i3 Verticals(US:IIIV)2021-05-10 20:41Financial Position - As of March 31, 2021, the company had $2.4 million in cash and cash equivalents and $190.0 million of available capacity under its Senior Secured Credit Facility[238]. - As of March 31, 2021, the company had borrowings of $85.0 million under the Senior Secured Credit Facility, with a 1.0% change in interest rate impacting results by $0.9 million[325]. - The total contractual obligations as of March 31, 2021, amounted to $272.2 million, with $31.5 million due within one year[311]. - The total amount due under the Tax Receivable Agreement was $39.6 million as of March 31, 2021, with expected payments over the next 25 years[318]. - The company recognized an additional deferred tax asset of $3.0 million related to the Tax Receivable Agreement[308]. Acquisitions - The company acquired Business Information Systems for $96.0 million, including $52.5 million in cash and 1,202,914 shares of Class A Common Stock[244]. - The acquisition of ImageSoft, Inc. was completed for $47.0 million, with $40.0 million in cash consideration funded by the revolving credit facility[245]. - During the six months ended March 31, 2021, the company completed acquisitions totaling $23.0 million, including $19.6 million in cash consideration[246]. - Total purchase consideration for recent acquisitions included $37.4 million in cash, funded by proceeds from the revolving line of credit, and contingent consideration still being valued[243]. - Cash used in acquisitions for the six months ended March 31, 2021, was $112.1 million, net of cash acquired[301]. Revenue and Payment Volume - Revenue increased by $8.7 million, or 22.2%, to $47.9 million for the three months ended March 31, 2021, compared to $39.2 million for the same period in 2020, primarily driven by acquisitions[263]. - Payment volume rose by $0.7 billion, or 19%, to $4.3 billion for the three months ended March 31, 2021, from $3.6 billion for the same period in 2020, with acquisitions contributing an incremental $0.2 billion[267]. - Revenue increased by $10.9 million, or 13.6%, to $91.2 million for the six months ended March 31, 2021, compared to $80.3 million for the same period in 2020, primarily driven by acquisitions[278]. - Payment volume increased by $0.6 billion, or 8.7%, to $8.1 billion for the six months ended March 31, 2021, from $7.4 billion for the same period in 2020[282]. - Revenue from Proprietary Software and Payments increased by $14.1 million, or 51.6%, to $41.3 million for the six months ended March 31, 2021, from $27.3 million for the same period in 2020[281]. Expenses - Selling, general and administrative expenses increased by $9.7 million, or 46.8%, to $30.5 million for the three months ended March 31, 2021, primarily due to a rise in employment expenses[270]. - Selling, general and administrative expenses rose by $15.4 million, or 38.4%, to $55.5 million for the six months ended March 31, 2021, from $40.1 million for the same period in 2020[285]. - Depreciation and amortization expenses increased by $1.3 million, or 28.9%, to $5.9 million for the three months ended March 31, 2021, compared to $4.5 million for the same period in 2020[271]. - Other costs of services decreased by $0.6 million, or 5.4%, to $11.3 million for the three months ended March 31, 2021, from $12.0 million for the same period in 2020[268]. - Other costs of services increased by $0.1 million, or 0.4%, to $25.0 million for the six months ended March 31, 2021, from $24.9 million for the same period in 2020[283]. Net Income and Loss - The net loss attributable to i3 Verticals, Inc. was $440,000 for the three months ended March 31, 2021, a decrease of $297,000, or 40.3%, compared to a net income of $737,000 for the same period in 2020[262]. - Net (loss) income attributable to i3 Verticals, Inc. was $(2.1) million for the six months ended March 31, 2021, compared to $0.6 million for the same period in 2020, representing a decrease of $2.7 million[277]. Cash Flow - Net cash provided by operating activities was $23.9 million for the six months ended March 31, 2021, compared to $8.8 million for the same period in 2020[299]. - Net cash provided by operating activities increased by $15.0 million to $23.9 million for the six months ended March 31, 2021, compared to $8.8 million for the same period in 2020[300]. - Net cash used in investing activities increased significantly to $115.9 million for the six months ended March 31, 2021, from $3.9 million for the same period in 2020[299]. - Net cash used in investing activities rose by $112.1 million to $115.9 million for the six months ended March 31, 2021, primarily due to cash used in acquisitions[301]. - Net cash provided by financing activities increased by $88.9 million to $83.9 million for the six months ended March 31, 2021, compared to a cash outflow of $5.0 million for the same period in 2020[302]. Tax and Interest Rates - The effective tax rate was 62.1% for the three months ended March 31, 2021, differing from the federal statutory rate of 21% due to the company's tax structure[275]. - The Senior Secured Credit Facility requires maintenance of a minimum consolidated interest coverage ratio of 3.00 to 1.00 and a maximum total leverage ratio of 5.00 to 1.00[304]. - The interest rate on the Senior Secured Credit Facility is based on LIBOR plus an applicable margin of 3.25% as of March 31, 2021[324]. - The company is required to maintain a minimum consolidated interest coverage ratio of 3.00 to 1.00 and a maximum total leverage ratio of 5.00 to 1.00[324]. Market Impact - The company experienced a decline in payment volume and revenue due to the COVID-19 pandemic, particularly in the education and public sector verticals[235]. - Integrated payments accounted for 59% of payment volume for the three months ended March 31, 2021, up from 55% for the same period in 2020[259]. - Average net volume attrition per month remained below 2% during the six months ended March 31, 2021[260]. - The company does not expect significant impact from foreign currency transaction risk as invoices are denominated in U.S. dollars[326].