Verra Mobility(VRRM) - 2021 Q3 - Quarterly Report

PART I—FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and related disclosures Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, with detailed notes Condensed Consolidated Balance Sheets This statement details the company's financial position, including assets, liabilities, and equity, at specific reporting dates Condensed Consolidated Balance Sheets (in thousands) | Item | Sep 30, 2021 | Dec 31, 2020 (As restated) | | :----------------------------------- | :----------- | :------------------------- | | Total assets | $1,481,916 | $1,367,325 | | Total liabilities | $1,238,250 | $1,051,753 | | Total stockholders' equity | $243,666 | $315,572 | - Total assets increased by $114.6 million, primarily driven by increases in property and equipment, goodwill (due to Redflex acquisition), and other non-current assets[14][57][63] - Total liabilities increased by $186.5 million, mainly due to higher long-term debt from refinancing and the Redflex acquisition, and increases in accounts payable and accrued liabilities[14][57][67] - Total stockholders' equity decreased by $71.9 million, influenced by accumulated deficit and accumulated other comprehensive loss, despite net income[14][18][106] Condensed Consolidated Statements of Operations and Comprehensive Income This statement presents the company's revenues, expenses, and net income over specific reporting periods Condensed Consolidated Statements of Operations (in thousands, except per share data) | Item | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 (As restated) | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 (As restated) | | :------------------------------------------ | :------------------------------ | :-------------------------------------------- | :----------------------------- | :------------------------------------------- | | Total revenue | $162,095 | $96,908 | $380,610 | $293,430 | | Income from operations | $41,874 | $15,268 | $75,131 | $27,731 | | Net income | $27,306 | $11,086 | $22,383 | $9,504 | | Basic net income per share | $0.17 | $0.07 | $0.14 | $0.06 | | Diluted net income per share | $0.14 | $0.07 | $0.14 | $0.06 | - Total revenue increased by 67.3% for the three months and 29.7% for the nine months ended September 30, 2021, primarily driven by service revenue growth and the Redflex acquisition[16][147][159][175] - Net income increased by 146.3% to $27.3 million for the three months and 135.5% to $22.4 million for the nine months ended September 30, 2021, reflecting improved operating performance[16][173][190] - Basic EPS increased from $0.07 to $0.17 for the three months and from $0.06 to $0.14 for the nine months ended September 30, 2021[16] Condensed Consolidated Statements of Stockholders' Equity This statement outlines changes in the company's equity components, including net income, share repurchases, and other comprehensive income - Stockholders' equity decreased from $315.572 million at December 31, 2020, to $243.666 million at September 30, 2021[18] - Key changes include a $100 million share repurchase and retirement, net income contributions, and adjustments to additional paid-in capital and accumulated deficit[18][106] Condensed Consolidated Statements of Cash Flows This statement categorizes cash inflows and outflows from operating, investing, and financing activities over specific reporting periods Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 (As restated) | | :----------------------------------- | :----------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $129,284 | $44,350 | | Net cash used in investing activities | $(122,412) | $(18,250) | | Net cash provided by (used in) financing activities | $5,335 | $(27,949) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $10,300 | $(2,723) | - Net cash provided by operating activities significantly increased by $84.9 million to $129.3 million for the nine months ended September 30, 2021, driven by improved cash collections, especially from NYCDOT, and better operating performance[147][196] - Net cash used in investing activities increased to $122.4 million, primarily due to the Redflex acquisition ($107.0 million)[198] - Net cash provided by financing activities was $5.3 million, a shift from a $27.9 million usage in the prior year, reflecting debt refinancing and a $100 million share repurchase[199] Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Description of Business This note outlines the company's core business activities, segments, and global operational scope - Verra Mobility Corporation provides integrated technology solutions and services for commercial fleets, rental car companies, and government agencies globally, primarily in the US, Australia, Europe, and Canada[24] - Commercial Services Segment: Offers toll and violation management solutions, and title and registration services for commercial fleets and rental car industries in North America and Europe - Government Solutions Segment: Provides photo enforcement solutions and services, including speed, red-light, school bus stop arm, and bus lane enforcement, expanding internationally through the Redflex acquisition 2. Significant Accounting Policies This note details the key accounting principles, estimates, and judgments applied in preparing the financial statements - The company restated previously issued financial statements to adjust for private placement warrants, resulting in increases of $4.4 million and $11.5 million to net income for the three and nine months ended September 30, 2020, respectively[29][30] Significant Customer Revenue Concentrations (as % of total revenue) | Customer | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | City of New York Department of Transportation | 25.5% | 32.7% | 25.6% | 32.0% | | Hertz Corporation | 12.9% | 10.4% | 13.2% | 12.1% | | Avis Budget Group, Inc. | 13.5% | 9.3% | 12.8% | 9.5% | | Enterprise Holdings, Inc. | 10.9% | 13.4% | 12.4% | 10.9% | - The allowance for credit loss increased to $14.7 million at September 30, 2021, from $11.5 million at December 31, 2020, reflecting improved economic conditions for Commercial Services (All other) but increased estimates for Commercial Services (Driver-billed) due to higher revenue volume[14][37][38] - Accounting Standards Adopted: ASU 2018-13 (Fair Value Measurement), ASU 2019-12 (Income Taxes), and ASU 2020-06 (Convertible Instruments) were adopted in Q1 2021, with no material impact on financial statements, except for relevant disclosures for private placement warrant liabilities - Accounting Standards Not Yet Adopted: ASU 2020-04 (Reference Rate Reform),