United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
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Emerging growth company ☒
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Item 2.02. Results of Operations and Financial Condition.
On March 30, 2020, Priority Technology Holdings, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2019. A copy of that press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits – The following exhibit is furnished as part of this Current Report on Form 8-K.
Exhibit Number Description
104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: March 30, 2020 | ||
PRIORITY TECHNOLOGY HOLDINGS, INC. | ||
By: /s/ Michael Vollkommer | ||
Name: Michael Vollkommer | ||
Title: Chief Financial Officer | ||
Exhibit 99.1
Investor and Media Inquiries:
Chris Kettmann
773-497-7575
ckettmann@lincolnchurchilladvisors.com
Priority Technology Holdings, Inc. Announces Fourth Quarter and Full Year 2019 Results
ALPHARETTA, GEORGIA - March 30, 2020 -- Priority Technology Holdings, Inc. (NASDAQ: PRTH) (“Priority” or the “Company”), a leading provider of merchant acquiring, integrated payment software and commercial payment solutions, today announced its fourth quarter and full-year 2019 financial results.
Highlights of Consolidated Results
Fourth Quarter 2019, Compared with Fourth Quarter 2018
• | Revenue of $98.2 million increased 10.7% from $88.7 million. |
• | Gross profit of $31.4 million increased 15.1% from $27.3 million. The Company’s non-GAAP gross profit metric represents revenue less costs of services. |
• | Gross profit margin of 32.0% increased 124 basis points from 30.8%. Gross profit margin is non-GAAP gross profit divided by revenue. |
• | Income from operations of $1.1 million declined $1.6 million from $2.7 million, driven by a $3.3 million increase in depreciation and amortization expense. |
• | Interest expense of $10.1 million increased $2.0 million from $8.0 million. |
• | Net loss of $7.2 million increased $1.5 million from $5.7 million. |
• | Adjusted EBITDA of $16.2 million increased 34.9% from $12.0 million. The Company’s non-GAAP adjusted EBITDA measure is net loss before interest, taxes, depreciation and amortization (EBITDA), further adjusted for non-cash compensation and certain other expenses considered non-recurring. |
• | Total merchant bankcard processing dollar volume of $11.0 billion increased 16.2% from $9.4 billion. |
Full-Year 2019, Compared with Full-Year 2018
• | Revenue of $371.9 million decreased 1.1% from $375.8 million. |
• | Gross profit of $119.3 million increased 12.0% from $106.5 million. |
• | Gross profit margin of 32.1% increased 373 basis points from 28.3%. |
• | Income from operations of $7.2 million declined $9.2 million from $16.4 million, driven by a $19.4 million increase in depreciation and amortization expense, and a $17.8 million decrease in income from operations from certain subscription-billing e-commerce merchants. |
• | Interest expense of $40.7 million increased $10.7 million from $29.9 million. |
• | Net loss of $33.6 million increased $15.8 million from $17.8 million. |
• | Adjusted EBITDA of $58.9 million increased 19.2% from $49.4 million. |
• | Total merchant bankcard processing dollar volume of $43.0 billion increased 12.7% from $38.2 billion. |
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"We reported excellent fourth quarter and full-year 2019 results, reflecting the fundamental integrity of our business segments and the strong underlying momentum we’ve seen over the past several quarters," said Tom Priore, Executive Chairman and CEO of Priority. "We continue to benefit from our industry-leading technology and infrastructure, resulting in strong, broad-based demand for our products and services.”
Non-GAAP Highlights
The comparative revenue, gross profit, and income from operations for the fourth quarter and full-year 2019 were negatively affected by the wind-down of high-margin accounts with certain subscription-billing e-commerce merchants. The wind-down of merchants in this channel was due to industry-wide changes for enhanced card association compliance. This revenue, which is included entirely within the Consumer Payments reportable segment, was $1.5 million and $6.8 million in the fourth quarters of 2019 and 2018, respectively, and $7.8 million and $59.3 million in the years ended December 31, 2019 and 2018, respectively. The corresponding gross profit and income from operations associated with this revenue was $0.7 million and $3.0 million in the fourth quarters of 2019 and 2018, respectively, and $3.5 million and $21.3 million in the years ended December 31, 2019 and 2018, respectively.
Income from operations included certain operating expenses that the Company considers non-recurring in nature ("non-recurring expenses"). In 2019, these expenses were associated with transition services from YapStone, Inc. related to the integration of the March 2019 asset acquisition, and certain litigation and acquisition related advisory costs. In 2018, these expenses were associated with legal, accounting, advisory and consulting, largely associated with the conversion to a public company, and certain litigation costs. These operating expenses were $4.9 million and $2.1 million in the fourth quarters of 2019 and 2018, respectively, and were $8.9 million and $12.4 million in the years ended December 31, 2019 and 2018, respectively.
Non-GAAP consolidated adjusted revenue and income from operations, excluding the above items, for the fourth quarters of 2019 and 2018 and for the full-years 2019 and 2018, are as follows:
Fourth Quarter 2019, Compared with Fourth Quarter 2018
Consolidated adjusted revenue of $96.6 million in the fourth quarter of 2019 increased $14.7 million, or 18.0%. Consolidated adjusted income from operations of $5.2 million in the fourth quarter of 2019 increased $3.5 million.
Full-Year 2019, Compared with Full-Year 2018
Consolidated adjusted revenue of $364.1 million in the full-year 2019 increased $47.6 million, or 15.0%. Consolidated adjusted income from operations of $12.6 million in the full-year 2019 increased $5.1 million.
See “Non-GAAP Financial Measures” and the reconciliations of gross profit, gross profit margin, adjusted EBITDA, consolidated adjusted revenue and consolidated adjusted income from operations to their most comparable GAAP measures provided below for additional information.
Discussion of Reportable Segment Results
Consumer Payments Reportable Segment
Fourth Quarter 2019, Compared with Fourth Quarter 2018
Consumer Payments revenue in the fourth quarter of 2019 was $87.4 million, a 7.9% increase of $6.4 million compared with $81.0 million in the fourth quarter of 2018. This growth rate was hampered by a $5.3 million decline in revenue from the subscription-billing e-commerce merchants. Revenue generated by the remainder of Consumer Payments, excluding these e-Commerce merchants, increased $11.6 million, or 15.7%.
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Merchant bankcard volume processed in the fourth quarter of 2019 of $10.8 billion grew by 15.1%, as compared with $9.3 billion in the fourth quarter of 2018. Merchant bankcard transactions of 129.2 million in the fourth quarter of 2019 grew by 13.0%, as compared with $114.3 million in the fourth quarter of 2018. Average ticket of $83.24 grew 1.8% in the fourth quarter of 2019, as compared with $81.77 in the fourth quarter of 2018.
Consumer Payments income from operations in the fourth quarter of 2019 was $9.9 million, compared with $10.5 million in the fourth quarter of 2018. Costs of services of $62.8 million increased $5.6 million, depreciation and amortization of $8.6 million increased $2.2 million, and other operating expenses of $6.0 million decreased $0.9 million. Higher depreciation and amortization expense is related to acquisitions of affiliate assets and the December, 2018 acquisition of Direct Connect. Income from operations from the subscription-billing e-commerce merchants declined $2.3 million year over year. Consumer Payments adjusted income from operations of $9.2 million increased $1.7 million.
Full-Year 2019, Compared with Full-Year 2018
Consumer Payments revenue in the full-year 2019 was $330.6 million, a 4.7% decline of $16.4 million compared with $347.0 million in the full-year 2018. This decline was due to a $51.5 million decrease in revenue from the subscription-billing e-commerce merchants. Revenue generated by the remainder of Consumer Payments, excluding these e-Commerce merchants, increased $35.1 million, or 12.2%.
Merchant bankcard volume processed in the full-year 2019 of $42.3 billion grew by 11.6%, as compared with $37.9 billion in the full-year 2018. Merchant bankcard transactions of 511.9 million in the full-year 2019 grew by 9.9%, compared with 465.6 million in full-year 2018. Average ticket of $82.65 grew 1.5% in the full-year 2019, as compared with $81.39 in the full-year 2018.
Consumer Payments income from operations in the full-year 2019 was $32.2 million, compared with $47.0 million in the full-year 2018. Costs of services of $236.4 million decreased $16.8 million, depreciation and amortization of $32.8 million increased $14.9 million, and other operating expenses of $29.1 million increased $0.3 million. Higher depreciation and amortization expense is related to acquisitions of affiliate assets and the December 2018 acquisition of Direct Connect. Income from operations from the subscription-billing e-commerce merchants declined $17.8 million year over year. Consumer Payments adjusted income from operations of $28.7 million increased $3.0 million, or 11.8%.
See “Non-GAAP Financial Measures” and the reconciliations of Consumer Payments adjusted revenue and adjusted income from operations to their most comparable GAAP measures provided below for additional information.
Commercial Payments Reportable Segment
Fourth Quarter 2019, Compared with Fourth Quarter 2018
Commercial Payments revenue in the fourth quarter of 2019 was $6.5 million, a 6.0% decrease of $0.4 million compared with $6.9 million in the fourth quarter of 2018. Revenue from CPX accounts payable automated solutions of $1.6 million in the fourth quarter of 2019 increased 31.1% compared with $1.2 million in the fourth quarter of 2018. Revenue from curated managed services programs of $4.9 million in the fourth quarter of 2019 decreased by $0.8 million compared with $5.7 million in the fourth quarter of 2018. The managed services decline was largely driven by lower incentive revenue and program activity.
Commercial Payments income from operations in the fourth quarter of 2019 was $0.2 million, compared with a loss from operations of $0.2 million in the fourth quarter of 2018. Costs of services of $3.2 million decreased $0.7 million, and other operating expenses, including depreciation and amortization, decreased $0.1 million.
Full-Year 2019, Compared with Full-Year 2018
Commercial Payments revenue in the full-year 2019 amounted to $26.0 million, a 4.0% decrease of $1.1 million compared with $27.1 million in the full-year 2018. Revenue from CPX accounts payable automated solutions of $5.5 million in the full-year 2019 increased 27.8% compared with $4.3 million in the full-year 2018. Revenue from curated managed services programs of $20.5 million in the full-year 2019 declined by $2.3 million compared with $22.7 million
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in the full-year 2018. The managed services decline was largely driven by lower incentive revenue and program activity.
Commercial Payments loss from operations in the full-year 2019 was $0.9 million, compared with a $1.0 million loss from operations in the full-year 2018. Costs of services of $13.8 million decreased $1.7 million, and other operating expenses, including depreciation and amortization, increased $0.5 million.
Integrated Partners Reportable Segment
Fourth Quarter 2019, Compared with Fourth Quarter 2018
Integrated Partners revenue in the fourth quarter of 2019 was $4.3 million, an increase of $3.5 million compared with $0.8 million in the fourth quarter of 2018. Priority Real Estate Technology ("PRET") comprised $3.7 million of this reportable segment’s revenue in the fourth quarter of 2019. PRET is comprised of the assets acquired from YapStone, Inc. in March 2019 and the net assets acquired from RadPad Holdings, Inc. in July 2018. Revenue from Priority PayRight Health Solutions and Priority Hospitality Technology, which commenced operations in April 2018 and February 2019, respectively, comprised the remainder of this reportable segment’s revenue.
Integrated Partners loss from operations in the fourth quarter of 2019 was $0.6 million, compared with a loss from operations of $1.3 million in the fourth quarter of 2018. Costs of services of $0.7 million increased $0.4 million, depreciation and amortization of $1.3 million increased $1.2 million, and other operating expenses of $2.9 million increased $1.1 million. Depreciation and amortization expense is primarily related to assets acquired from YapStone, Inc. Other operating expenses included $1.7 million of temporary transition services from YapStone, Inc. related to integration of the asset acquisition. Integrated Partners adjusted income from operations in the fourth quarter of 2019, excluding these temporary transition services, was $1.1 million.
Full-Year 2019, Compared with Full-Year 2018
Integrated Partners revenue in the full-year 2019 amounted to $15.3 million compared with $1.8 million in the full-year 2018. PRET comprised $13.2 million of this reportable segment’s revenue in the full-year 2019. Revenue from Priority PayRight Health Solutions and Priority Hospitality Technology comprised the remainder of this reportable segment’s revenue.
Integrated Partners income from operations in the full-year 2019 was $0.7 million, compared with a loss from operations of $2.0 million in the full-year 2018. Costs of services of $2.3 million increased $1.8 million, depreciation and amortization of $4.4 million increased $4.3 million, and other operating expenses of $7.8 million increased $4.8 million. Depreciation and amortization expense is primarily related to assets acquired from YapStone, Inc. in March 2019. Other operating expenses included $2.9 million of temporary transition services from YapStone, Inc. related to integration of the asset acquisition. Integrated Partners adjusted income from operations in the full-year 2019, excluding these temporary transition services, was $3.6 million.
Corporate
Fourth Quarter 2019, Compared with Fourth Quarter 2018
Corporate expense in the fourth quarter of 2019 was $8.5 million, compared with $6.2 million in the fourth quarter of 2018. Non-recurring operating expenses were $3.2 million in the fourth quarter of 2019 and $2.1 million in the fourth quarter 2018. Excluding non-recurring operating expenses, Corporate expense was $5.3 million and $4.1 million in fourth quarter of 2019 and 2018, respectively.
Full-Year 2019, Compared with Full-Year 2018
Corporate expense in the full-year 2019 was $24.9 million, compared with $27.7 million in the full-year 2018. Non-recurring operating expenses were $6.0 million in the full-year 2019 and $12.4 million in the full-year 2018. Excluding non-recurring operating expenses, Corporate expense was $18.9 million and $15.3 million in full-year 2019 and 2018,
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respectively. Corporate expense included non-cash equity compensation of $1.5 million and $0.6 million in full-year 2019 and 2018, respectively.
2020 Outlook
Priore concluded, "Given the economic uncertainties related to the spread of the coronavirus, we have made the decision to suspend guidance until we have additional clarity into its impact on the broader economy and our business. That said, while the COVID-19 pandemic is an unpredictable event, we are seeing evidence that our past decisions to build defensively positioned and counter-cyclical, integrated payment assets in segments like rent, hospitality, healthcare and B2B has positioned us favorably to weather this crisis and future economic cycles."
Conference Call
Priority Technology Holdings, Inc.’s leadership will host a conference call on Tuesday, March 31, 2020 at 11:00 a.m. EDT to discuss its fourth quarter and full-year 2019 financial results. Participants can access the call by Phone: US/Canada: (877) 501-3161 or International: (786) 815-8443.
Internet webcast link and accompanying slide presentation can be accessed at https://edge.media-server.com/mmc/p/pv3hgp9p and will also be posted in the “Investor Relations” section of the Company’s website at www.PRTH.com.
An audio replay of the call will be available shortly after the conference call until April 3, 2020 at 11:30 am Eastern Time. To listen to the audio replay, dial (855) 859-2056 or (404) 537-3406 and enter conference ID number 2589847. Alternatively, you may access the webcast replay in the “Investor Relations” section of the Company’s website at www.PRTH.com.
Non-GAAP Financial Measures
This communication includes certain non-GAAP financial measures that we regularly review to evaluate our business and trends, measure our performance, prepare financial projections, allocate resources, and make strategic decisions. We believe these non-GAAP measures help illustrate the underlying financial and business trends relating to our results of operations and comparability between current and prior periods. We also use these non-GAAP measures to establish and monitor operational goals. However, these non-GAAP measures are not superior to or a substitute for prominent measurements calculated in accordance with GAAP. Rather, the non-GAAP measures are meant to be a complement to understanding measures prepared in accordance with GAAP.
Adjusted Revenue
Consolidated adjusted revenue and Consumer Payments adjusted revenue for the quarter and year ended December 31, 2019 has been negatively affected by the closure of high-margin accounts with certain subscription-billing e-commerce merchants. The closure of merchants in the Consumer Payments segment was due to industry-wide changes for enhanced card association compliance. We refer to consolidated adjusted revenue and Consumer Payments adjusted revenue, which excludes these revenue amounts from the periods presented. We review this non-GAAP measure to evaluate our underlying revenue and trends.
Gross Profit and Gross Profit Margin
The Company’s non-GAAP gross profit metric represents revenue less costs of services. Gross profit margin is gross profit divided by revenue. We review these non-GAAP measures to evaluate our underlying profit trends.
Adjusted Operating Expenses and Adjusted Income from Operations
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Consolidated adjusted operating expenses and adjusted income from operations, as well as Consumer Payments adjusted operating expenses and adjusted income from operations for the quarter and year ended December 31, 2019 has been negatively affected by the closure of the high-margin accounts with certain subscription-billing e-commerce merchants. We review these non-GAAP measures to evaluate our underlying profitability performance and trends.
Additionally, consolidated adjusted operating expenses and adjusted income from operations for the quarter and year ended December 31, 2019 has been negatively affected by the incurrence of non-recurring operating expenses largely associated with certain litigation and acquisition-related advisory costs and transition services from YapStone, Inc. We review these non-GAAP measures to evaluate our underlying profitability performance and trends.
Adjusted EBITDA and Consolidated Adjusted EBITDA
EBITDA is earnings before interest, income tax, depreciation and amortization expenses (“EBITDA”). Adjusted EBITDA begins with EBITDA but further excludes certain non-cash expenses such as equity-based compensation and fair value adjustments, debt modification costs and non-recurring expenses such as Business Combination costs, litigation settlement costs, certain legal services costs, and professional, accounting and consulting fees and transition services. Consolidated adjusted EBITDA begins with Adjusted EBITDA but further includes adjustments for the pro-forma impact of acquisitions, as well as adjustments to exclude other professional and consulting fees and certain other tax expenses and other adjustments. We review these non-GAAP adjusted EBITDA and consolidated adjusted EBITDA measures to evaluate our business and trends, measure our performance, prepare financial projections, allocate resources, and make strategic decisions.
The reconciliations of consolidated adjusted revenue, Consumer Payments adjusted revenue, gross profit, gross profit margin, consolidated adjusted operating expenses, consolidated adjusted income from operations, Consumer Payments adjusted operating expenses, Consumer Payments adjusted income from operations, adjusted EBITDA and consolidated adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP, are shown in the attached schedules to this press release.
Priority does not provide a reconciliation of forward-looking non-GAAP financial measures to their comparable GAAP financial measures because it could not do so without unreasonable effort due to the unavailability of the information needed to calculate reconciling items and due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP financial measures in future periods. When planning, forecasting and analyzing future periods, the Company does so primarily on a non-GAAP basis without preparing a GAAP analysis as that would require estimates for various cash and non-cash reconciling items that would be difficult to predict with reasonable accuracy. For example, equity compensation expense would be difficult to estimate because it depends on the Company’s future hiring and retention needs, as well as the future fair market value of the Company’s common stock, all of which are difficult to predict and subject to constant change. As a result, the Company does not believe that a GAAP reconciliation would provide meaningful supplemental information about the Company’s outlook.
About Priority Technology Holdings, Inc.
Priority is a leading provider of merchant acquiring, integrated payment software and commercial payment solutions, offering unique product and service capabilities to its merchant network and distribution partners. Priority’s enterprise operates from a purpose-built business platform that includes tailored customer service offerings and bespoke technology development, allowing the Company to provide end-to-end solutions for payment and payment-adjacent opportunities. Additional information can be found at www.PRTH.com.
Forward-Looking Statements
This press release 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 “may,” “will,” “should,” “anticipates,” “believes,” “expects,” “plans,” “future,”
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“intends,” “could,” “estimate,” “predict,” “projects,” “targeting,” “potential” or “contingent,” “guidance,” “anticipates,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, our 2020 outlook and statements regarding our market and growth opportunities. 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 risks, trends and uncertainties that could cause actual results to differ materially from those projected, expressed, or implied by such forward-looking statements. Our actual results could differ materially, and potentially adversely, from those discussed or implied herein.
We caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed in our SEC filings, including our most recent Annual Report on Form 10-K for 2019 filed with the SEC on March 30, 2020. These filings are available online at www.sec.gov or www.PRTH.com.
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the way we expect. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. The forward-looking statements included in this press release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.
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PRIORITY TECHNOLOGY HOLDINGS, INC.
Condensed Consolidated Statements of Operations
Quarter Ended December 31, 2019 Compared to Quarter Ended December 31, 2018
(unaudited)
(in thousands, except per share amounts) | Quarter Ended December 31, | |||||||||||||
Restated | ||||||||||||||
2019 | 2018 | Change | % Change | |||||||||||
REVENUES | $ | 98,183 | $ | 88,718 | $ | 9,465 | 10.7 | % | ||||||
OPERATING EXPENSES: | ||||||||||||||
Costs of services | 66,742 | 61,411 | 5,331 | 8.7 | % | |||||||||
Salary and employee benefits | 10,291 | 9,918 | 373 | 3.8 | % | |||||||||
Depreciation and amortization | 10,329 | 7,061 | 3,268 | 46.3 | % | |||||||||
Selling, general and administrative | 9,764 | 7,654 | 2,110 | 27.6 | % | |||||||||
Total operating expenses | 97,126 | 86,044 | 11,082 | 12.9 | % | |||||||||
Income from operations | 1,057 | 2,674 | (1,617 | ) | (60.5 | )% | ||||||||
OTHER (EXPENSES) INCOME: | ||||||||||||||
Interest expense | (10,051 | ) | (8,042 | ) | (2,009 | ) | 25.0 | % | ||||||
Other income (expense), net | 187 | (1,676 | ) | 1,863 | nm | |||||||||
Total other expenses, net | (9,864 | ) | (9,718 | ) | (146 | ) | 1.5 | % | ||||||
Loss before income taxes | (8,807 | ) | (7,044 | ) | (1,763 | ) | (25.0 | )% | ||||||
Income tax benefit | (1,638 | ) | (1,392 | ) | (246 | ) | 17.7 | % | ||||||
Net loss | $ | (7,169 | ) | $ | (5,652 | ) | $ | (1,517 | ) | (26.8 | )% | |||
Loss per common share: | ||||||||||||||
Basic and diluted | $ | (0.11 | ) | $ | (0.08 | ) | $ | (0.03 | ) | (37.5 | )% | |||
nm = not meaningful
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PRIORITY TECHNOLOGY HOLDINGS, INC.
Condensed Consolidated Statements of Operations
Year Ended December 31, 2019 Compared to Year Ended December 31, 2018
(unaudited)
(in thousands, except per share amounts) | Year Ended December 31, | |||||||||||||
Restated | ||||||||||||||
2019 | 2018 | Change | % Change | |||||||||||
REVENUES | $ | 371,854 | $ | 375,822 | $ | (3,968 | ) | (1.1 | )% | |||||
OPERATING EXPENSES: | ||||||||||||||
Costs of services | 252,569 | 269,284 | (16,715 | ) | (6.2 | )% | ||||||||
Salary and employee benefits | 42,214 | 38,324 | 3,890 | 10.2 | % | |||||||||
Depreciation and amortization | 39,092 | 19,740 | 19,352 | 98.0 | % | |||||||||
Selling, general and administrative | 30,795 | 32,081 | (1,286 | ) | (4.0 | )% | ||||||||
Total operating expenses | 364,670 | 359,429 | 5,241 | 1.5 | % | |||||||||
Income from operations | 7,184 | 16,393 | (9,209 | ) | (56.2 | )% | ||||||||
OTHER (EXPENSES) INCOME: | ||||||||||||||
Interest expense | (40,653 | ) | (29,935 | ) | (10,718 | ) | 35.8 | % | ||||||
Other income (expense), net | 710 | (6,784 | ) | 7,494 | nm | |||||||||
Total other expenses, net | (39,943 | ) | (36,719 | ) | (3,224 | ) | 8.8 | % | ||||||
Loss before income taxes | (32,759 | ) | (20,326 | ) | (12,433 | ) | (61.2 | )% | ||||||
Income tax expense (benefit) | 830 | (2,490 | ) | 3,320 | nm | |||||||||
Net loss | $ | (33,589 | ) | $ | (17,836 | ) | $ | (15,753 | ) | (88.3 | )% | |||
Loss per common share: | ||||||||||||||
Basic and diluted | $ | (0.50 | ) | $ | (0.29 | ) | $ | (0.21 | ) | (72.4 | )% | |||
nm = not meaningful
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PRIORITY TECHNOLOGY HOLDINGS, INC.
SEGMENT RESULTS
Quarter Ended December 31, 2019 Compared to Quarter Ended December 31, 2018
(unaudited)
(dollars and volume amounts in thousands) | Quarter Ended December 31, | |||||||||||||
Restated | ||||||||||||||
2019 | 2018 | Change | % Change | |||||||||||
Consumer Payments: | ||||||||||||||
Revenue | $ | 87,394 | $ | 81,027 | $ | 6,367 | 7.9 | % | ||||||
Operating expenses | 77,460 | 70,567 | 6,893 | 9.8 | % | |||||||||
Income from operations | $ | 9,934 | $ | 10,460 | $ | (526 | ) | (5.0 | )% | |||||
Operating margin | 11.4 | % | 12.9 | % | (1.5 | )% | ||||||||
Depreciation and amortization | $ | 8,627 | $ | 6,448 | $ | 2,179 | 33.8 | % | ||||||
Key indicators: | ||||||||||||||
Merchant bankcard processing dollar value | $ | 10,752,476 | $ | 9,344,239 | $ | 1,408,237 | 15.1 | % | ||||||
Merchant bankcard transaction volume | 129,176 | 114,280 | 14,896 | 13.0 | % | |||||||||
Commercial Payments: | ||||||||||||||
Revenue | $ | 6,488 | $ | 6,900 | $ | (412 | ) | (6.0 | )% | |||||
Operating expenses | 6,263 | 7,107 | (844 | ) | (11.9 | )% | ||||||||
Income (loss) from operations | $ | 225 | $ | (207 | ) | $ | 432 | (208.7 | )% | |||||
Operating margin | 3.5 | % | (3.0 | )% | 6.5 | % | ||||||||
Depreciation and amortization | $ | 74 | $ | 164 | $ | (90 | ) | (54.9 | )% | |||||
Key indicators: | ||||||||||||||
Merchant bankcard processing dollar value | $ | 75,626 | $ | 76,544 | $ | (918 | ) | (1.2 | )% | |||||
Merchant bankcard transaction volume | 26 | 33 | (7 | ) | (21.2 | )% | ||||||||
Integrated Partners: | ||||||||||||||
Revenue | $ | 4,301 | $ | 791 | $ | 3,510 | nm | |||||||
Operating expenses | 4,918 | 2,132 | 2,786 | nm | ||||||||||
Loss from operations | $ | (617 | ) | $ | (1,341 | ) | $ | 724 | nm | |||||
Depreciation and amortization | $ | 1,312 | $ | 54 | $ | 1,258 | nm | |||||||
Key indicators | ||||||||||||||
Merchant bankcard processing dollar value | $ | 126,207 | $ | 3,165 | $ | 123,042 | nm | |||||||
Merchant bankcard transaction volume | 467 | 28 | 439 | nm | ||||||||||
Income from operations of segments | $ | 9,542 | $ | 8,912 | $ | 630 | 7.1 | % | ||||||
Corporate expenses | (8,485 | ) | (6,238 | ) | (2,247 | ) | 36.0 | % | ||||||
Consolidated income from operations | $ | 1,057 | $ | 2,674 | $ | (1,617 | ) | (60.5 | )% | |||||
Corporate depreciation and amortization | $ | 316 | $ | 395 | $ | (79 | ) | (20.0 | )% | |||||
Key indicators: | ||||||||||||||
Merchant bankcard processing dollar value | $ | 10,954,309 | $ | 9,423,948 | 1,530,361 | 16.2 | % | |||||||
Merchant bankcard transaction volume | 129,669 | 114,341 | 15,328 | 13.4 | % | |||||||||
nm = not meaningful
10
PRIORITY TECHNOLOGY HOLDINGS, INC.
SEGMENT RESULTS
Year Ended December 31, 2019 Compared to Year Ended December 31, 2018
(unaudited)
(dollars and volume amounts in thousands) | Year Ended December 31, | |||||||||||||
Restated | ||||||||||||||
2019 | 2018 | Change | % Change | |||||||||||
Consumer Payments: | ||||||||||||||
Revenue | $ | 330,599 | $ | 347,013 | $ | (16,414 | ) | (4.7 | )% | |||||
Operating expenses | 298,362 | 300,011 | (1,649 | ) | (0.5 | )% | ||||||||
Income from operations | $ | 32,237 | $ | 47,002 | $ | (14,765 | ) | (31.4 | )% | |||||
Operating margin | 9.8 | % | 13.5 | % | (3.7 | )% | ||||||||
Depreciation and amortization | $ | 32,842 | $ | 17,945 | $ | 14,897 | 83.0 | % | ||||||
Key indicators: | ||||||||||||||
Merchant bankcard processing dollar value | $ | 42,303,880 | $ | 37,892,474 | $ | 4,411,406 | 11.6 | % | ||||||
Merchant bankcard transaction volume | 511,852 | 465,584 | 46,268 | 9.9 | % | |||||||||
Commercial Payments: | ||||||||||||||
Revenue | $ | 25,980 | $ | 27,056 | $ | (1,076 | ) | (4.0 | )% | |||||
Operating expenses | 26,871 | 28,008 | (1,137 | ) | (4.1 | )% | ||||||||
Loss from operations | $ | (891 | ) | $ | (952 | ) | $ | 61 | nm | |||||
Operating margin | (3.4 | )% | (3.5 | )% | 0.1 | % | ||||||||
Depreciation and amortization | $ | 323 | $ | 557 | $ | (234 | ) | (42.0 | )% | |||||
Key indicators: | ||||||||||||||
Merchant bankcard processing dollar value | $ | 312,342 | $ | 257,308 | $ | 55,034 | 21.4 | % | ||||||
Merchant bankcard transaction volume | 109 | 118 | (9 | ) | (7.6 | )% | ||||||||
Integrated Partners: | ||||||||||||||
Revenue | $ | 15,275 | $ | 1,753 | $ | 13,522 | nm | |||||||
Operating expenses | 14,550 | 3,722 | 10,828 | nm | ||||||||||
Income (loss) from operations | $ | 725 | $ | (1,969 | ) | $ | 2,694 | nm | ||||||
Depreciation and amortization | $ | 4,398 | $ | 145 | $ | 4,253 | nm | |||||||
Key indicators: | ||||||||||||||
Merchant bankcard processing dollar value | $ | 386,101 | $ | 5,516 | $ | 380,585 | nm | |||||||
Merchant bankcard transaction volume | 1,380 | 55 | 1,325 | nm | ||||||||||
Income from operations of segments | $ | 32,071 | $ | 44,081 | $ | (12,010 | ) | (27.2 | )% | |||||
Corporate expenses | (24,887 | ) | (27,688 | ) | 2,801 | (10.1 | )% | |||||||
Consolidated income from operations | $ | 7,184 | $ | 16,393 | $ | (9,209 | ) | (56.2 | )% | |||||
Corporate depreciation and amortization | $ | 1,529 | $ | 1,093 | $ | 436 | 39.9 | % | ||||||
Key indicators: | ||||||||||||||
Merchant bankcard processing dollar value | $ | 43,002,323 | $ | 38,155,298 | $ | 4,847,025 | 12.7 | % | ||||||
Merchant bankcard transaction volume | 513,341 | 465,757 | 47,584 | 10.2 | % | |||||||||
nm = not meaningful
11
PRIORITY TECHNOLOGY HOLDINGS, INC.
Condensed Consolidated Balance Sheets
As of December 31, 2019 and 2018
(unaudited)
(in thousands) | Restated | ||||||
December 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 3,234 | $ | 15,631 | |||
Restricted cash | 47,231 | 18,200 | |||||
Accounts receivable, net | 37,993 | 36,257 | |||||
Prepaid expenses and other current assets | 3,897 | 3,642 | |||||
Current portion of notes receivable | 1,326 | 979 | |||||
Settlement assets | 533 | 383 | |||||
Total current assets | 94,214 | 75,092 | |||||
Notes receivable, less current portion | 4,395 | 852 | |||||
Property, equipment, and software, net | 23,518 | 17,482 | |||||
Goodwill | 109,515 | 109,515 | |||||
Intangible assets, net | 182,826 | 124,637 | |||||
Deferred income tax assets, net | 49,657 | 50,423 | |||||
Other non-current assets | 380 | 1,295 | |||||
Total assets | $ | 464,505 | $ | 379,296 | |||
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 26,965 | $ | 27,638 | |||
Accrued residual commissions | 19,315 | 18,715 | |||||
Customer deposits and advance payments | 4,928 | 3,282 | |||||
Current portion of long-term debt | 4,007 | 3,293 | |||||
Settlement obligations | 37,789 | 10,355 | |||||
Total current liabilities | 93,004 | 63,283 | |||||
Long-term debt, net of discounts and deferred financing costs | 485,578 | 402,095 | |||||
Other non-current liabilities | 6,612 | 7,936 | |||||
Total long-term liabilities | 492,190 | 410,031 | |||||
Total liabilities | 585,194 | 473,314 | |||||
Stockholders' deficit: | |||||||
Common stock | 68 | 67 | |||||
Additional paid-in capital | 3,651 | — | |||||
Treasury stock, at cost | (2,388 | ) | — | ||||
Accumulated deficit | (127,674 | ) | (94,085 | ) | |||
Total deficit attributable to stockholders of PRTH | (126,343 | ) | (94,018 | ) | |||
Non-controlling interest | 5,654 | — | |||||
Total stockholders' deficit | (120,689 | ) | (94,018 | ) | |||
Total liabilities and stockholders' deficit | $ | 464,505 | $ | 379,296 | |||
12
PRIORITY TECHNOLOGY HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
For the Years Ended December 31, 2019 and 2018
(unaudited)
(in thousands) | Year Ended December 31, | |||||||
Restated | ||||||||
2019 | 2018 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net loss | $ | (33,589 | ) | $ | (17,836 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization of assets | 39,092 | 19,740 | ||||||
Equity-based compensation | 3,652 | 1,649 | ||||||
Amortization of debt issuance costs and discount | 1,667 | 1,418 | ||||||
Equity in losses and impairment of unconsolidated entities | 23 | 865 | ||||||
Provision for deferred income taxes | (8,537 | ) | (2,871 | ) | ||||
Provision for allowance for deferred income tax assets | 9,302 | (66 | ) | |||||
Change in fair value of warrant liability | — | 3,458 | ||||||
Change in fair value of contingent consideration | (620 | ) | — | |||||
Payment-in-kind interest | 5,126 | 4,897 | ||||||
Other non-cash items | (831 | ) | 211 | |||||
Net change in operating assets and liabilities (net of business combinations) | 24,079 | 19,883 | ||||||
Net Cash Provided By Operating Activities | 39,364 | 31,348 | ||||||
Cash Flows From Investing Activities: | ||||||||
Acquisitions of businesses | (184 | ) | (7,508 | ) | ||||
Additions to property, equipment, and software | (11,118 | ) | (10,562 | ) | ||||
Notes receivable loan funding | (3,500 | ) | — | |||||
Acquisitions of intangible assets | (82,945 | ) | (90,858 | ) | ||||
Net Cash Used In Investing Activities | (97,747 | ) | (108,928 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Proceeds from issuance of long-term debt, net of issue discount | 69,650 | 126,813 | ||||||
Repayments of long-term debt | (3,828 | ) | (2,834 | ) | ||||
Borrowings under revolving line of credit | 14,000 | 8,000 | ||||||
Repayments of borrowings under revolving line of credit | (2,500 | ) | (8,000 | ) | ||||
Debt issuance costs refunded (paid) | 83 | (425 | ) | |||||
Repurchases of common stock | (2,388 | ) | — | |||||
Distributions from equity | — | (7,075 | ) | |||||
Redemptions of equity interests | — | (76,211 | ) | |||||
Recapitalization proceeds | — | 49,389 | ||||||
Redemption of warrants | — | (12,701 | ) | |||||
Recapitalization costs | — | (9,704 | ) | |||||
Net Cash Provided By Financing Activities | 75,017 | 67,252 | ||||||
Net change in cash and cash equivalents | 16,634 | (10,328 | ) | |||||
Cash and cash equivalents at beginning of year | 33,831 | 44,159 | ||||||
Cash and cash equivalents at end of year | $ | 50,465 | $ | 33,831 | ||||
Supplemental disclosure of non-cash financing activities: | ||||||||
Cash paid for interest | $ | 33,091 | $ | 23,350 | ||||
13
PRIORITY TECHNOLOGY HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)
The non-GAAP reconciliations of Adjusted Consolidated Revenue, Adjusted Consolidated Operating Expenses, Adjusted Consolidated Income from Operations, Consolidated Gross Profit, Consolidated Gross Profit Margin, Adjusted Consumer Payments Revenue, Adjusted Consumer Payments Operating Expenses, and Adjusted Consumer Payments Income from Operations to the most directly comparable financial measures calculated and presented in accordance with GAAP, are shown in the following two tables:
(in thousands) | Quarter ended December 31, | |||||||
Restated | ||||||||
2019 | 2018 | |||||||
Consolidated revenue (GAAP) | $ | 98,183 | $ | 88,718 | ||||
Less: Revenue from certain subscription-billing e-commerce merchants | (1,540 | ) | (6,813 | ) | ||||
Adjusted consolidated revenue (non-GAAP) | $ | 96,643 | $ | 81,905 | ||||
Consolidated operating expenses (GAAP) | $ | 97,126 | $ | 86,044 | ||||
Less: Operating expenses of certain subscription-billing e-commerce merchants | (797 | ) | (3,813 | ) | ||||
Less: Non-recurring expenses | (4,930 | ) | (2,089 | ) | ||||
Adjusted consolidated operating expenses (non-GAAP) | $ | 91,399 | $ | 80,142 | ||||
Consolidated income from operations (GAAP) | $ | 1,057 | $ | 2,674 | ||||
Less: Gross profit from certain subscription-billing-e-commerce merchants | (743 | ) | (3,000 | ) | ||||
Add: Non-recurring expenses | 4,930 | 2,089 | ||||||
Adjusted consolidated income from operations (non-GAAP) | $ | 5,244 | $ | 1,763 | ||||
Consolidated gross profit (non-GAAP) | ||||||||
Consolidated revenue | $ | 98,183 | $ | 88,718 | ||||
Less: Consolidated costs of services | (66,742 | ) | (61,411 | ) | ||||
Consolidated gross profit (non-GAAP) | $ | 31,441 | $ | 27,307 | ||||
Consolidated gross profit margin (non-GAAP) | 32.0 | % | 30.8 | % | ||||
Consumer Payments revenue (GAAP) | $ | 87,394 | $ | 81,027 | ||||
Less: Revenue from certain subscription-billing e-commerce merchants | (1,540 | ) | (6,813 | ) | ||||
Adjusted Consumer Payments revenue (non-GAAP) | $ | 85,854 | $ | 74,214 | ||||
Consumer Payments operating expenses (GAAP) | $ | 77,460 | $ | 70,567 | ||||
Less: Operating expenses of certain subscription-billing e-commerce merchants | (797 | ) | (3,813 | ) | ||||
Adjusted Consumer Payments operating expenses (non-GAAP) | $ | 76,663 | $ | 66,754 | ||||
Consumer Payments income from operations (GAAP) | $ | 9,934 | $ | 10,460 | ||||
Less: Gross profit from certain subscription-billing-e-commerce merchants | (743 | ) | (3,000 | ) | ||||
Adjusted Consumer Payments income from operations (non-GAAP) | $ | 9,191 | $ | 7,460 | ||||
14
PRIORITY TECHNOLOGY HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)
(in thousands) | Year ended December 31, | |||||||
Restated | ||||||||
2019 | 2018 | |||||||
Consolidated revenue (GAAP) | $ | 371,854 | $ | 375,822 | ||||
Less: Revenue from certain subscription-billing e-commerce merchants | (7,780 | ) | (59,310 | ) | ||||
Adjusted consolidated revenue (non-GAAP) | $ | 364,074 | $ | 316,512 | ||||
Consolidated operating expenses (GAAP) | $ | 364,670 | $ | 359,429 | ||||
Less: Operating expenses of certain subscription-billing e-commerce merchants | (4,281 | ) | (38,003 | ) | ||||
Less: Non-recurring expenses | (8,886 | ) | (12,371 | ) | ||||
Adjusted consolidated operating expenses (non-GAAP) | $ | 351,503 | $ | 309,055 | ||||
Consolidated income from operations (GAAP) | $ | 7,184 | $ | 16,393 | ||||
Less: Gross profit from certain subscription-billing-e-commerce merchants | (3,500 | ) | (21,307 | ) | ||||
Add: Non-recurring expenses | 8,886 | 12,371 | ||||||
Adjusted consolidated income from operations (non-GAAP) | $ | 12,570 | $ | 7,457 | ||||
Consolidated gross profit (non-GAAP) | ||||||||
Consolidated revenue | $ | 371,854 | $ | 375,822 | ||||
Less: Consolidated costs of services | (252,569 | ) | (269,284 | ) | ||||
Consolidated gross profit (non-GAAP) | $ | 119,285 | $ | 106,538 | ||||
Consolidated gross profit margin (non-GAAP) | 32.1 | % | 28.3 | % | ||||
Consumer Payments revenue (GAAP) | $ | 330,599 | $ | 347,013 | ||||
Less: Revenue from certain subscription-billing e-commerce merchants | (7,780 | ) | (59,310 | ) | ||||
Adjusted Consumer Payments revenue (non-GAAP) | $ | 322,819 | $ | 287,703 | ||||
Consumer Payments operating expenses (GAAP) | $ | 298,362 | $ | 300,011 | ||||
Less: Operating expenses of certain subscription-billing e-commerce merchants | (4,281 | ) | (38,003 | ) | ||||
Adjusted Consumer Payments operating expenses (non-GAAP) | $ | 294,081 | $ | 262,008 | ||||
Consumer Payments income from operations (GAAP) | $ | 32,237 | $ | 47,002 | ||||
Less: Gross profit from certain subscription-billing-e-commerce merchants | (3,500 | ) | (21,307 | ) | ||||
Adjusted Consumer Payments income from operations (non-GAAP) | $ | 28,737 | $ | 25,695 | ||||
15
PRIORITY TECHNOLOGY HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)
The non-GAAP reconciliations of EBITDA, Adjusted EBITDA and Consolidated Adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, are shown in the following two tables:
(in thousands) | Quarter Ended December 31, | |||||||
Restated | ||||||||
2019 | 2018 | |||||||
Net loss (GAAP) | $ | (7,169 | ) | $ | (5,652 | ) | ||
Add: Interest expense (1) | 10,051 | 8,042 | ||||||
Add: Depreciation and amortization | 10,329 | 7,061 | ||||||
Add: Income tax benefit | (1,638 | ) | (1,392 | ) | ||||
EBITDA (non-GAAP) | 11,573 | 8,059 | ||||||
Further adjusted by: | ||||||||
Add: Non-cash equity-based compensation | 298 | 586 | ||||||
Add: Debt modification costs and warrant fair value changes | — | 1,261 | ||||||
Add: Changes in fair value of contingent consideration | (620 | ) | — | |||||
Add: Non-recurring expenses: | ||||||||
Litigation settlement costs | 34 | 100 | ||||||
Certain legal services (2) | 2,103 | 918 | ||||||
Professional, accounting and consulting fees (3) | 1,070 | 1,071 | ||||||
YapStone transition services | 1,723 | — | ||||||
Adjusted EBITDA (non-GAAP) | 16,181 | 11,995 | ||||||
Further adjusted by: | ||||||||
Add: Pro-forma impacts for acquisitions | — | 1,080 | ||||||
Add: Contracted revenue and savings | 857 | — | ||||||
Add: Other professional and consulting fees | 606 | 339 | ||||||
Add: Other tax expenses and other adjustments | 296 | 277 | ||||||
Consolidated Adjusted EBITDA (non-GAAP) (4) | $ | 17,940 | $ | 13,691 | ||||
16
PRIORITY TECHNOLOGY HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)
(in thousands) | Year Ended December 31, | |||||||
Restated | ||||||||
2019 | 2018 | |||||||
Net loss (GAAP) | $ | (33,589 | ) | $ | (17,836 | ) | ||
Add: Interest expense (1) | 40,653 | 29,935 | ||||||
Add: Depreciation and amortization | 39,092 | 19,740 | ||||||
Add: Income tax expense (benefit) | 830 | (2,490 | ) | |||||
EBITDA (non-GAAP) | 46,986 | 29,349 | ||||||
Further adjusted by: | ||||||||
Add: Non-cash equity-based compensation | 3,652 | 1,649 | ||||||
Add: Debt modification costs and warrant fair value changes | — | 6,042 | ||||||
Add: Changes in fair value of contingent consideration | (620 | ) | — | |||||
Add: Non-recurring expenses: | ||||||||
Litigation settlement (recoveries) costs | (377 | ) | 1,615 | |||||
Certain legal services (2) | 3,779 | 4,900 | ||||||
Professional, accounting and consulting fees (3) | 2,574 | 5,856 | ||||||
YapStone transition services | 2,910 | — | ||||||
Adjusted EBITDA (non-GAAP) | 58,904 | 49,411 | ||||||
Further adjusted by: | ||||||||
Add: Pro-forma impacts for acquisitions | 6,801 | 14,010 | ||||||
Add: Contracted revenue and savings | 4,069 | 2,924 | ||||||
Add: Other professional and consulting fees | 1,717 | 1,236 | ||||||
Add: Other tax expenses and other adjustments | 596 | 1,566 | ||||||
Consolidated Adjusted EBITDA (non-GAAP) (4) | $ | 72,087 | $ | 69,147 | ||||
(1) | Interest expense includes amortization of debt issuance costs and discount. |
(2) | Legal expenses related to business and asset acquisition activity and settlement negotiation and other litigation expenses. |
(3) | Primarily transaction-related, capital markets and accounting advisory services. |
(4) | Presented to reflect the definition in the Company's credit agreements, as amended. The Consolidated Adjusted EBITDA of the Borrowers under the credit agreements excluded expenses of Priority Technology Holdings, Inc., which is neither a Borrower nor a guarantor under the credit agreements, subsequent to the Business Combination until December 31, 2019. Effective December 31, 2019, in accordance with the Sixth Amendment to the Company's Credit and Guaranty Agreement, the Consolidated Adjusted EBITDA of the Borrowers under the credit agreements includes expenses of Priority Technology Holdings, Inc. Consolidated Adjusted EBITDA of the Borrowers was approximately$72.1 million and $75.0 million for the years ended December 31, 2019 and 2018, respectively. The 2018 amount excludes $5.8 million of expenses of Priority Technology Holdings, Inc. |
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17