REPAY Reports Third Quarter 2019 Financial Results and Increases Outlook for Full Year 2019

ATLANTA–(BUSINESS WIRE)–Nov. 14, 2019– Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today reported financial results for its third quarter and nine months ended September 30, 2019.

“We are proud of our third quarter results, which included positive contributions from our TriSource acquisition, resulting in year-over-year growth in card payment volume and gross profit of 40% and 39%, respectively,” said John Morris, CEO of REPAY. “We are also thrilled to have recently entered the B2B payments space with the previously-announced acquisition of APS Payments.”

Three Months Ended September 30, 2019 Highlights

  • Card payment volume was $2.6 billion, an increase of 40% over the third quarter of 2018
  • Total revenue on a combined basis1 was $41.1 million, an increase of 27% over the third quarter of 2018
  • Gross profit was $19.4 million, an increase of 39% over the third quarter of 2018
  • Pro forma net loss1 was ($41.4) million, as compared to net income of $3.7 million in the third quarter 2018
  • Adjusted EBITDA was $11.9 million, an increase of 29% over the third quarter of 2018
  • Adjusted Net Income was $10.4 million, an increase of 49% over the third quarter of 2018
  • Adjusted Net Income per share was $0.18

Nine Months Ended September 30, 2019 Highlights

  • Card payment volume was $7.3 billion, an increase of 33% over the first three quarters of 2018
  • Total revenue on a combined basis was $116.5 million, an increase of 21% over the first three quarters of 2018
  • Gross profit was $54.4 million, an increase of 34% over the first three quarters of 2018
  • Pro forma net loss was ($32.4) million, as compared to net income of $8.4 million over the first three quarters of 2018
  • Adjusted EBITDA was $33.7 million, an increase of 24% over the first three quarters of 2018
  • Adjusted Net Income was $27.1 million, an increase of 31% over the first three quarters of 2018
  • Adjusted Net Income per share was $0.47

Gross profit represents total revenue less interchange and network fees and other costs of services. Adjusted EBITDA is a non-GAAP financial measure that represents net income (loss) adjusted for interest expense, tax expense, depreciation and amortization and certain other non-cash charges and non-recurring items. Adjusted Net Income is a non-GAAP financial measure that represents net income (loss) adjusted for amortization of acquisition-related intangibles and certain other non-cash charges and non-recurring items. Adjusted Net Income per share is a non-GAAP financial measure that represents Adjusted Net Income divided by the number of shares of Class A common stock outstanding (on as-converted basis) on September 30, 2019 (excluding certain shares that were subject to forfeiture on September 30, 2019). See “Non-GAAP Financial Measures” and the reconciliations of Adjusted EBITDA and Adjusted Net Income to their most comparable GAAP measure provided below for additional information.

____________________________

1 Please refer to “Basis of Presentation” below for an explanation of the presentation of this information.

Business Combination

The Company was formed upon closing of the merger (the “Business Combination”) of Hawk Parent Holdings LLC (together with Repay Holdings, LLC and its other subsidiaries, “Hawk Parent”) with a subsidiary of Thunder Bridge Acquisition, Ltd, (“Thunder Bridge”), a special purpose acquisition company, on July 11, 2019 (the “Closing Date”). On the Closing Date, Thunder Bridge changed its name to Repay Holdings Corporation.

Basis of Presentation

As a result of the Business Combination, the Company was identified as the acquirer for accounting purposes, and Hawk Parent, which owned the business conducted prior to the closing of the Business Combination, is the acquiree and accounting “Predecessor.” The Company is the “Successor” for periods after the Closing Date, which includes consolidation of the Hawk Parent business subsequent to the Closing Date. The Company’s financial statement presentation reflects the Hawk Parent business as the “Predecessor” for periods through the Closing Date. Where we discuss results for any period ended September 30, 2019, we are referring to the combined results of the Predecessor for the periods from either January 1, 2019 or July 1, 2019 through July 10, 2019 and the Successor for the period from the Closing Date through September 30, 2019. The combined basis of presentation reflects a simple arithmetic combination of the Predecessor and Successor periods. The acquisition was accounted for as a business combination using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of net assets acquired. As a result of the application of the acquisition method of accounting as of the effective time of the Business Combination, the financial statements for the Predecessor period and for the Successor period are presented on different bases. When information is noted as being “pro forma” in this press release, it means that the financial statements were adjusted to remove the effects of purchase accounting adjustments related to the Business Combination. The historical financial information of Thunder Bridge prior to the Business Combination has not been reflected in the Predecessor period financial statements.

Subsequent Events

On October 1, 2019, as required under the terms of the Business Combination, REPAY issued 3,750,000 additional Class A units in Hawk Parent as a result of the volume-weighted average trading price of REPAY’s Class A common stock exceeding $12.50 for twenty out of thirty consecutive trading days during the first twelve months following the closing of the Business Combination. Beginning on the six-month anniversary of the Business Combination, these Class A units in Hawk Parent may be exchanged for REPAY’s Class A common stock on a one-for-one basis. Also, as a result of the achievement of similar share price triggers, 1,482,500 shares of REPAY’s Class A common stock held by Thunder Bridge Acquisition, LLC were released from escrow on October 2, 2019 and are no longer subject to forfeiture.

On October 1, 2019, in connection with the post-closing adjustment mechanism for the Business Combination, 39,674 Class A units in Hawk Parent, the parent of the Predecessor, were cancelled and 20,326 Class A units in Hawk Parent were released from escrow and are no longer subject to forfeiture.

On October 1, 2019, the Company entered into a swap transaction with Regions Bank. On a quarterly basis, commencing on December 31, 2019 up to and including the termination date of July 11, 2024, the Company will make fixed payments on a beginning notional amount of $140,000,000. On a quarterly basis, commencing on December 31, 2019 up to and including the termination date of July 11, 2024, the counterparty will make floating rate payments based on the 3 month LIBOR on the beginning notional amount of $140,000,000.

On October 14, 2019, REPAY announced the acquisition of APS Payments for up to $60 million, which includes a $30 million performance-based earnout. The closing of the acquisition was financed with a combination of cash on hand and proceeds from borrowings under REPAY’s existing credit facility.

2019 Outlook

The addition of APS Payments is expected to contribute the following to the remainder of 2019:

  • $500 million in card payment volume
  • $3.5 million in total revenue
  • $2.8 million in gross profit
  • $1.5 million in Adjusted EBITDA

REPAY now expects the below financial results for full year 2019, which reflects expected contributions from APS Payments. The difference between the Previous Guidance and the Updated Guidance is solely related to the contributions from APS.

Full Year 2019 Outlook

Previous Guidance

Updated Guidance

Card Payment Volume

$9.6 – 9.75 billion

$10.1 – 10.25 billion

Total Revenue

$157.0 – 162.0 million

$160.5 – 165.5 million

Gross Profit

$74.0 – 76.0 million

$76.8 – 78.8 million

Adjusted EBITDA

$45.3 – 46.8 million

$46.8 – 48.3 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, and is continuing to evaluate the impact of that standard. In addition, REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures such as forecasted 2019 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.

Conference Call

REPAY will host a conference call to discuss third quarter 2019 financial results today at 5:00 pm ET. Hosting the call will be John Morris, CEO, and Tim Murphy, CFO. The conference call can be accessed live over the phone by dialing (877) 407-3982, or for international callers (201) 493-6780. A replay will be available one hour after the call and can be accessed by dialing 844-512-2921 or (412) 317-6671 for international callers; the conference ID is 13695820. The call will be webcast live from REPAY’s investor relations website and the replay will be available at https://investors.repay.com/investor-relations.

Non-GAAP Financial Measures

This communication includes certain non-GAAP financial measures that REPAY’s management uses to evaluate its operating business, measure its performance and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax 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. Adjusted Net Income is a non-GAAP financial 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 loss on extinguishment of debt, non-cash change in fair value of contingent consideration, transaction expenses, share-based compensation expense, management fees, legacy commission related charges, employee recruiting costs, loss on disposition of property and equipment, strategic initiative related costs and other non-recurring charges. Adjusted Net Income is adjusted to exclude 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. 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. Adjusted Net Income per share is a non-GAAP financial measure that represents Adjusted Net Income divided by the number of shares of Class A common stock outstanding (on as-converted basis) on September 30, 2019 (excluding certain shares that were subject to forfeiture on September 30, 2019). REPAY believes that Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per share provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per share are not financial measures 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. Using these non-GAAP financial measures to analyze REPAY’s business has 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 REPAY’s industry may report measures titled Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share 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, Adjusted Net Income and Adjusted Net Income per share alongside other financial performance measures, including net income and REPAY’s other financial results presented in accordance with GAAP. You should be aware of additional limitations with respect to Adjusted Net Income per share because the GAAP presentation of net loss per share is only reflected for the Successor period.

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, REPAY’s plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “guidance,” “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, REPAY’s estimated future results, APS’s contributions, and the updated full year 2019 outlook. Such forward-looking statements are based upon the current beliefs and expectations of REPAY’s 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 prior 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: a delay or failure to realize the expected benefits from the Thunder Bridge business combination; a delay or failure to integrate and realize the benefits of the TriSource acquisition and any difficulties associated with operating in the back-end processing markets in which REPAY does not have any experience; a delay or failure to integrate and realize the benefits of the APS Payments acquisition and any difficulties associated with marketing products and services in the B2B vertical market in which REPAY does not have any experience; 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 REPAY’s control. All information set forth herein speaks only as of the date hereof in the case of information about REPAY or the date of such information in the case of information from persons other than REPAY, and REPAY disclaims 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 it believes 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.

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.

Consolidated Statement of Operations

(Unaudited)

Successor

Predecessor

(in $ thousands)

July 11, 2019

through

September 30,

2019

July 1, 2019

through July 10,

2019

January 1, 2019

through July 10,

2019

Three Months

Ended

September 30,

2018

Nine Months

Ended

September 30,

2018

Revenue

Processing and service fees

$24,609

$2,431

$49,401

$20,317

$60,785

Interchange and network fees

12,546

1,476

29,989

11,975

35,370

Total Revenue

$37,156

$3,907

$79,390

$32,292

$96,155

Operating expenses

Interchange and network fees

$12,546

$1,476

$29,989

$11,975

$35,370

Other costs of services

7,051

565

12,574

6,332

20,302

Selling, general and administrative

21,003

34,069

51,201

6,104

21,009

Depreciation and amortization

10,703

333

6,223

2,666

7,580

Change in fair value of contingent
consideration

(1,000)

Total operating expenses

$51,302

$36,444

$99,987

$27,077

$83,261

Income (loss) from operations

($14,147)

($32,536)

($20,597)

$5,215

$12,894

Other expenses

Interest expenses

(2,686)

(227)

(3,145)

(1,488)

(4,501)

Change in fair value of tax receivable liability

(451)

Other income (expenses)

(1,316)

(1)

Total other income (expenses)

(4,453)

(227)

(3,145)

(1,488)

(4,502)

Income (loss) before income tax
expense

(18,599)

(32,763)

(23,743)

3,727

8,392

Income tax benefit (expense)

2,719

Net income (loss)

($15,880)

($32,763)

($23,743)

$3,727

$8,392

Net income (loss) attributable to
non-controlling interest

(7,399)

Net income (loss) attributable to the
Company

($8,481)

($32,763)

($23,743)

$3,727

$8,392

Weighted-average shares of Class
A common stock outstanding –
basic and diluted

34,326,127

Net income (loss) per Class A share
– basic and diluted

($0.25)

Consolidated Balance Sheets

Successor

Predecessor

(in $ thousands)

September 30, 2019

(Unaudited)

December 31, 2018

Assets

Cash and cash equivalents

$45,494

$13,285

Accounts receivable

12,636

5,979

Prepaid expenses and other

4,076

817

Total current assets

$62,206

$20,082

Property, plant and equipment, net

$1,485

$1,247

Restricted cash

11,556

9,977

Customer relationships, net of amortization

234,444

62,529

Software, net of amortization

65,523

5,171

Intangible assets, net of accumulated amortization

23,677

523

Goodwill

369,928

119,529

Total noncurrent assets

$706,613

$198,976

Total assets

$768,818

$219,058

Liabilities

Accounts payable

$8,742

$2,909

Accrued expenses

18,638

12,838

Current maturities of long-term debt

5,250

4,900

Current tax receivable agreement

2,232

Total current liabilities

$34,862

$20,647

Long-term debt, net of current maturities

$198,908

$85,815

Line of credit

3,500

Tax receivable agreement

64,106

Deferred tax liability

2,858

Oher liabilities

17

17

Total noncurrent liabilities

$265,889

$89,332

Total liabilities

$300,751

$109,979

Equity

Class A common stock, $0.0001 par value; 2,000,000,000 shares
authorized and 35,488,060 issued and outstanding as of September 30,
2019

4

Class V common stock, $0.0001 par value; 1,000 shares authorized and
100 shares issued and outstanding as of September 30, 2019

Additional paid-in capital

300,343

Accumulated deficit

(46,138)

Total stockholders’ equity

$254,209

$109,078

Total Noncontrolling interests

$213,858

$0

Total liabilities and equity

$768,818

$219,058

 

Key Operating and Non-GAAP Financial Data

We believe that adjusting the key operating and non-GAAP measures for comparability between the Predecessor, Successor and Pro Forma periods is useful to the user of our financial statements.

The unaudited non-GAAP pro forma results of operations data for the three and nine month periods ended September 30, 2019 included in the discussion below are based on our historical financial statements, adjusted to remove the effects of purchase accounting adjustments related to the Business Combination. The pro forma results included herein have not been prepared in accordance with Article 11 of Regulation S-X.

Unless otherwise stated, all results compare pro forma third quarter and nine-month 2019 results to third quarter and nine-month 2018 results from continuing operations for the period ended September 30, respectively.

The following tables and related notes reconcile these Non-GAAP measures and the Pro Forma Measures to GAAP information for the three and nine month periods ended September 30, 2019 and 2018:

Three months ended September 30,

Nine months ended September 30,

(in $ thousands)

2019

2018

%

Change

2019

2018

%

Change

Card payment volume

$2,618,561

$1,874,247

40%

$7,274,579

$5,463,627

33%

Gross profit1

$19,425

$13,985

39%

$54,386

$40,483

34%

Adjusted EBITDA2

$11,910

$9,201

29%

$33,695

$27,087

24%

(1) Gross profit represents total revenue less interchange and network fees and other costs of services.

(2) 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” above and the reconciliation of Adjusted EBITDA to its most comparable GAAP measure below.

Reconciliations of GAAP Net Income to Non-GAAP Adjusted EBITDA

For the three months ended September 30, 2019 and 2018

(Unaudited)

Successor

Predecessor

Predecessor

(in $ thousands)

July 11, 2019

through

September 30,

2019

July 1, 2019

through

July 10, 2019

Combined

Adjustments(o)

Pro Forma

Three months

ended

September 30,

2019

Three months

ended

September 30,

2018

Revenue

Processing and service fees

$24,609

$2,431

$27,041

$27,041

$20,317

Interchange and network fees

12,546

1,476

14,022

14,022

11,975

Total Revenue

$37,156

$3,907

$41,063

$41,063

$32,292

Operating expenses

Interchange and network fees

$12,546

$1,476

$14,022

$14,022

$11,975

Other costs of services

7,051

565

7,616

7,616

6,332

Selling, general and administrative

21,003

34,069

55,072

55,072

6,104

Depreciation and amortization

10,703

333

11,036

(7,253)

3,783

2,666

Change in fair value of contingent
consideration

Total operating expenses

$51,302

$36,444

$87,746

$80,493

$27,077

Income (loss) from operations

($14,147)

($32,536)

($46,683)

($39,430)

$5,215

Other expenses

Interest expenses

(2,686)

(227)

(2,913)

(2,913)

(1,488)

Change in fair value of tax receivable liability

(451)

(451)

(451)

Other income (expenses)

(1,316)

(1,316)

(1,316)

Total other income (expenses)

(4,453)

(227)

(4,679)

(4,679)

(1,488)

Income (loss) before income tax
expense

(18,599)

(32,763)

(51,362)

(44,109)

3,727

Income tax benefit (expense)

2,719

2,719

2,719

Net income (loss)

($15,880)

($32,763)

($48,643)

($41,390)

$3,727

Add:

Interest expense

2,913

1,488

Depreciation and amortization(a)

3,783

2,666

Income tax (benefit)

(2,719)

EBITDA

($37,414)

$7,881

Loss on extinguishment of debt (b)

1,316

Non-cash change in fair value of
contingent consideration(c)

Non-cash change in fair value of
tax receivable liability(d)

451

Share-based compensation
expense(e)

10,409

199

Transaction expenses(f)

35,017

995

Management Fees(g)

11

100

Legacy commission related
charges(h)

1,877

Employee recruiting costs(i)

18

Loss on disposition of property and
equipment

Other taxes(j)

32

7

Strategic initiative costs(k)

80

7

Other non-recurring charges(l)

114

12

Adjusted EBITDA

$11,910

$9,201

Reconciliations of GAAP Net Income to Non-GAAP Adjusted EBITDA

For the nine months ended September 30, 2019 and 2018

(Unaudited)

Successor

Predecessor

Predecessor

(in $ thousands)

July 11, 2019

through

September 30,

2019

January 1, 2019

through

July 10, 2019

Combined

Adjustments(o)

Pro Forma

Nine months

ended

September 30,

2019

Nine months

ended

September 30,

2018

Revenue

Processing and service fees

$24,609

$49,401

$74,010

$74,010

$60,785

Interchange and network fees

12,546

29,989

42,535

42,535

35,370

Total Revenue

$37,156

$79,390

$116,546

$116,546

$96,155

Operating expenses

Interchange and network fees

$12,546

$29,989

$42,535

$42,535

$35,370

Other costs of services

7,051

12,574

19,625

19,625

20,302

Selling, general and administrative

21,003

51,201

72,204

72,204

21,009

Depreciation and amortization

10,703

6,223

16,926

(7,253)

9,673

7,580

Change in fair value of
contingent consideration

(1,000)

Total operating expenses

$51,302

$99,987

$151,290

$144,036

$83,261

Income (loss) from operations

($14,147)

($20,597)

($34,744)

($27,491)

$12,894

Other expenses

Interest expenses

(2,686)

(3,145)

(5,831)

(5,831)

(4,501)

Change in fair value of tax receivable liability

(451)

(451)

(451)

Other income (expenses)

(1,316)

(1,316)

(1,316)

(1)

Total other income (expenses)

(4,453)

(3,145)

(7,598)

(7,598)

(4,502)

Income (loss) before income
tax expense

(18,599)

(23,743)

(42,342)

(35,089)

8,392

Income tax benefit (expense)

2,719

2,719

2,719

Net income (loss)

($15,880)

($23,743)

($39,623)

($32,369)

$8,392

Add:

Interest expense

5,831

4,501

Depreciation and amortization(a)

9,673

7,580

Income tax (benefit)

(2,719)

0

EBITDA

($19,585)

$20,473

Loss on extinguishment of debt
(b)

1,316

1

Non-cash change in fair value of
contingent consideration(c)

(1,000)

Non-cash change in fair value of
tax receivable liability (d)

451

Share-based compensation
expense(e)

10,660

630

Transaction expenses(f)

37,513

2,155

Management Fees(g)

211

300

Legacy commission related
charges(h)

2,427

4,168

Employee recruiting costs(i)

33

146

Loss on disposition of property
and equipment

Other taxes(j)

259

201

Strategic initiative costs(k)

296

79

Other non-recurring charges(l)

114

(67)

Adjusted EBITDA

$33,695

$27,087

 

Reconciliations of GAAP Net Income to Non-GAAP Adjusted Net Income

For the three months ended September 30, 2019 and 2018

(Unaudited)

Successor

Predecessor

Predecessor

(in $ thousands)

July 11, 2019

through

September 30,

2019

July 1, 2019

through

July 10, 2019

Combined

Adjustments(o)

Pro Forma

three months

ended

September 30,

2019

Three months

ended

September 30,

2018

Revenue

Processing and service fees

$24,609

$2,431

$27,041

$27,041

$20,317

Interchange and network fees

12,546

1,476

14,022

14,022

11,975

Total Revenue

$37,156

$3,907

$41,063

$41,063

$32,292

Operating expenses

Interchange and network fees

$12,546

$1,476

$14,022

$14,022

$11,975

Other costs of services

7,051

565

7,616

7,616

6,332

Selling, general and
administrative

21,003

34,069

55,072

55,072

6,104

Depreciation and amortization

10,703

333

11,036

(7,253)

3,783

2,666

Change in fair value of
contingent consideration

Total operating expenses

$51,302

$36,444

$87,746

$80,493

$27,077

Income (loss) from operations

($14,147)

($32,536)

($46,683)

($39,430)

$5,215

Other expenses

Interest expenses

(2,686)

(227)

(2,913)

(2,913)

(1,488)

Change in fair value of tax receivable liability

(451)

(451)

(451)

Other income (expenses)

(1,316)

(1,316)

(1,316)

Total other income (expenses)

(4,453)

(227)

(4,679)

(4,679)

(1,488)

Income (loss) before income
tax expense

(18,599)

(32,763)

(51,362)

(44,109)

3,727

Income tax benefit (expense)

2,719

2,719

2,719

Net income (loss)

($15,880)

($32,763)

($48,643)

($41,390)

$3,727

Add:

Amortization of Acquisition-
Related Intangibles(m)

2,525

1,980

Loss on extinguishment of debt
(b)

1,316

Non-cash change in fair value of
contingent consideration(c)

Non-cash change in fair value of
tax receivable liability (d)

451

Share-based compensation
expense(e)

10,409

199

Transaction expenses(f)

35,017

995

Management Fees(g)

11

100

Legacy commission related
charges(h)

1,877

Employee recruiting costs(i)

18

Loss on disposition of property
and equipment

Strategic initiative costs(k)

80

7

Other non-recurring charges(l)

114

12

Adjusted Net Income

$10,428

$7,020

Shares of Class A common stock
outstanding (on an as-converted
basis)(n)

57,531,359

Adjusted Net income per share

$0.18

Reconciliations of GAAP Net Income to Non-GAAP Adjusted Net Income

For the nine months ended September 30, 2019 and 2018

(Unaudited)

Successor

Predecessor

Predecessor

(in $ thousands)

July 11, 2019

through

September 30,

2019

January 1, 2019

through

July 10, 2019

Combined

Adjustments(o)

Pro Forma

nine months

ended

September 30,

2019

Nine months

ended

September 30,

2018

Revenue

Processing and service fees

$24,609

$49,401

$74,010

$74,010

$60,785

Interchange and network fees

12,546

29,989

42,535

42,535

35,370

Total Revenue

$37,156

$79,390

$116,546

$116,546

$96,155

Operating expenses

Interchange and network fees

$12,546

$29,989

$42,535

$42,535

$35,370

Other costs of services

7,051

12,574

19,625

19,625

20,302

Selling, general and administrative

21,003

51,201

72,204

72,204

21,009

Depreciation and amortization

10,703

6,223

16,926

(7,253)

9,673

7,580

Change in fair value of
contingent consideration

(1,000)

Total operating expenses

$51,302

$99,987

$151,290

$144,036

$83,261

Income (loss) from operations

($14,147)

($20,597)

($34,744)

($27,491)

$12,894

Other expenses

Interest expenses

(2,686)

(3,145)

(5,831)

(5,831)

(4,501)

Change in fair value of tax
receivable liability

(451)

(451)

(451)

Other income (expenses)

(1,316)

(1,316)

(1,316)

(1)

Total other income (expenses)

(4,453)

(3,145)

(7,598)

(7,598)

(4,502)

Income (loss) before income
tax expense

(18,599)

(23,743)

(42,342)

(35,089)

8,392

Income tax benefit (expense)

2,719

2,719

2,719

Net income (loss)

($15,880)

($23,743)

($39,623)

($32,369)

$8,392

Add:

Amortization of Acquisition-
Related Intangibles(m)

6,485

5,939

Loss on extinguishment of debt
(b)

1,316

1

Non-cash change in fair value of
contingent consideration(c)

(1,000)

Non-cash change in fair value of
tax receivable liability(d)

451

Share-based compensation
expense(e)

10,660

630

Transaction expenses(f)

37,513

2,155

Management Fees(g)

211

300

Legacy commission related charges(h)

2,427

4,168

Employee recruiting costs(i)

33

146

Loss on disposition of property
and equipment

Strategic initiative costs(k)

296

79

Other non-recurring charges(l)

114

(67)

Adjusted Net Income

$27,136

$20,743

Shares of Class A common stock outstanding (on an as-converted basis)(n)

57,531,359

Adjusted Net income per share

$0.47

(a) See footnote (m) for details on our amortization and depreciation expenses.

(b) Reflects write-offs of debt issuance costs relating to Hawk Parent’s term loans and prepayment penalties relating to its previous debt facilities.

(c) 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.

(d) Reflects the changes in management’s estimates of the fair value of the liability relating to the Tax Receivable Agreement

(e) Represents compensation expense associated with Hawk Parent’s equity compensation plans, totaling $908,977 in the Predecessor period from January 1, 2019 to July 10, 2019 inclusive of charges from accelerated vesting due to a change of control triggered by the Business Combination, and $9,750,821 as a result of new grants made in the Successor period.

(f) Primarily consists of (i) during the three and nine months ended September 30, 2019, professional service fees and other costs in connection with the Business Combination, the acquisition of TriSource Solutions, and the subsequently announced acquisition of APS Payments, and (ii) during the three and nine months ended September 30, 2018, additional transaction related expenses in connection with the acquisitions of PaidSuite, Inc. and PaidMD, LLC (together, “PaidSuite”) and Paymaxx Pro, LLC (“Paymaxx”), which transactions closed in 2017.

(g) Reflects management fees paid to Corsair Investments, L.P. pursuant to the management agreement, which terminated upon the completion of the Business Combination.

(h) Represents payments made to certain employees in connection with significant restructuring of their commission structures. These payments represented commission structure changes which are not in the ordinary course of business.

(i) 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.

(j) Reflects franchise taxes and other non-income based taxes.

(k) Consulting fees relating to REPAY’s processing services and other operational improvements that were not in the ordinary course, in the aggregate amount of $124,000, and $55,000 as well as 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 nine months ended September 30, 2019 and 2018, respectively. 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 are reflected in the nine months ended September 30, 2019.

(l) For the nine months ended September 30, 2018 reflects reversal of adjustments over the prior and current periods made for legal expenses incurred related to a dispute with a former customer, for which we were reimbursed in the current period as a result of its settlement. For the three months ended September 30, 2018 and the nine months ended September 30, 2019, reflects expenses incurred related to other one-time legal and compliance matters. Additionally, for the three months ended September 30, 2019 reflects a one-time credit issued to a customer which was not in the ordinary course of business.

(m) For the three and nine months ended September 30, 2018, reflects amortization of 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. For the three and nine months ended September 30, 2019 reflects amortization of the customer relationships intangibles described previously, as well as customer relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and customer relationships, non compete agreement, and software intangibles acquired through Repay Holdings, LLC’s acquisition of TriSource Solutions, LLC. 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. See additional information below for an analysis of our amortization expenses:

Three months ended

September 30,

Nine months ended

September 30,

(in $ thousands)

2019

2018

2019

2018

Acquisition-related intangibles

$2,525

$1,980

$6,485

$5,939

Software

1,064

563

2,698

1,327

Reseller buyouts

15

15

44

43

Amortization

$3,604

$2,557

$9,226

$7,310

Depreciation

179

109

446

271

Total Depreciation and amortization1

$3,783

$2,666

$9,673

$7,580

  1. Adjusted Net Income is adjusted to exclude 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 presented above). Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although REPAY excludes 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. Any future acquisitions may result in the amortization of additional intangibles.

(n) Represents the total number of outstanding shares of Class A common stock on September 30, 2019 and not otherwise subject to vesting or forfeiture restrictions on such date, together with the total number of outstanding shares of Class A common issuable upon exchange of the total number of outstanding Class A units in Hawk Parent on September 30, 2019 (without regard to the restriction on exchanges prior to the six-month anniversary of the Business Combination). This amount does not take into the issuances, releases and cancellations of shares and units described in “Subsequent Events” above.

(o) Adjustment for incremental depreciation and amortization recorded due to fair-value adjustments under ASC 805 in the Successor Period.

Source: Repay Holdings Corporation

Investor Relations Contact for REPAY:
repayIR@icrinc.com

Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com

ACG Atlanta Announces the 2019 Deals and Dealmakers of the Year

ATLANTA – Oct. 17, 2019 – The Atlanta Chapter of The Association for Corporate Growth® (ACG), a global professional organization with the mission of Driving Middle-Market Growth®, recognizes the companies below as this year’s honorees. A celebration and the presentation of the awards will be held on November 21st.

“All of the awards selected this year exemplify ACG Atlanta’s focus on growth and demonstrate the strength and significance of Atlanta-based companies and investors,” said Melanie Brandt, President and CEO of ACG Atlanta. “Our winners achieved the highest performance and deal execution standards, representing the best of the highly qualified nominees this year.”

The ACG Atlanta Deals of the Year committee panel consists of a wide variety of ACG Member executives that comprise the local deals community. Nominations were considered based on the following criteria: economic development impact, complexity, involvement of strategic Atlanta business sectors, products or services with potential for significant local and global impact, and involvement of Atlanta investors, executives, and serial entrepreneurs.

ACG Atlanta will present awards to winners on November 21st at the Atlanta History Center. Herschel Walker, the University of Georgia football legend and successful businessman is the featured Keynote Speaker.

2019 Deal Honorees include:

  • Mega/Large Cap – SunTrust & BB&T Merger
  • Middle-Market – Argenbright Holdings & Delta Global Services
  • REIT – Cortland
  • Innovative Financing – REPAY Realtime Electronic Payments
  • Venture Deal – Salesloft
  • Dealmaker of the Year – Jim Childs, Managing Partner & CEO at Bowstring Advisors, a division of Citizens Capital Markets
  • Legend Award – Cam Lanier, Chairman & CEO of ITC Holding Company, LLC and ITC Capital Partners, LLC

About ACG Atlanta

The Association for Corporate Growth (ACG) comprises more than 14,500 members from corporations, private equity, finance, and professional service firms representing Fortune 500, Fortune1000, FTSE 100, and mid-market companies in 59 chapters in North America and Europe. Founded in 1974, ACG Atlanta is one of the oldest and most active chapters, providing the area’s executives and professionals a unique forum for exchanging ideas and experiences concerning organic and acquisitive growth. Programs include Atlanta ACG Capital Connection, The Georgia Fast 40 Honoree Awards and Gala, a Wine Tasting Reception, a Deal of the Year event as well as an active Women’s Forum and Young Professionals group. For more information, visit: acgatlanta.org or connect with ACG Atlanta via Facebook, LinkedIn and Twitter.

REPAY Announces the Acquisition of APS Payments

ATLANTA–(BUSINESS WIRE)–Oct. 14, 2019–Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced the acquisition of APS Payments (“APS”) for $60 million, of which $30 million was paid at closing. The remaining $30 million may become payable upon the achievement of performance growth targets. The closing of the acquisition was financed with a combination of cash on hand and proceeds from borrowings under REPAY’s existing credit facility.

APS, founded in 2008 and headquartered in Mesa, AZ, is an integrated payments provider focused on the B2B vertical. APS goes to market in the B2B vertical through key integrations with leading ERP platforms.

“APS fits our M&A strategy of acquiring high growth businesses with attractive margins, a strong existing distribution model, and technology enhancement opportunities – operating in large, fast growing addressable markets. In addition, APS provides us with end market diversification and organic growth opportunities, which we believe will help drive shareholder value,” said John Morris, CEO of REPAY. “We are thrilled to welcome the APS team into the REPAY family and look forward to working together to grow B2B electronic payments, as businesses continue to implement new payment technology.”

“Our mission has been to create highly robust, yet easy to use, payment solutions for our clients. We believe joining the REPAY team will enable us to advance that mission and capitalize on the on-going growth in B2B electronic payments, as businesses continue to implement new payment technology and move away from issuing and accepting paper checks,” said David Ford, CEO of APS.

Transaction Details

  • REPAY acquired APS for $60 million
    • $30 million was paid at closing
    • Up to $30 million may be payable through performance based earn outs, based on APS’ performance for the 12-month periods ending December 2019, June 2020, and December 2020
  • APS’ estimated full year 2019 metrics
    • Payment Card Volume – approximately $2 billion
    • Gross Profit – approximately $11 million
    • Adjusted EBITDA – approximately $6.5 million (includes $0.5 million of pro forma transaction processing cost synergies)
  • The closing of the acquisition was financed with a combination of cash on hand and borrowings under REPAY’s existing credit facility
  • Combined net leverage is expected to approximate 3.5x on a post-transaction basis1

Strategic Rationale

  • Organic Growth Opportunities
    • New vertical expansion and diversification into the +trillion dollar B2B market
    • APS is capitalizing on the on-going growth in B2B electronic payments, as businesses continue to move away from issuing and accepting paper checks
    • Large merchants, high volumes, large average ticket sizes, and low attrition rates characterize the B2B space, relative to most payment end markets
  • Opportunity to Leverage REPAY’s Technology Capabilities
    • APS’ technology infrastructure closely resembles that of businesses REPAY has acquired in the past; we understand how to successfully integrate and enhance these types of assets
    • Migration to REPAY’s technology platform and acceleration of ERP software integrations expected to result in substantial end market expansion
  • Shareholder Value Creation
    • The acquisition is immediately accretive to earnings

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 REPAY, as well as the APS estimated full year performance metrics. 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 prior reports filed with the U.S. Securities and Exchange Commission 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: a delay or failure to integrate and realize the benefits of the APS acquisition and any difficulties associated with marketing products and services in the B2B vertical market in which REPAY does not have any experience; a delay or failure to integrate and realize the benefits of the TriSource acquisition and any difficulties associated with marketing products and services in the back-end processing market in which REPAY does not have prior experience; 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; the 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 REPAY or the date of such information in the case of information from persons other than 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, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

About REPAY

REPAY provides integrated payment processing solutions to verticals that have specific transaction processing and technology needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity and enhances the experience of electronic payments.

_______________________
1 Calculated based on the estimated twelve months ending December 31, 2019 pro forma Adjusted EBITDA of REPAY, TriSource, and APS on a combined basis, after giving effect to new borrowings under the existing credit facility and assuming that all cash and cash equivalents, on a combined basis, offset REPAY’s post-transaction indebtedness.

View source version on businesswire.com:
https://www.businesswire.com/news/home/20191014005579/en/

Source: Repay Holdings Corporation

Contacts

Investor Relations Contact for REPAY:
repayIR@icrinc.com

Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com

Credit Unions & Fintech Firms: A Great Partnership Opportunity

Credit Unions and Fintech Firms Partner Up
Is Your Credit Union Keeping Up with Modern Technology?

Seventy-nine percent of credit union members would leave their credit union for a financial technology (fintech) firm for convenience and easy access to services.

If you are a credit union, this figure should scare you. But don’t jump to any hasty conclusions just yet — you don’t have to invest a billion dollars in new technology. You can compete with larger financial institutions even if you don’t have the same access to funds.

You do have options. At REPAY, we empower credit unions to enhance the member experience. Our real-time payment technology solutions enable credit unions to provide faster, more streamlined digital service offerings.

Buy, Build, or Partner

Why build something brand new when you can partner or buy?

Banks and credit unions have been dealing with the rise of fintech by choosing one of three options: buy, build, or partner. A few large institutions have purchased smaller fintech disruptors and made them their own. For instance, SunTrust bought FirstAgain and rebranded it as SunTrust’s online lending arm, Lightstream.  Other banks have chosen to build their technology, as evidenced when Goldman Sachs introduced Marcus, its online banking service.

While buying or building new technology can work for large financial institutions, smaller establishments have chosen another route – partnership. Many credit unions are in a place where partnering with a fintech firm makes the most sense, regardless of how much capital they’re willing to spend on new technology.

This Forbes piece describes how most credit unions spend a similar percentage of assets (0.42%) on new technology, as compared to a group of nine mega- and regional banks. Credit unions only spend 12% less than the megabanks do, the difference due to their smaller size. However, credit unions can use that smaller size to their advantage by remaining agile and adaptable to ever-changing consumer demands.

As this PYMNTS.com article states, fintech firms “aren’t an adversarial force in the market for credit unions. Rather they are potential partners for filling the gaps in service offerings.” And we couldn’t agree more. Each side brings something valuable to the table.

  • Credit unions foster a much higher level of trust among their members when compared to banks and their customers. Credit unions also boast a much higher satisfaction rate than do most other financial institutions.
  • Fintech firms bring new technology and innovation, allowing members to make payments faster, apply for loans online, and transact business around the clock.

When the two partner up, your credit union runs in a more modern, efficient, and agile manner thanks to the introduction of new technology.

Fintech Helps Answer Your Most Common Questions

A partnership with a fintech business means you can use the most advanced technology to streamline service offerings. You can give your members better answers to their most common questions:

  • Can I apply for a mortgage with my credit union?
    • Why, of course, you can! And now, you can apply online, seamlessly submit documentation, and manage your loan payments on our mobile app.
  • Can I use my credit union for business?
    • Definitely! Not only can you open a business account, but you can also process customer payments. You can also text us for service and access your account 24/7.
Credit Unions and Fintech Firms Are Better Together

Well-run credit unions do not threaten fintech firms. They don’t want to be credit unions, and they rarely seek banking licenses. However, because fintech firms often specialize in a few specific services, it makes sense they would want to fill those solution gaps. Credit unions, on the other hand, are always looking for ways to provide better technology to their members. Therefore, a partnership between a fintech firm and a credit union is an ideal scenario, thereby providing all members with both cutting-edge technology and premier customer service.

In future articles, we are going to examine issues like technological trends for credit unions and how staying small and agile is an advantage in a market of banking giants. If you are curious about how the most advanced payment technologies can help your credit union grow, contact us to request a demo.

REPAY Joins the Symitar Vendor Integration Program

ATLANTA–(BUSINESS WIRE)–Sept. 10, 2019–Repay Holdings Corporation, (NASDAQ: RPAY) (“REPAY”) a leading provider of vertically-integrated payment solutions, today announced that it has joined the Symitar® Vendor Integration Program (VIP). Participation in the program will provide REPAY with access to Symitar’s technical resources to enable REPAY’s proprietary payment platform to integrate with Symitar’s Episys® platform. The Vendor Integration Program is designed to help ensure that Symitar’s customers can easily deploy third-party products.

REPAY’s payment platform integrates with Episys via SymXchange™, a services-based programming interface that enables third-party vendors and credit unions to access the platform’s core data and business rules. The integrity of data is maintained throughout any data exchange, because access to business rules and data is managed through a service layer which governs these interactions.

REPAY’s payment technology aims to help credit unions reduce the complexity of electronic payments, increase member satisfaction, and enhance the member experience by offering convenient and secure payment options. The REPAY platform provides access to credit/debit card processing, Instant Funding, ACH processing, IVR/phone pay, text pay, electronic bill payment and presentment (EBPP) systems, and white-labeled member-facing payment portals, including web portals and mobile apps. REPAY’s inclusion in the VIP will make it easier for Symitar’s customers to use these advanced payment technology solutions to seamlessly accept payments and automatically update member payment data.

“Competition for new customers is fierce in the world of lending,” said Susan Perlmutter, Chief Revenue Officer of REPAY. “Having a multitude of friendly, self-service payment options for members, as well as state of the art collection tools that are integrated to their core platform, can be a game changer for a credit union. REPAY’s technology integration to the Episys platform can be a quick resolution to close this gap for our credit union clients.”

Symitar’s VIP takes the customer out of the middle, providing vendors with direct access to Symitar’s technical resources and test systems. VIP inclusion is not an endorsement of the vendor’s product.

About Symitar

Symitar®, a division of Jack Henry & Associates, Inc. (NASDAQ:JKHY), is a provider of integrated computer systems for credit unions of all sizes. Symitar has been selected as the primary technology partner by more than 800 credit unions, serving as a single source for integrated, enterprise-wide automation and as a single point of contact and support. Additional information about Symitar is available at www.symitar.com.

About Jack Henry & Associates, Inc.

Jack Henry & Associates, Inc.® (NASDAQ: JKHY) is a leading provider of technology solutions and payment processing services primarily for the financial services industry. Its solutions serve more than 9,000 customers nationwide, and are marketed and supported through three primary brands. Jack Henry Banking® supports banks ranging from community banks to multi-billion-dollar institutions with information processing solutions. Symitar® is a leading provider of information processing solutions for credit unions of all sizes. ProfitStars® provides highly specialized products and services that enable financial institutions of every asset size and charter, and diverse corporate entities to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. Additional information is available at www.jackhenry.com.

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.

Source: Repay Holdings Corporation

Investor Relations Contact for REPAY:
repayIR@icrinc.com 

Media Relations Contact for REPAY:
Kristen Hoyman
khoyman@repay.com

REPAY Announces Appointment of General Counsel

ATLANTA–(BUSINESS WIRE)–Sept. 3, 2019–Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced that it has appointed Tyler B. Dempsey as REPAY’s General Counsel.

Mr. Dempsey has provided legal counsel and support to REPAY for more than 9 years as outside counsel at Troutman Sanders LLP, where he has served as a Partner since 2008. He has extensive experience in mergers and acquisitions, joint ventures and strategic alliances, and corporate governance and securities matters.

“We are very pleased to have Tyler join our team. He has served as a trusted advisor for many years and has been instrumental in our numerous acquisitions as well as the recent transaction with Thunderbridge,” said John Morris, CEO of REPAY. “Tyler has more than 20 years of experience representing both public and private companies in the fintech, business services and software industries. His experience, both with REPAY and the industry, will be very valuable to us.”

Prior to joining Troutman Sanders, Mr. Dempsey was an attorney at King & Spalding LLP. He currently serves on the Board of Directors for TAG FinTech.

He received a J.D. from the University of North Carolina School of Law, where he was a member of the North Carolina Law Review and the Order of the Coif, and a B.S. in accounting, magna cum laude, from the University of Tennessee. He is a member of the State Bar of Georgia.

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 lenders, while enhancing the overall experience for consumers.

View source version on businesswire.com:
https://www.businesswire.com/news/home/20190903005740/en/

Source: Repay Holdings Corporation

Contacts

Investor Relations Contact for REPAY:
repayIR@icrinc.com 

Media Relations Contact for REPAY:
Kristen Hoyman
khoyman@repay.com

REPAY Reports Second Quarter 2019 Financial Results and Increases Outlook for Full Year 2019

ATLANTA–(BUSINESS WIRE)–Aug. 14, 2019– Repay Holdings Corporation (NASDAQ:RPAY), a leading provider of vertically-integrated payment solutions, today reported financial results for its second quarter of 2019.

“We are pleased with our results in the second quarter, which included year-over-year organic growth in card payment volume and gross profit of 27% and 33%, respectively.In addition, we expanded our integrated payment processing services into Canada, which was a strategic next step for the Company,” said John Morris, CEO of REPAY. “We have an excellent opportunity to modernize the large, fast growing and underserved verticals we currently address by delivering high quality payment technology.”

“We are thrilled to have completed our business combination with Thunder Bridge last month and secured a new credit facility, which provides us liquidity for growth, including future market expansions as well as strategic M&A, including the acquisition of TriSource Solutions, which we announced today,” continued Morris. “In addition, we are excited to work with our new Board and benefit from their deep experience in the payments space. We look forward to their guidance and support as we position our business for continued growth.”

Three Months Ended June 30, 2019 Highlights

  • Card payment volume was $2.2 billion, an increase of 27% over the second quarter of 2018
  • Total revenue was $36.2 million, an increase of 17% over the second quarter of 2018
  • Gross profit was $17.1 million, an increase of 33% over the second quarter of 2018
  • Net income was $4.2 million, a decrease of 7% over the second quarter of 2018
  • Adjusted EBITDA was $10.4 million, an increase of 24% over the second quarter of 2018
  • Adjusted Net Income was $7.8 million, an increase of 23% over the second quarter of 2018

Six Months Ended June 30, 2019 Highlights

  • Card payment volume was $4.7 billion, an increase of 30% over the first half of 2018
  • Total revenue was $75.5 million, an increase of 18% over the first half of 2018
  • Gross profit was $35.0 million, an increase of 32% over the first half of 2018
  • Net income was $9.0 million, an increase of 93% over the first half of 2018
  • Adjusted EBITDA was $21.8 million, an increase of 22% over the first half of 2018
  • Adjusted Net Income was $16.7 million, an increase of 22% over the first half of 2018

The financial information for the three and six months ended June 30, 2019 and the three and six months ended June 30, 2018 included in this press release reflects, and is based upon, information of REPAY prior to giving effect to the business combination with Thunder Bridge Acquisition Ltd. completed on July 11, 2019 (as further discussed below).

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. Adjusted Net Income is a non-GAAP financial measure that represents net income adjusted for amortization of acquisition-related intangibles and certain other non-cash charges and non-recurring items. See “Non-GAAP Financial Measures” and the reconciliations of Adjusted EBITDA and Adjusted Net Income to their most comparable GAAP measure provided below. Gross profit represents total revenue less interchange and network fees as well as other costs of services.

Subsequent Events

On July 11, 2019, Repay Holdings, LLC, together with its parent, Hawk Parent Holdings, LLC (together, “Hawk Parent”), and Thunder Bridge Acquisition, Ltd. (“Thunder Bridge”), a special purpose acquisition company, announced that they completed their previously announced business combination under which Thunder Bridge acquired Hawk Parent for approximately $580.7 million in total consideration. Upon completion of the business combination, Thunder Bridge changed its name to Repay Holdings Corporation, and its Class A common stock began trading on the Nasdaq Stock Market under the ticker symbol “RPAY” on July 12, 2019.

On August 14, 2019 the Company announced the acquisition of TriSource Solutions for up to $65 million, which included a performance based earnout. The acquisition was financed with a combination of cash on hand and proceeds from borrowings under REPAY’s existing credit facility.

2019 Outlook

The addition of TriSource Solutions is expected to contribute between $8.0 million and $10.0 million in total revenue and between $2.25 million and $2.75 million in Adjusted EBITDA to the remainder of 2019.

REPAY now expects the following financial results for full year 2019, which reflects expected contributions from TriSource:

 Full Year 2019 Outlook
 Previous GuidanceUpdated Guidance
Card Payment Volume$9.2 billion$9.6 – 9.75 billion
Total Revenue$159.2 million$157.0 – 162.0 million
Gross Profit$71.6 million$74.0 – 76.0 million
Adjusted EBITDA$44.0 million$45.3 – 46.8 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. In addition, REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures such as forecasted 2019 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.

Conference Call

REPAY will host a conference call to discuss second quarter 2019 financial results today at 5:00 pm ET. Hosting the call will be John Morris, CEO, and Tim Murphy, CFO. The conference call can be accessed live over the phone by dialing (877) 407-3982, or for international callers (201) 493-6780. A replay will be available one hour after the call and can be accessed by dialing 844-512-2921 or (412) 317-6671 for international callers; the conference ID is 13692995. The call will be webcast live from REPAY’s investor relations website and the replay will be available at https://investors.repay.com/investor-relations.

Non-GAAP Financial Measures

This communication includes certain non-GAAP financial measures that REPAY’s management uses to evaluate its operating business, measure its performance and make strategic decisions. 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. Adjusted Net Income is a non-GAAP financial 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 loss on extinguishment of debt, non-cash change in fair value of contingent consideration, transaction expenses, share-based compensation expense, management fees, legacy commission related charges, employee recruiting costs, loss on disposition of property and equipment, strategic initiative related costs and other non-recurring charges. Adjusted Net Income is adjusted to exclude 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. 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. REPAY believes that Adjusted EBITDA and Adjusted Net Income provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, Adjusted EBITDA and Adjusted Net Income are not financial measures 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. Using these non-GAAP financial measures to analyze REPAY’s business has 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 REPAY’s industry may report measures titled Adjusted EBITDA, Adjusted Net Income 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 and Adjusted Net Income alongside other financial performance measures, including net income and REPAY’s 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 “guidance,” “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 REPAY and REPAY’s estimated future results, including the full year 2019 outlook. 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 prior 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: a delay or failure to realize the expected benefits from the business combination; a delay or failure to integrate and realize the benefits of the TriSource acquisition and any difficulties associated with operating in the back-end processing markets in which REPAY does not have any experience; 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 REPAY or the date of such information in the case of information from persons other than 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.

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 lenders, while enhancing the overall experience for consumers.

The financial updates included in this press release for the historical periods indicated below reflect, and are based upon, the information of REPAY prior to giving effect to the business combination with Thunder Bridge Acquisition Ltd.


View source version on businesswire.com: https://www.businesswire.com/news/home/20190814005701/en/

Source: Repay Holdings Corporation

Investor Relations Contact for REPAY: 
repayIR@icrinc.com

Media Relations Contact for REPAY: 
Kristen Hoyman 
khoyman@repay.com

REPAY Announces the Acquisition of TriSource Solutions

ATLANTA–(BUSINESS WIRE)–Aug. 14, 2019– Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”) (“the Company”), a leading provider of vertically-integrated payment solutions, today announced the acquisition of TriSource Solutions (“TriSource”), for up to $65 million, which includes a performance based earn out. The acquisition was financed with a combination of cash on hand and proceeds from borrowings under REPAY’s existing credit facility.

TriSource, founded in 2007, provides back-end transaction processing services to independent sales organizations (“ISO’s”) and operates as a direct ISO on behalf of its owned portfolios and external sales agents. TriSource is headquartered in Bettendorf, IA with an additional office in East Moline, IL. Since 2012, TriSource has been REPAY’s primary third-party processor for back-end settlement solutions and a valuable partner that has supported the Company’s growth.

“TriSource will enable us to build more intelligent payment solutions and bring these solutions to our customers faster. Additionally, we see the potential for strong organic growth in TriSource’s back-end settlement business, and our long partnership with TriSource has illustrated its inherent value proposition. We are looking forward to leveraging TriSource’s capabilities to drive continued growth. Further, the acquisition enhances our M&A strategy, as having our own back-end transaction processing capabilities will allow us to reduce future targets’ transaction processing costs and to expedite other synergy realization efforts. The TriSource acquisition will be immediately and meaningfully accretive to earnings,” said John Morris, CEO of REPAY.

“We are excited to join the REPAY team,” said Deborah Brown, COO of TriSource Solutions. “We have partnered with REPAY for many years and believe they will help us to accelerate our processing business growth. We look forward to working alongside the REPAY team to drive long term growth at the combined company.”

“TriSource owners Henry Harp and Bill Brockway, along with the company’s executive management team, have built a top-tier organization. I’ve had the pleasure of working alongside the TriSource team over the past seven years and believe adding them to the REPAY family will be beneficial to all parties. I would like to take this opportunity to welcome them to our organization,” said Shaler Alias, President of REPAY.

Transaction Details

  • REPAY acquired TriSource for up to $65 million
    • $60 million was paid at closing
    • Up to $5 million is structured as a performance based earn out
  • The acquisition was financed with a combination of cash on hand and borrowings under REPAY’s existing credit facility
  • Annualized Adjusted EBITDA is expected to be approximately $7.0 million
  • Combined net leverage expected to be approximately 3.5x on a post-transaction basis1

1 Calculated based on the estimated twelve months ended September 30, 2019 Adjusted EBITDA of REPAY and TriSource on a combines basis, after giving effect to new borrowings under the existing credit facility and assuming that all cash and cash equivalents, on a combined basis, offset REPAY’s post-transaction indebtedness.

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 REPAY and REPAY’s estimated future results, including the full year 2019 outlook. 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 prior 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: a delay or failure to realize the expected benefits from the business combination; a delay or failure to integrate and realize the benefits of the TriSource acquisition and any difficulties associated with operating in the back-end processing markets in which REPAY does not have any experience; 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 REPAY or the date of such information in the case of information from persons other than 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.

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 lenders, while enhancing the overall experience for consumers.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190814005646/en/

Source: Repay Holdings Corporation

Investor Relations for REPAY: 
repayIR@icrinc.com

Media Relations for REPAY: 
Kristen Hoyman 
khoyman@repay.com

REPAY Launches ‘Instant Funding’ in Canada

Visa Direct enables seamless real-time1 push payments for 24/7/365 access to funds

ATLANTA–(BUSINESS WIRE)–Aug. 13, 2019– Repay Holdings Corporation, (NASDAQ: RPAY) (“REPAY”) a leading provider of vertically-integrated payment solutions, announced today the launch of its Instant Funding product in Canada. Instant Funding is a new and innovative service that allows lenders to send funds directly to eligible Visa debit and prepaid cards via electronic transactions enabled by Visa Direct and made available through REPAY’s financial institution partner.

Instant Funding transactions are processed in real-time2 via Visa Direct, Visa’s real-time push payments platform, which reverses a normal transaction, “pushing” the funds to an eligible Visa debit or prepaid card. With REPAY Instant Funding, Canadian lenders and finance companies can disburse funds 24/7/365 and replace traditional checks and EFT transactions with real-time transactions, which means customers no longer have to wait days for funds to become available.

“After a successful launch in the U.S., we are extremely excited to bring our Instant Funding product to the Canadian market,” said Susan Perlmutter, Chief Revenue Officer of REPAY. “Our technology removes the friction and processing delays often associated with traditional fund disbursements and enables lenders to provide fast, convenient and secure funding experiences to their customers.”

“In partnership with REPAY, we’re eager to deliver a payment solution to help lenders run their businesses more efficiently,” said Brian Weiner, Vice President & Head of Product, Visa Canada. “We launched Visa Direct because we understand that easy, convenient and secure access to funds is critical to enabling growth for lenders.”

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 lenders, while enhancing the overall experience for consumers.

___________________ 
1 Actual fund availability depends on receiving financial institution and region. Visa requires fast-funds enabled issuers to make funds available to their recipient cardholders within a maximum of 30 minutes of approving the transaction. Please refer to the Visa Direct team and the Visa Direct Original Credit Transaction Global Implementation Guide for more information. 
2 See citation 1

View source version on businesswire.com: 
https://www.businesswire.com/news/home/20190813005087/en/

Source: Repay Holdings Corporation

For REPAY 
Investor Relations: 
repayIR@icrinc.com 

Media Relations: 
Kristen Hoyman 
(404) 637-1665 
khoyman@repay.com

REPAY and Visa Canada Announce Partnership to Expand Online Payment Acceptance in Canada

ATLANTA–(BUSINESS WIRE)–Aug. 13, 2019– Repay Holdings Corporation, (NASDAQ:RPAY) (“REPAY”) a leading provider of vertically-integrated payment solutions, and Visa Canada announced today a strategic partnership that will seek to expand debit card and online payment acceptance for the Canadian personal loans market.

The partnership aims to bring speed and convenience to the traditional debt repayment process by reducing the complexity of online payments and lowering the costs associated with debit card acceptance.

Together, the companies are making it easier for Canadian lenders and finance companies to accept debit cards as a form of repayment in a card-not-present environment. Visa has made debit card payments a viable alternative to cheques and ACH. Paying off debt with a Visa debit card has major advantages for both the consumer and for the lender – for consumers, debit card payments offer zero liability*, making them a safe and secure payment method. For lenders, it improves customer service by making the billing and payment experience easy. This is crucial, because the billing and payment experience is the most influential driver of customer satisfaction in lending1. REPAY’s payment technology gives consumers the flexibility to make their loan payments with a debit card and transforms the online payment process into an easy, convenient and pleasant experience.

“We believe this initiative with Visa will bring innovation and convenience to a previously underserved market,” said John Morris, CEO of REPAY. “Our omni-channel integrated payment platform removes the friction from the debt repayment process by giving merchants the ability to securely accept debit cards 24/7/365 in an automated setting.”

“We’re excited to partner with REPAY to offer merchants the opportunity to greatly improve customer service with an easy, safe, and fast payment solution,” said Brian Weiner, Vice President & Head of Product, Visa Canada. “Widening the acceptance of Visa Debit for debt repayment means more convenience for millions of Canadian Visa Debit cardholders, and efficiencies for lenders and merchants.”

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.

1 Source: AYTM 2017 Debt Repayment Survey, Quantitative research to understand consumer landscape and preference; Commissioned by Visa; Target: 400 US, Men and Women, 18+ years old; July 17-18, 2017
*Visa Zero Liability is not applicable to anonymous Visa Prepaid, Corporate and Commercial cards. Required keeping account and PIN safe. Other conditions and restrictions apply. Cardholders should refer to their issuer cardholder documentation for more details.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190813005081/en/

Source: Repay Holdings Corporation

For REPAY 
Investor Relations: 
repayIR@icrinc.com

Media Relations: 
Kristen Hoyman 
(404) 637-1665 
khoyman@repay.com