Priority Technology Holdings, Inc. · NASDAQ:PRTH

Priority Technology — Q4 2020 Earnings Presentation

19 slides from Priority Technology's earnings presentation, Mar 17, 2021

  1. Slide 1: Supplemental Slides for the Fourth Quarter 2020 Earnings Call

    Priority Technology Holdings, Inc. Supplemental Slides for the Fourth Quarter 2020 Earnings Call March 17, 2021

  2. Slide 2: Forward-Looking Statements

    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, expectation

  3. Slide 3: Fourth Quarter Highlights

    Fourth Quarter Highlights 2 • Revenue of $106.1 million increased 8.1% from $98.2 million in 2019 • Gross profit of $32.5 million increased 3.2% from $31.4 million in 2019 • Gross profit margin of 30.6% decreased 144 basis points from 32.0% in 2019 • Income from operations of $6.2 million increased

  4. Slide 4: Fourth Quarter Highlights (Excluding RentPayment)

    Fourth Quarter Highlights (Excluding RentPayment) 3 • Revenue of $106.2 million increased 12.3% from $94.5 million in 2019 • Gross profit of $32.5 million increased 15.5% from $28.2 million in 2019 • Gross profit margin of 30.6% increased 84 basis points from 29.8% in 2019 • Adjusted EBITDA of $18.3

  5. Slide 5: Fourth Quarter 2020 and 2019 (With and Without RentPayment)

    Fourth Quarter 2020 and 2019 (With and Without RentPayment) 4 Consolidated RentPayment(1) Excl RentPayment Consolidated RentPayment Excl RentPayment Revenues $ 106,091 $ (76) $ 106,167 $ 98,183 $ 3,636 $ 94,547 Operating Expenses: Costs of services 73,641 (7) 73,648 66,742 362 66,380 Salary and empl

  6. Slide 6: Full Year 2020 and 2019 (With and Without RentPayment)

    5 Full Year 2020 and 2019 (With and Without RentPayment) Consolidated RentPayment Excl RentPayment Consolidated RentPayment Excl RentPayment Revenues $ 404,342 $ 12,042 $ 392,300 $ 371,854 $ 11,694 $ 360,160 Operating Expenses: Costs of services 277,374 1,362 276,012 252,569 1,166 251,403 Salary and

  7. Slide 7: Revenue Growth (Decline) by Segment

    Revenue • Consumer Payments increased 15.3% to $100.8 million from $87.4 million • Commercial Payments decreased 39.8% to $3.9 million from $6.5 million  CPX decreased 6.0% to $1.5 million from $1.6 million  Managed Services decreased 50.8% to $2.4 million from $4.9 million • Integrated Partners d

  8. Slide 8: Key Growth Contributors

    Key Growth Contributors Specialized Merchant Acquiring was a Key Contributor to Q4 2020 Revenue Growth Strong Sustained 2020 Growth Momentum in e-Commerce (dollars in millions) (dollars in millions) Revenue Gross Profit • Merchant count ended the year at 2,537  Over 1,950 net new merchants added du

  9. Slide 9: New Merchant Boards Remained Strong Throughout 2020

    • New Merchant Boards remain strong despite the economic impact of COVID  Historically, monthly new merchant boards average in the range of 4,500 - 5,000  First quarter averaged 5,139 in 2020 and 4,544 in 2019  Second quarter averaged 4,389 in 2020 and 4,467 in 2019  Third quarter averaged 4,638

  10. Slide 10: Merchant Bankcard Processing Metrics by Segment

    Fourth Quarter Full Year 2020 2019 Variance 2020 2019 Variance Consumer Payments: Merchant bankcard processing dollar value 11,070.9$ 10,752.5$ 3.0% 41,703.7$ 42,303.9$ -1.4% Merchant bankcard transaction volume 120.3 129.2 -6.8% 455.2 511.9 -11.1% Average Ticket 91.99$ 83.24$ 10.5% 91.61$ 82.65$ 10

  11. Slide 11: Gross Profit Growth (Decline) by Segment

    Gross Profit • Consumer Payments increased 21.8% to $29.9 million from $24.5 million • Commercial Payments decreased 38.8% to $2.0 million from $3.3 million  CPX decreased 18.2% to $1.1 million from $1.3 million  Managed Services decreased 52.4% to $1.0 million from $2.0 million • Integrated Partn

  12. Slide 12: Operating Expenses

    Operating Expenses • Salaries and employee benefits of $9.8 million decreased 4.7% from $10.3 million • Salaries and employee benefits decreased $1.0 million excluding non-cash compensation • SG&A of $6.5 million decreased 33.2% from $9.8 million in 2019 • SG&A decreased $0.1 million excluding non-r

  13. Slide 13: Income from Operations

    Income from Operations • Consumer Payments increased 29.5% to $12.9 million from $9.9 million • Commercial Payments decreased $0.7 million to a loss of $0.5 million from $0.2 million • Integrated Partners increased $0.6 million to a loss of $0.1 million  Includes $(0.1) million in 2020 and $1.7 mil

  14. Slide 14: Other Income (Expense)

    Other Income (Expense) • Interest expense of $44.8 million increased 10.3% from $40.7 million in 2019 • Debt extinguishment and modification expense of $1.9 million includes:  $1.5 million of non-cash write-off of debt discount and issuance costs associated with the portion of the debt repaid in th

  15. Slide 15: Details of Gain on Sale of RentPayment

    Details of Gain on Sale of RentPayment (dollars in thousands) 14 Gross cash consideration 180,000$ Working capital adjustment (584) Net proceeds 179,416 Transaction costs (5,383) Net book value of assets sold (62,874) Segment goodwill assigned to assets sold (2,683) Other PRET intangible assets reco

  16. Slide 16: Components of Full Year Interest Expense

    • Cash interest includes administrative fees of $0.4 million in 2020 and $0.8 million in 2019 Interest Expense Full Year 2020 Interest expense of $44.8 million increased by $4.2 million from $40.7 million in 2019 2020 2019 (dollars in millions) Components of Full Year Interest Expense 15 Fourth Quar

  17. Slide 17: Cash Flow

    Full Year 2020 2019 2020 2019 Unrestricted Restricted Unrestricted Restricted (dollars in thousands) Net Cash Provided by Operating Activities 47,072$ 39,364$ 15,424$ 31,648$ 10,333$ 29,031$ Net Cash (Used In) Provided By Investing Activities 166,396 (97,747) 166,396 (97,747) Net Cash (Used In) Prov

  18. Slide 18: Outstanding Debt Walk

    0) $495.5 Q4 2019 Outstanding Debt Walk $(4.0) $(106.5) Senior Repayment Senior Prepayment (S$ millions) sia ae, Senior PIK Sub PIK $0.0 Revolver PIK Revolver Repayment Q4 2020 17

  19. Slide 19: EBITDA Walk

    EBITDA Walk 18 • Net leverage ratio of 5.85x at December 31, 2020 with Net Debt of $372.8 million • EBITDA adjustments are referenced to applicable clauses of the Senior Credit Facility Section 1.01 Definition

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