity
Liabilities
Current liabilities
Accounts payable
$
4,559
$
3,438
Accrued expenses and other current
liabilities
15,465
21,560
Deferred revenue
9,714
10,237
Total current liabilities
29,738
35,235
Long-term debt, less current portion and
debt issuance costs, net
134,114
139,298
Long-term tax receivable agreement
obligations
25,933
23,204
Other long-term liabilities
3,260
9,124
Total liabilities
193,045
206,861
Commitments and contingencies (see Note
9)
Stockholders' equity
Preferred stock, par value $0.0001 per
share, 10,000,000 shares authorized; 0 shares issued and
outstanding as of June 30, 2020 and September 30, 2019
—
—
Class A common stock, par value $0.0001
per share, 150,000,000 shares authorized; 15,085,813 and 14,444,115
shares issued and outstanding as of June 30, 2020 and September 30,
2019, respectively
1
1
Class B common stock, par value $0.0001
per share, 40,000,000 shares authorized; 12,391,621 and 12,921,637
shares issued and outstanding as of June 30, 2020 and September 30,
2019, respectively
1
1
Additional paid-in capital
107,654
82,380
Accumulated (deficit) earnings
(1,372
)
(2,309
)
Total stockholders' equity
106,284
80,073
Non-controlling interest
61,144
62,368
Total equity
167,428
142,441
Total liabilities and stockholders'
equity
$
360,473
$
349,302
i3 Verticals, Inc.
Consolidated Cash Flow Data
(Unaudited)
($ in thousands)
Nine months ended June
30,
2020
2019
Net cash provided by operating
activities
$
10,087
$
16,297
Net cash used in investing activities
$
(5,744
)
$
(131,705
)
Net cash provided by financing
activities
$
3,143
$
117,296
Reconciliation of GAAP to Non-GAAP Financial Measures
The Company believes that non-GAAP financial measures are
important to enable investors to understand and evaluate its
ongoing operating results. Accordingly, i3 Verticals includes
non-GAAP financial measures when reporting its financial results to
stockholders and potential investors in order to provide them with
an additional tool to evaluate the Company’s ongoing business
operations. i3 Verticals believes that the non-GAAP financial
measures are representative of comparative financial performance
that reflects the economic substance of i3 Verticals’ current and
ongoing business operations.
Although non-GAAP financial measures are often used to measure
the Company's operating results and assess its financial
performance, they are not necessarily comparable to similarly
titled measures of other companies due to potential inconsistencies
in the method of calculation. i3 Verticals believes that its
provision of non-GAAP financial measures provides investors with
important key financial performance indicators that are utilized by
management to assess the Company's operating results, evaluate the
business and make operational decisions on a prospective,
going-forward basis. Hence, management provides disclosure of
non-GAAP financial measures to give stockholders and potential
investors an opportunity to see i3 Verticals as viewed by
management, to assess i3 Verticals with some of the same tools that
management utilizes internally and to be able to compare such
information with prior periods. i3 Verticals believes that
inclusion of non-GAAP financial measures provides investors with
additional information to help them better understand its financial
statements just as management utilizes these non-GAAP financial
measures to better understand the business, manage budgets and
allocate resources.
i3 Verticals, Inc.
Reconciliation of GAAP Net Income to Non-GAAP Pro Forma Adjusted
Net Income and Non-GAAP Adjusted EBITDA
(Unaudited)
($ in thousands)
Three months ended June
30,
Nine months ended
June 30,
2020
2019
2020
2019
Net income (loss) attributable to i3
Verticals, Inc.
$
(356
)
$
(1,191
)
$
232
$
(2,115
)
Net income (loss) attributable to
non-controlling interest
(2,454
)
598
811
2,651
Non-GAAP adjustments:
Benefit from income taxes
(5
)
(131
)
(1,918
)
(2
)
Financing-related expenses(1)
22
—
243
—
Non-cash change in fair value of
contingent consideration(2)
(1,473
)
(417
)
(1,461
)
1,736
Equity-based compensation(3)
2,816
1,808
7,450
4,122
Acquisition revenue adjustments(4)
24
1,794
670
3,064
Acquisition-related expenses(5)
458
826
1,303
1,447
Acquisition intangible amortization(6)
3,552
3,641
10,873
9,751
Non-cash interest expense(7)
1,436
306
2,415
771
Other taxes(8)
54
64
189
254
Non-cash loss on Exchangeable Note
repurchases(9)
828
—
828
—
COVID-19 related expenses(10)
239
—
239
—
Non-GAAP pro forma adjusted income
before taxes
5,141
7,298
21,874
21,679
Pro forma taxes at effective tax
rate(11)
(1,285
)
(1,825
)
(5,469
)
(5,420
)
Pro forma adjusted net
income(12)
$
3,856
$
5,473
$
16,405
$
16,259
Cash interest expense, net(13)
987
1,612
4,206
3,216
Pro forma taxes at effective tax
rate(11)
1,285
1,825
5,469
5,420
Depreciation, non-acquired intangible
asset amortization and internally developed software
amortization(14)
923
784
2,795
2,124
Adjusted EBITDA
$
7,051
$
9,694
$
28,875
$
27,019
____________________
1.
Financing-related expenses includes
expenses directly related to certain transactions as part of
financing transactions.
2.
Non-cash change in fair value of
contingent consideration 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 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.
3.
Equity-based compensation expense
consisted of $2,816 and $1,808 related to stock options issued
under the Company's 2018 Equity Incentive Plan during the three
months ended June 30, 2020 and 2019, respectively, and $7,450 and
$4,122 related to stock options issued under the Company's 2018
Equity Incentive Plan during the nine months ended June 30, 2020
and 2019, respectively.
4.
Under GAAP, companies must adjust, as
necessary, beginning balances of acquired deferred revenue to fair
value as part of acquisition accounting as defined by GAAP.
Acquisition revenue adjustments remove the effect of these
adjustments to acquisition date fair value from acquisitions that
have closed as of the date of this earnings release.
5.
Acquisition-related expenses are the
professional service and related costs directly related to the
Company's acquisitions and are not part of its core
performance.
6.
Acquisition intangible amortization
reflects amortization of intangible assets and software acquired
through business combinations, acquired customer portfolios,
acquired referral agreements and related asset acquisitions.
7.
Non-cash interest expense reflects
amortization of debt discount and debt issuance costs and any
write-offs of debt issuance costs.
8.
Other taxes consist of franchise taxes,
commercial activity taxes and other non-income based taxes. Taxes
related to salaries or employment are not included.
9.
Non-cash loss on Exchangeable Note
repurchases reflects the loss on retirement of debt the Company
recorded during the relevant periods due to the carrying value
exceeding the fair value of the repurchased portion of the 1.0%
Exchangeable Senior Notes due 2025 (the “Exchangeable Notes”) at
the dates of repurchases.
10.
COVID-19 related expenses reflects
incremental expenses incurred as a result of the COVID-19 pandemic,
including employee severance expenses and legal expenses.
11.
Pro forma corporate income tax expense is
based on Non-GAAP adjusted income before taxes and is calculated
using a tax rate of 25.0% for both 2020 and 2019, based on blended
federal and state tax rates.
12.
Pro forma adjusted net income assumes that
all net income during that period was available to the holders of
the Company's Class A common stock.
13.
Cash interest expense, net represents all
interest expense net of interest income recorded on the Company's
statement of operations other than non-cash interest expense, which
represents amortization of debt discount and debt issuance costs
and any write-offs of debt issuance costs.
14.
Depreciation, non-acquired intangible
asset amortization and internally developed software amortization
reflects depreciation on the Company's property, plant and
equipment, net, and amortization expense on its internally
developed capitalized software.
i3 Verticals, Inc. GAAP
Diluted EPS and Non-GAAP Pro Forma Adjusted Diluted EPS
(Unaudited)
($ in thousands, except share and
per share amounts)
Three months ended June
30,
Nine months ended June
30,
2020
2019
2020
2019
Diluted net loss available to Class A
common stock per share
$
(0.02
)
$
(0.12
)
$
0.01
$
(0.23
)
Pro forma adjusted diluted earnings per
share (non-GAAP)(1)
$
0.13
$
0.20
$
0.57
$
0.59
Pro forma adjusted net income(2)
$
3,856
$
5,473
$
16,405
$
16,259
Pro forma weighted average shares of
adjusted diluted Class A common stock outstanding(3)
28,584,444
27,723,231
28,618,703
27,360,396
____________________
1.
Pro forma adjusted diluted earnings per
share is calculated using pro forma adjusted net income and the pro
forma weighted average shares of adjusted diluted Class A common
stock outstanding.
2.
Pro forma adjusted net income assumes that
all net income during the period is available to the holders of the
Company's Class A common stock. Further, pro forma adjusted diluted
earnings per share assumes that all Common Units in i3 Verticals,
LLC and the associated non-voting Class B common stock were
exchanged for Class A common stock at the beginning of the period
on a one for-one basis.
3.
Pro forma weighted average shares of
adjusted diluted Class A common stock outstanding include
12,404,368 and 16,184,026 outstanding shares of Class A common
stock issuable upon the exchange of Common Units in i3 Verticals,
LLC and 1,321,218 and 1,474,420 shares of unvested Class A common
stock and options for the three months ended June 30, 2020 and
2019, respectively. Pro forma weighted average shares of adjusted
diluted Class A common stock outstanding include 12,699,339 and
16,846,012 outstanding shares of Class A common stock issuable upon
the exchange of Common Units in i3 Verticals, LLC and 1,403,858 and
1,259,835 shares of unvested Class A common stock and options for
the nine months ended June 30, 2020 and 2019, respectively.
i3 Verticals, Inc.
Reconciliation of GAAP Revenue to Non-GAAP Adjusted Net
Revenue
(Unaudited)
($ in thousands)
Three months ended June
30,
Nine months ended June
30,
2020
2019
2020
2019
Revenue
$
31,573
$
97,483
$
111,862
$
267,745
Acquisition revenue adjustments(1)
24
1,794
670
3,064
Interchange and network fees(2)
(63,263
)
(173,777
)
Adjusted Net Revenue
$
31,597
$
36,014
$
112,532
$
97,032
____________________
1.
Under GAAP, companies must adjust, as
necessary, beginning balances of acquired deferred revenue to fair
value as part of acquisition accounting as defined by GAAP.
Acquisition revenue adjustments remove the effect of these
adjustments to acquisition date fair value from acquisitions that
have closed as of the date of this earnings release.
2.
Effective October 1, 2019, our revenues
are presented net of interchange and network fees in accordance
with Accounting Standards Codification Topic 606, Revenue from
Contracts with Customers.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200810005751/en/
Clay Whitson Chief Financial Officer (615) 988-9890
cwhitson@i3verticals.com
i3 Verticals (NASDAQ:IIIV)
Historical Stock Chart
From Mar 2024 to Apr 2024
i3 Verticals (NASDAQ:IIIV)
Historical Stock Chart
From Apr 2023 to Apr 2024