ATLANTA--(BUSINESS WIRE)--May 11, 2020--Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today reported financial results for its first quarter of 2020.

“While the world has changed over the past few months, our mission and principles have remained the same and we’ve found the value proposition of our business has grown even stronger. We have continued to experience increased demand for our offerings, across existing and new clients, as our customers have accelerated implementation of electronic payment options. This is reflected in our first quarter results, which show growth in card payment volume and gross profit of 58% and 60%, respectively. Organically, we also had a successful quarter reporting organic gross profit growth of 20%, compared to the first quarter of 2019. While the business did experience some impact toward the end of March, we are seeing positive momentum early into the second quarter as consumers and merchants continue to adopt and implement remote payments,” said John Morris, CEO of REPAY. “We are proud to be able to serve our merchants, providing them with rapid access and deployment of the services they need to satisfy their customers in this unprecedented time. I could not be more grateful for our team and would like to personally thank them for their outstanding efforts through this challenging period. I would also like to offer my heartfelt empathy for the struggles that many in our market and community-at-large are facing.”

Three Months Ended March 31, 2020 Highlights

• Card payment volume was $3.8 billion, an increase of 58% over the first quarter of 2019
• Total revenue was $39.5 million, a 71% increase over the first quarter of 2019
• Gross profit was $28.7 million, an increase of 60% over the first quarter of 2019
• Pro forma net income¹ was $1.9 million, as compared to net income of $4.9 million in the first quarter 2019
• Adjusted EBITDA was $17.4 million, an increase of 53% over the first quarter of 2019
• Adjusted Net Income was $11.4 million, an increase of 29% over the first quarter of 2019
• Adjusted Net Income per share was $0.17

Gross profit represents total revenue less other costs of services. Adjusted EBITDA, Adjusted Net Income, Adjusted New Income per share and organic gross profit growth are non-GAAP financial measures. See “Non-GAAP Financial Measures” and the reconciliations of Adjusted EBITDA and Adjusted Net Income to their most comparable GAAP measures 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 the first quarter of 2019. 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 April 6, 2020, REPAY borrowed approximately $14.4 million utilizing the delayed draw term loan facility under its existing credit agreement. Such proceeds were used to satisfy a performance-based earnout obligation payable in connection with the APS Payments acquisition (which REPAY announced and closed in October 2019).

2020 Outlook

Due to the uncertainties associated with the COVID-19 pandemic, the Company is replacing its 2020 guidance with illustrative scenarios that make assumptions on the macroeconomic and market-specific drivers that may impact its business over the remainder of the year. Those illustrative scenarios, and their impact on the previously provided 2020 outlook, are shown in a supplemental information deck which can be found on the Investor Relations section of the company’s website: https://investors.repay.com/investor-relations.

Conference Call

REPAY will host a conference call to discuss first quarter 2020 financial results today at 5:00 pm ET. Hosting the call will be John Morris, CEO, and Tim Murphy, CFO. The call will be webcast live from REPAY’s investor relations website at https://investors.repay.com/investor-relations. 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 13702782. 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, net of tax effect associated with these adjustments. 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 weighted average number of shares of Class A common stock outstanding (on as-converted basis) for the three months ended March 31, 2020 (excluding shares subject to forfeiture). Organic gross profit growth is a non-GAAP financial measure that represents the year-on-year gross profit growth that excludes gross profit attributed to acquisitions made in 2019 and 2020. REPAY believes that Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share and organic gross profit growth 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, Adjusted Net Income per share and organic gross profit growth 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, organic gross profit growth 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, Adjusted Net Income per share and organic gross profit growth 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, 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 2020 outlook and the effects of the COVID-19 pandemic on this outlook, expected demand on REPAY’s product offering, including further implementation of electronic payment options and statements regarding REPAY’s market and growth opportunities. 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.

In addition to factors disclosed in REPAY’s reports filed with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, 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: exposure to economic conditions and political risk affecting the consumer loan market and consumer and commercial spending; the impacts of the ongoing COVID-19 coronavirus pandemic and the actions taken to control or mitigate its spread (which impacts are highly uncertain and cannot be reasonably estimated or predicted at this time); 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; a delay or failure to integrate and realize the benefits of the Ventanex acquisition and any difficulties associated with marketing products and services in the mortgage or B2B healthcare 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. 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. 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.

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 months ended March 31, 2020 and 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 first quarter 2020 results to first quarter 2019 results from continuing operations for the period ended March 31, respectively.

The following tables and related notes reconcile these Non-GAAP measures and the Pro Forma Measures to GAAP information for the three month period ended March 31, 2020 and 2019:

(1) Gross profit for represents total revenue less 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.

(a) See footnote (j) for details on our amortization and depreciation expenses.
(b) Reflects the changes in management’s estimates of the fair value of the liability relating to the Tax Receivable Agreement.
(c) Represents compensation expense associated with Hawk Parent’s equity compensation plans, totaling $127,195 in the Predecessor period and $3,522,731 as a result of new grants made in the Successor period.
(d) Primarily consists of (i) during the three months ended March 31, 2020, professional service fees and other costs incurred in connection with the acquisition of Ventanex, and additional transaction expenses incurred in connection with the Business Combination and the acquisitions of TriSource Solutions and APS Payments, which transactions closed in 2019 and (ii) during the three months ended March 31, 2019, professional service fees and other costs incurred in connection with the Business Combination.
(e) Reflects management fees paid to Corsair Investments, L.P. pursuant to the management agreement, which terminated upon the completion of the Business Combination.
(f) 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.
(g) Reflects franchise taxes and other non-income based taxes.
(h) Represents consulting fees relating to our processing services and other operational improvements that were not in the ordinary course.
(i) For the three months ended March 31, 2020, reflects expenses incurred related to one-time accounting system and compensation plan implementation related to becoming a public company, as well as extraordinary refunds to customers and other payments related to COVID-19.
(j) For the three months ended March 31, 2019, 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 months ended March 31, 2020 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 acquisitions of TriSource Solutions, APS Payments, and Ventanex. 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:

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.

(k) Represents the weighted average number of shares of Class A common stock outstanding (on as-converted basis) for the three months ended March 31, 2020 (excluding shares that were subject to forfeiture).
(l) Adjustment for incremental depreciation and amortization recorded due to fair-value adjustments under ASC 805 in the Successor period.
(m) Represents pro forma income tax adjustment effect associated with items adjusted above. As Hawk Parent, as the accounting Predecessor, was not subject to income taxes, the tax effect above was calculated on the adjustments related to the Successor period only.

---

View source version on businesswire.com: https://www.businesswire.com/news/home/20200511005878/en/

Investor Relations Contact for REPAY:
repayIR@icrinc.com

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

Source: Repay Holdings Corporation

ATLANTA--(BUSINESS WIRE)--Apr. 30, 2020-- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today announced the appointment of Jacob “Jake” H. Moore as Executive Vice President of Corporate Development and Strategy. Mr. Moore will be responsible for the Company’s M&A activities and overall strategic initiatives.

Mr. Moore has led REPAY’s corporate development strategy for more than three years, overseeing and supporting REPAY’s long-term growth strategy through the identification, assessment, and execution of the Company’s mergers, acquisitions, investments, and joint ventures. During his tenure, REPAY has completed five acquisitions across numerous end markets.

“Jake has been an integral part of our team, and we’d like to congratulate him on this new appointment,” said John Morris, CEO of REPAY. “Jake’s leadership has been instrumental in successfully executing our numerous acquisitions and recent go-public transaction. Strategic M&A will continue to be a core pillar of our overall growth strategy. His experience, both with REPAY and the industry, along with his strategic vision, will continue to be very valuable to us in achieving our organic and inorganic growth targets.”

Prior to joining REPAY, Mr. Moore was a private equity investment professional, serving as a Senior Associate at BlueArc Capital Management and as an Associate at Trinity Hunt Partners. He was also an investment banker in the Mergers and Acquisitions Group at SunTrust Robinson Humphrey.

Mr. Moore received his Master of Business Administration from Duke University’s Fuqua School of Business and his Bachelor of Arts in Economics and Political Science, magna cum laude, from Colgate University.

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/20200430005066/en/

Investor Relations Contact for REPAY:
repayIR@icrinc.com

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

Source: Repay Holdings Corporation

Delinquencies were increasing before the virus outbreak. What happens now? Even before the massive drop in economic activity due to COVID-19, there were signs of trouble brewing on the subprime loan side of the auto lending market. Now more than ever, it's important for subprime lenders to understand and effectively manage these delinquencies.

Subprime Loans by the Numbers

While a subprime borrower has a lower credit score and presents a greater credit risk than an average borrower, the definition of “subprime” in terms of credit score varies. For our purposes, we’ll consider subprime to be a credit score of less than 620. Auto debt is the 3^rd largest debt category in the US after mortgages and student loans. It now makes up 10% of total household debt. The Federal Reserve Bank of New York issues a quarterly household debt study and based on its most recent study, and as seen in the chart below, about 15% ($25 – 30 billion) of 2019:Q4 auto loans are considered subprime. Per financial analyst Wolf Richter, severe delinquencies on subprime auto loans have exploded, surging to a new record as of February 2020. Out of the $1.3 trillion in auto loan and lease balances, we know around $25 billion are subprime. We also know that almost a quarter, approximately $66 billion, were 90+ days delinquent in the fourth quarter of 2019. And this was before the virus outbreak. At 90+ days delinquent, we all know the unfortunate reality: these borrowers are unlikely to come back and make the balance current again. Here’s another interesting chart from the Federal Reserve Bank of New York, showing 2.5% of all auto loans are 90+days delinquent, up 0.5% since 2014 and steadily increasing (NY Fed Debt Survey, slide 14). Cox Automotive, owners of Kelley Blue Book & AutoTrader, reports that severely delinquent accounts are up 5.4% year over year, painting a tough picture for subprime auto lenders.

What Can Subprime Auto Lenders Do Now?

As a subprime auto lender, you are, in part, stuck with the paper you have in your portfolio. Loans have been written and need to be serviced. So what to do now? Here are some simple but effective steps to take:

1. Be proactive and maintain contact with the investor groups that buy your loans.
2. Expand your payment options to make paying on existing loans as easy as possible for borrowers. Consider online payments, IVR (Interactive Voice Response), and text pay so borrowers can pay via cards and bank accounts whenever they have the cash available.
3. Adapt communication styles to your borrowers’ preferences – implement text messaging services to send payment reminders and account updates.
4. Ensure all relevant paperwork is complete, so you have what you need if the loan goes south.
5. Fine-tune and be ready to show your collection and repossession procedures to prepare for any incoming repossessions.

There’s not much else you can do with your existing loans as they move through the servicing cycle, but you can use this information when evaluating new loans. However, it’s important to keep in mind our upcoming post-COVID-19 world. The NY Post reports IHS Markit projects 2020 auto sales will drop by 15% compared to 2019. The NY Times reports analysts estimate a drop of about 37% in 2020 Q1 due to March’s shelter in place orders. There are so many unknowns right now. Will the $1,200 per person stimulus package be the only public stimulus? Will more consumer-friendly legislation follow? Will consumers use that $1,200 to pay down debt? Issues surrounding job and home security abound. We simply don’t know what will happen on a personal or economic level. The one piece of ‘good news’ for subprime lenders is that more borrowers will need your services in the future. Banks and credit agencies will continue reporting on consumers’ pay habits, even if borrowers are allowed a debt holiday or a forbearance. As credits degrade in the upcoming months, more will need your services to finance their next cars. If you put some safeguards in place, you may be able to make the most of the situation. These safeguards include:

• Verifying current employment
• Increasing down payments and lowering finance amounts
• Confirming bank balances to ensure personal liquidity
• Exercising caution when underwriting for consumers in the states of New York, New Jersey, California, Arizona, and Nevada, the most debt-heavy states (NY Fed Debt Survey, slide 32)
• Carefully evaluating 18- to 29-year-old consumers, the demographic with the most trouble paying current bills (NY Fed Debt Survey, slide 26)

You know it’s going to be a tough time post-COVID-19, at least in the short term. However, there are concrete steps you can take to prepare your lending business for what’s coming next. How will you adjust?   ATLANTA--(BUSINESS WIRE)--Apr. 8, 2020-- Repay Holdings Corporation (NASDAQ:RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced its partnership with TurnKey Lender, a cloud-based lending software for evaluating borrowers, decision-making support, and online-lending process automation. REPAY and TurnKey Lender both serve the lending marketplace in the United States and Canada. The integration between REPAY and TurnKey Lender will enable credit unions, finance companies, and lenders to fund loans 24/7 and subsequently accept loan payments via card and ACH directly through the TurnKey Lender platform as well as consumer-facing payment channels, including Interactive Voice Response (IVR)/phone pay, text pay, mobile apps, and white-labeled online portals. “We believe our partnership with TurnKey Lender will create major efficiencies in loan servicing, payment collection, and reconciliation processes,” said Susan Perlmutter, Chief Revenue Officer of REPAY. “The integration between the two systems will create a seamless and convenient payment experience for our clients and their borrowers. We’ve assessed that Canadian lenders are largely underserved when it comes to payment options, so we’re excited about the opportunity this presents in filling a void and further empowering the Canadian lending marketplace with this powerful combination.” “The partnership will streamline the onboarding process for new companies on both TurnKey Lender and REPAY systems by accelerating legal verification and technical connection procedures for new customers who want to use online payment processing,” said Elena Ionenko, Chief Business Development Officer of TurnKey Lender. “Customers can elevate their business operations with lending and payments services at the same time to see substantial growth with their financial transactions, an important win in today’s digital first environment.” About TurnKey Lender TurnKey Lender is changing how businesses everywhere succeed. The company puts state-of-the-art lending software in the hands of businesses of all sizes, using proprietary technology that securely digitizes every step of credit management. Clients of TurnKey Lender’s end-to-end platform represent an array of industries, from traditional lenders to innovative retailers and service providers eager to boost point-of-sale and mobile purchasing support for their valued customers. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200408005005/en/

Investor Relations Contact for REPAY: repayIR@icrinc.com Media Relations Contact for REPAY: Kristen Hoyman khoyman@repay.com Media Relations Contact for TurnKey Lender: Lisbeth Garassino lgarassino@turnkey-lender.com Source: Repay Holdings Corporation

ATLANTA--(BUSINESS WIRE)--Mar. 26, 2020-- Repay Holdings Corporation, (NASDAQ: RPAY) (“REPAY”) a leading provider of vertically-integrated payment solutions, today announced its partnership with Remitter USA Inc., a market leading white-labeled SMS and email communications platform, powered by AI and used by providers in the financial services industry to improve payments recovery performance.

The integration between REPAY and Remitter will further streamline and automate recovery efforts for creditors in the financial services industry by removing the friction and communication gaps associated with the recovery process, engaging consumers with highly personalized, actionable text and emails to facilitate swift collection of missed or late payments. Remitter’s mobile-first technology has proven to significantly increase collections, shorten time-to-payment, reduce costs in a collection environment and improve overall consumer experiences.

Deployed in multiple global markets, Remitter delivers a world-class mobile communications and recovery experience that intelligently adapts to consumers, sending text and emails on the optimum day and time, in the right language and automating follow-up based on individual consumer behavior and natural language processing (NLP). REPAY’s integrated payment processing technology will enable Remitter users in receivables management to seamlessly accept credit and debit cards as well as ACH payments 24/7 through a customer-branded online payment portal.

“As leaders in the payments space, our clients look to us for innovative ways to deliver enhanced payment experiences to their customers. By pairing the deep industry experience and capabilities of REPAY and Remitter, we feel we can bring a new level of AI-driven personalization and predictability to payments – ultimately empowering integrated clients with a distinct competitive advantage in the marketplace,” said Susan Perlmutter, Chief Revenue Officer of REPAY.

“REPAY’s broad range of payment capabilities complements Remitter's AI-enabled payment recovery platform, which will provide our clients the ability to quickly test and deploy this integrated solution for immediate benefits. Using REPAY and Remitter together proves that you can measurably improve recovery performance while also enriching the customer experience and strengthening brand affinity, so we are excited to bring this to market in with such a strong partner and industry leader,” said Simon Scalzo, Remitter’s Founder.

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.

About Remitter USA Inc.

Remitter is an innovative communication (text and email) platform using artificial intelligence to deliver world-class, adaptive recovery experiences to creditors’ customers in financial services, utilities, telco and healthcare. At the core of Remitter’s success is its proven ability to lift recovery performance using predictive and heuristic behavioral data to provide consumers with personalized experiences.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200326005378/en/

Investor Relations Contact for REPAY:
repayIR@icrinc.com

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

Media Relations Contact for Remitter:
Dee Gligorevic
dee@remitter.com

Source: Repay Holdings Corporation v

Our appetite for borrowing only continues to grow, Coronavirus or not.

Debt levels are rising despite what has been eleven years of favorable economic performance. That was before the Coronavirus outbreak. Borrowing demand, however, is likely to remain strong, if not just a little delayed, despite the forced global slowdown. Credit cards are a big piece of that debt. After home, car, and student loans, credit cards are the next biggest debt category (see the blue in the chart below). With rising credit card balances comes more interest in debt consolidation loans provided by fintech lenders like Lending Club, Prosper, or SoFi.

 The New York Fed Report on Household Debt 2019

Based on an Experian study from 2019, The Motley Fool reports personal loan debt is the fastest-growing type of debt. Personal loan debt growth of 12% is double the growth of the next biggest category, credit card debt. The average borrower has a $16,000 loan balance.

Experian

The need for personal loans and debt consolidation will continue to exist, virus or not. In fact, the demand could grow due to the new economic environment.

Lending Club’s Growth Numbers

Lending Club is one of the lending leaders. Since they are publicly traded, we can get a good snapshot of the industry by looking at their numbers. From their last quarterly earnings report (slide 13), we can see the growth of demand for personal loans quarterly and a year over year (YoY) comparison to 2018. The loan origination numbers here are in the millions of dollars. Lending Club is averaging between $2.7 billion and $3.35 billion in originations per quarter. The total for 2019 is a little over $12 billion. Not only is that a lot of loans, but the YoY growth is double-digit in four of the past five quarters. People’s appetite for borrowing isn’t slowing down. And then there’s the virus.

Effects of the Coronavirus

Many U.S. cities are on some form of quarantine or lockdown, meaning people are going out less. As we write this, bars and restaurants are closing or converting to carry-out only service in cities, both big and small. But loans and other debts must continue to be paid unless a temporary suspension of payments goes through Congress. And while the appetite for borrowing hasn’t changed yet, people’s behaviors have. Those used to going out and making a payment at a bank branch or in some other point-of-sale manner are now staying home. They need to find different ways to accomplish the same tasks. On the bright side, the internet and digital payment options continue to function properly. If they were going to overload and malfunction, as we’ve seen with the Robinhood stock trading app, we would have seen and heard of it by now. Digital payment options like online, text or SMS, and interactive voice response ensure customers can make payments virtually, and businesses can get paid. Companies with more available and flexible payment options will be rewarded during this unprecedented time. Your flexibility in this area will increase your cash flow. Despite having to put new policies in place (like working from home, shorter hours, reduced staff, etc.), you have a business to run. You need to get paid. As a lender, many people are relying on you during this time.

• Your employees need to get paid, so their lives aren’t disrupted too much more than they already are.
• Your future borrowers are relying on you for much-needed funds.
• While perhaps delayed, many of your borrowers are still getting paychecks and want to pay what they have promised. Many are hoping to maintain or improve their credit standing.
• Your shareholders are looking for smart, careful management of their investments during a difficult time.

Make it easy for borrowers, especially now, by giving them as many options as possible. As behaviors change due to the virus, there’s a good chance people will be spending less. But that will probably have little effect on the demand for personal loans, especially for debt consolidation. Odds are demand will stay strong. When things normalize, people will want to borrow. Flexible payment systems are one way, along with solid underwriting and portfolio management, that you can continue to originate quality loans and keep your business running smoothly.

ATLANTA--(BUSINESS WIRE)-- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today reported financial results for its fourth quarter and full year ended December 31, 2019.

“2019 was a milestone year for REPAY. We completed our business combination with Thunder Bridge, which resulted in REPAY becoming a publicly traded company. We also announced two strategic acquisitions – TriSource Solutions, which increased our back end capabilities, and APS Payments, which brought us into the B2B vertical and increased our total addressable market by more than one trillion dollars. Including the impact of these acquisitions, we experienced year-over-year growth in card payment volume and gross profit of 44% and 43%, respectively. Organically, we also had a very productive year reporting 29% organic gross profit growth compared to 2018,” said John Morris, CEO of REPAY. “2020 is shaping up to be another great year for the Company. With the addition of Ventanex, which brings us significant growth opportunities in the mortgage servicing and B2B healthcare markets, we now have a total annual projected payment volume opportunity of $2.3 trillion. Our leading platform, coupled with this attractive market opportunity, positions us well for robust growth and profitability.”

Three Months Ended December 31, 2019 Highlights

• Card payment volume was $3.4 billion, an increase of 72% over the fourth quarter of 2018
• Total revenue including the impact of the new revenue recognition standard was $33.6 million
• Total revenue excluding the impact of the new revenue recognition standard was $49.3 million, an increase of 45% over the fourth quarter of 2018
• Gross profit was $24.3 million, an increase of 67% over the fourth quarter of 2018
• Pro forma net loss¹ was ($7.5) million, as compared to net income of $2.1 million in the fourth quarter 2018
• Adjusted EBITDA was $14.7 million, an increase of 52% over the fourth quarter of 2018
• Adjusted Net Income was $12.3 million, an increase of 70% over the fourth quarter of 2018
• Adjusted Net Income per share was $0.20

Twelve Months Ended December 31, 2019 Highlights

• Card payment volume was $10.7 billion, an increase of 44% over the full year of 2018
• Total revenue on a combined basis¹ including the impact of the new revenue recognition standard was $104.6 million
• Total revenue on a combined basis¹ excluding the impact of the new revenue recognition standard was $165.8 million, an increase of 28% over the full year 2018
• Gross profit was $78.7 million, an increase of 43% over the full year of 2018
• Pro forma net loss was ($39.9) million, as compared to net income of $10.5 million for the full year of 2018
• Adjusted EBITDA was $48.4 million, an increase of 32% over the full year of 2018
• Adjusted Net Income was $39.5 million, an increase of 41% over the full year of 2018
• Adjusted Net Income per share was $0.66

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

Gross profit for 2019 represents total revenue, including the impact of the adoption of ASC 606, less other costs of services. Gross profit for 2018 represents total revenue, without the impact of the adoption of ASC 606, less interchange, network, other fees and other cost of services. The adoption of ASC 606 had no impact on gross profit. 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 weighted average number of shares of Class A common stock outstanding (on as-converted basis) for the three months ended December 31, 2019, and for the Successor period from July 11, 2019 to December 31, 2019 (excluding certain shares that were subject to forfeiture). 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.

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 the Company discusses results for the twelve month period ended December 31, 2019, we are referring to the combined results of the Predecessor for the periods from January 1, 2019 through July 10, 2019 and the Successor for the period from the Closing Date through December 31, 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.

Impact of Adoption of Topic 606

On January 1, 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers ("ASC 606") and related cost capitalization guidance, using the modified retrospective transition method. As such, the Company is not required to restate comparative financial information prior to the adoption of ASC 606 and, therefore, such information for the three months and year ended December 31, 2018 continues to be reported under FASB ASC Topic 605, Revenue Recognition ("ASC 605"). The adoption of ASC 606 did not impact the Company’s financial position, and only resulted in presentation changes in our statements of income, with revenues and expenses presented net of interchange, network and other fees. For the three months ended December 31, 2019, the adoption of ASC 606 reduced both revenue and operating expenses by $15.6 million and had no impact on operating income. The adoption of ASC 606 did not have any impact on net income or net income per share (basic and diluted) for the three months ended December 31, 2019. For the year ended December 31, 2019, the adoption of ASC 606 reduced both revenue and operating expenses by $61.2 million and had no impact on operating income. The adoption of ASC 606 did not have any impact on net income for the year ended December 31, 2019. A comparison of the current presentation under ASC 606 to the prior presentation under ASC 605 is provided below for the three months and the year ended December 31, 2019:

Subsequent Events

On February 10, 2020, REPAY announced the acquisition of Ventanex for up to $50 million, which includes up to a $14 million performance-based earnout. The closing of the acquisition was financed with a combination of cash on hand and new borrowings under REPAY’s existing credit facility. As part of the financing for the transaction, REPAY entered into an agreement with Truist Bank (formerly SunTrust Bank) and other members of its existing bank group to amend and upsize its previous $230 million credit facility to $345 million to provide additional capacity for growth.

On February 21, 2020, the Company entered into a swap transaction with Regions Bank. On a quarterly basis, commencing on March 31, 2020 up to and including the termination date of February 10, 2025, the Company will make fixed payments on the beginning notional amount of $30 million. On a quarterly basis, commencing on February 21, 2020 up to and including the termination date of February 10, 2025, the counterparty will make floating rate payments based on the 3 month LIBOR on the beginning notional amount of $30 million.

2020 Outlook

REPAY expects the below financial results for full year 2020, which reflects expected contributions from Ventanex.

Revenue information for the full year 2020 outlook is presented in accordance with ASC 606. In addition, REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures such as forecasted 2020 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 fourth quarter and full year 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 13699265. 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 weighted average number of shares of Class A common stock outstanding (on as-converted basis) for the three months ended December 31, 2019, and for the Successor period from July 11, 2019 to December 31, 2019 (excluding certain shares that were subject to forfeiture). Organic gross profit growth is a non-GAAP financial measure that represents the year-on-year gross profit growth that excludes gross profit attributed to acquisitions made in 2019. REPAY believes that Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share and organic gross profit growth 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, Adjusted Net Income per share and organic gross profit growth 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, organic gross profit growth 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, Adjusted Net Income per share and organic gross profit growth 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 full year 2020 outlook and statements regarding REPAY’s market and growth opportunities. 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.

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 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; a delay or failure to integrate and realize the benefits of the Ventanex acquisition and any difficulties associated with marketing products and services in the mortgage or B2B healthcare 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; exposure to economic conditions and political risk affecting the consumer loan market and consumer and commercial spending; the impacts of the recent COVID-19 coronavirus outbreak (which are highly uncertain and cannot be reasonably estimated or predicted at this time); 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. 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. 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 and technology needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity and enhances the experience of electronic payments.

¹ Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“Topic 606” or “ASC 606”) and related cost capitalization guidance, which was adopted by the Company on January 1, 2019 using the modified retrospective transition method. The adoption of ASC 606 resulted in presentation changes in our statements of income, with revenues and expenses presented net of interchange, network and other fees in accordance with Topic 606. As a result of the application of the modified retrospective transition method, the Company's prior period results were not restated to reflect ASC 606.

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 month period and year ended December 31, 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 fourth quarter and 2019 full year results to fourth quarter and 2018 full year results from continuing operations for the period ended December 31, respectively.

The following tables and related notes reconcile these Non-GAAP measures and the Pro Forma Measures to GAAP information for the three month period and year ended December 31, 2019 and 2018:

(1) Gross profit for 2019 represents total revenue, including the impact of the adoption of ASC 606, less other costs of services. Gross profit for 2018 represents total revenue, without the impact of the adoption of ASC 606, less interchange, network, other fees and other cost of services in 2018. The adoption of ASC 606 had no impact on gross profit.

(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.

¹ Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“Topic 606” or “ASC 606”) and related cost capitalization guidance, which was adopted by the Company on January 1, 2019 using the modified retrospective transition method. The adoption of ASC 606 resulted in presentation changes in our statements of income, with revenues and expenses presented net of interchange, network and other fees in accordance with Topic 606. As a result of the application of the modified retrospective transition method, the Company's prior period results were not restated to reflect ASC 606

¹ Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“Topic 606” or “ASC 606”) and related cost capitalization guidance, which was adopted by the Company on January 1, 2019 using the modified retrospective transition method. The adoption of ASC 606 resulted in presentation changes in our statements of income, with revenues and expenses presented net of interchange, network and other fees in accordance with Topic 606. As a result of the application of the modified retrospective transition method, the Company's prior period results were not restated to reflect ASC 606

¹ Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“Topic 606” or “ASC 606”) and related cost capitalization guidance, which was adopted by the Company on January 1, 2019 using the modified retrospective transition method. The adoption of ASC 606 resulted in presentation changes in our statements of income, with revenues and expenses presented net of interchange, network and other fees in accordance with Topic 606. As a result of the application of the modified retrospective transition method, the Company's prior period results were not restated to reflect ASC 606.

¹ Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“Topic 606” or “ASC 606”) and related cost capitalization guidance, which was adopted by the Company on January 1, 2019 using the modified retrospective transition method. The adoption of ASC 606 resulted in presentation changes in our statements of income, with revenues and expenses presented net of interchange, network and other fees in accordance with Topic 606. As a result of the application of the modified retrospective transition method, the Company's prior period results were not restated to reflect ASC 606.

¹ Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“Topic 606” or “ASC 606”) and related cost capitalization guidance, which was adopted by the Company on January 1, 2019 using the modified retrospective transition method. The adoption of ASC 606 resulted in presentation changes in our statements of income, with revenues and expenses presented net of interchange, network and other fees in accordance with Topic 606. As a result of the application of the modified retrospective transition method, the Company's prior period results were not restated to reflect ASC 606.

¹ Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“Topic 606” or “ASC 606”) and related cost capitalization guidance, which was adopted by the Company on January 1, 2019 using the modified retrospective transition method. The adoption of ASC 606 resulted in presentation changes in our statements of income, with revenues and expenses presented net of interchange, network and other fees in accordance with Topic 606. As a result of the application of the modified retrospective transition method, the Company's prior period results were not restated to reflect ASC 606.

1. See footnote (m) for details on our amortization and depreciation expenses.
2. Reflects write-offs of debt issuance costs relating to Hawk Parent’s term loans and prepayment penalties relating to its previous debt facilities.
3. 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.
4. Reflects the changes in management’s estimates of the fair value of the liability relating to the Tax Receivable Agreement
5. 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 $22,013,287 as a result of new grants made in the Successor period.
6. Primarily consists of (i) during the three and twelve months ended December 31, 2019, professional service fees and other costs in connection with the Business Combination, the acquisition of TriSource Solutions, the acquisition of APS Payments, and (ii) during the three and twelve months ended December 30, 2018, professional service fees and other costs in connection with the Business Combination, and 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.
7. Reflects management fees paid to Corsair Investments, L.P. pursuant to the management agreement, which terminated upon the completion of the Business Combination.
8. 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.
9. 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.
10. Reflects franchise taxes and other non-income based taxes.
11. Consulting fees relating to REPAY’s processing services and other operational improvements that were not in the ordinary course 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 twelve months ended December 31, 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 twelve months ended December 31, 2019.
12. For the twelve months ended December 31, 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 December 31, 2018 and the twelve months ended December 31, 2019, reflects expenses incurred related to other one-time legal and compliance matters.
13. For the three and twelve months ended December 31, 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 twelve months ended December 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 acquisitions of TriSource Solutions, LLC and APS Payments. 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:

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 weighted average number of shares of Class A common stock outstanding (on as-converted basis) for the three months ended December 31, 2019, and for the Successor period from July 11, 2019 to December 31, 2019 (excluding certain shares that were subject to forfeiture).

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20200316005800/en/

Investor Relations Contact for REPAY:
repayIR@icrinc.com

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

Source: Repay Holdings Corporation

Does your credit union use technology to make things easier for members?

Mambu, Salesforce, Microsoft Office 360, Google G Suite, and Leasewave What do these software companies have in common? Two things:

1. Banks and credit unions commonly use them
2. The software is licensed, not purchased

These software companies are doing everything from providing email services to managing customer data and lease transactions to serving as core banking systems. And they do it all in the cloud through software licensing, commonly referred to as SaaS or software as a service. Banks and credit unions have been moving towards the cloud from on-premise software more slowly than other industries. This Credit Union 2.0 tech trends article, however, places cloud as one of the seven areas expected to grow in the future. The other six areas are:

• Digital Transformation
• Fintech Partnerships
• Marketing Automation
• Analytics
• Artificial Intelligence (AI) & Machine Learning
• IT Security

Payments: Fast, Convenient, and Profitable for a Credit Union

Do you know what technology hasn’t changed that much for credit unions? Payment technology. The basic premise is still there. Members want an easy way to pay for services and pay back loans. Does your credit union make this easy for members? Payment services represent a massive opportunity for credit unions to engage with members and exceed their service expectations. Payment System Technology Until the chip and pin cards and EMV (Europay, Mastercard and Visa) hit the U.S. a few years ago, there had been virtually no change in payment technology. Visa and Mastercard are still the leading card brands controlling much of the standard operating procedures and interchange rates when it comes to card transactions. All this is still true. But now, most of the advances in payment systems are in security, automation, and the use of AI. Since cloud can mean enhanced security and PCI compliance, there’s no reason not to utilize third-party payment technology platforms. Credit unions can take a modern fintech-based payment system and license its use without having to develop and maintain these advanced tech systems for themselves. Why build the infrastructure of a new payment system from scratch when the latest and most secure payment technology advancements are at your fingertips and could be licensed and implemented in a matter of weeks? Licensing for Credit Unions Some payment companies, including REPAY, let you license their suite of payment technology products, including online payment portals, text pay platforms, IVR (Interactive Voice Response) / phone pay, and mobile apps. These solutions can be customized for each credit union, so the look, feel, and voice of the credit union can be captured. Often, the members will never know the payment platforms they are accessing belong to anyone other than their credit unions. Offering convenient and modern payment services can give credit unions a competitive advantage over smaller or more conservative financial institutions. Utilizing specific channels, such as text pay and mobile apps, can increase the number of touchpoints credit unions have with their members, thereby promoting engagement and strengthening the member – credit union relationship. There is no reason why credit unions can’t offer the same payment options the big banks do. With core banking software, credit unions can often pick which modules they want to use. You can license the ones most applicable to your credit union without having to buy things you don’t need. Licensing of payment systems allows this, too.  Your credit union will stay at the forefront of technology, maintain the highest-level security, and give the greatest flexibility and convenience to your members while only paying for the parts that you use. Is your payment system in need of an upgrade? If it is, or you want to see how some of the best payment software in the industry works, contact us today for a demo.

Take advantage of one of the few times of year you KNOW your customers have money for both down payments and loan payments.

The average tax refund last year was $2,869, according to Marketwatch. As auto dealers, you know cars are only getting more expensive as manufacturers add more desirable technology and features. Tax season is a prime opportunity to target some of your prospects and turn them into buyers as they use their refunds to buy cars. For most people, money is still very tight, and saving can be tough. According to two studies, Turbotax Free filers and the IRS VITA (Volunteer Income Tax Assistance) Program, almost half of the respondents said they needed their tax refund money for necessities, such as groceries, bills, or rent. CNBC expects the refund number to be just a little bit higher this year at $3,100. CNBC also reports only 10% of refund recipients expect to use the money for investments. eBay conducted its retail study and found 37% of millennials receiving refunds are planning to spend the money on purchasing cars. That means there are going to be a lot of potential car buyers out there. Make sure you don’t miss this opportunity.

Reap Two Huge Benefits

Per the IRS and Turbotax studies, almost half of respondents do not need their refunds for necessities, which means there will be a lot of people with money to spend on a car. Your dealership can benefit in two ways, as buyers:

1. Make down payments for a car purchase (9% are expected to make a major purchase and cars definitely qualify, according to the CNBC article)
2. Pay down debt, including existing auto loans customers have with you (the #1 expected use of tax refunds this year)

Check out the chart from CNBC with information provided by a GoBankingRates poll: While using the refund for down payment money is easy to understand, if you hold a loan portfolio of any size, you could get a big bump in yield by receiving an early payoff. This might be even better for your dealership than customers using the money to buy a new car. The option of rolling over this loan into a bigger loan for a creditworthy buyer is a win/win, too.

Are you Ready?

There are lots of things to consider as we enter the peak of tax season. Do you have a marketing plan to target early payoffs or rolling a loan payoff and trade-in into a bigger, more expensive car? Do you have easy and convenient payment options allowing your new and existing customers to make down payments and loan payments? To capitalize on tax season, you need to be sure you never miss a payment opportunity. The most basic place to start is ensuring you can accept payments via debit/credit cards, prepaid cards, and ACH/bank accounts. The next step is thinking beyond your normal business hours and beyond the physical boundaries of your brick and mortar dealership. Can your customers make loan payments online, on a mobile app, or via text or Interactive Voice Response (IVR/phone pay)? It’s important to make the payment process as convenient as possible so you don’t miss cashing in on that tax refund. Other points to consider during this time have to do with prepayments. Do the loans you hold in-house have a prepayment penalty? What about your best lending partners? Do you use precomputed interest? If there is a charge for prepayment, no matter how small, then your portfolio can:

• Earn fees from the penalty
• Earn other fees related to the loan payoff
• Use the funds to lend to a new borrower at a possibly higher interest rate
• Roll this balance into a new bigger loan for the same borrower

The numbers are clear. In Q4 of 2019, household debt crossed $14 trillion, an all-time high, according to Reuters. Many families do not have extra money sitting aside for a car. The one significant opportunity you have to collect loan payments or get customers into a new car is during tax refund season. Don’t miss it!

ATLANTA--(BUSINESS WIRE)--Feb. 20, 2020-- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced that the Company will present at the 2020 KBW Fintech Payments Conference on Tuesday, March 3, 2020 in New York, NY. The presentation will begin at 2:40pm ET.

The presentation will be webcast live from the Company's investor relations website at https://investors.repay.com/ under the “Events” section. An archive of the webcast will be available at the same location on the website for 90 days.

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.

View source version on businesswire.com:
https://www.businesswire.com/news/home/20200220005886/en/

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